Practical Management Science
5th Edition
ISBN: 9781305250901
Author: Wayne L. Winston, S. Christian Albright
Publisher: Cengage Learning
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Textbook Question
Chapter 11.2, Problem 3P
Referring to Example 11.1, if the average bid for each competitor stays the same, but their bids exhibit less variability, does Miller’s optimal bid increase or decrease? To study this question, assume that each competitor’s bid, expressed as a multiple of Miller’s cost to complete the project, follows each of the following distributions.
- a. Triangular with parameters 1.0, 1.3, and 2.4
- b. Triangular with parameters 1.2, 1.3, and 2.2
- c. Use @RISK’s Define Distributions window to check that the distributions in parts a and b have the same mean as the original triangular distribution in the example, but smaller standard deviations. What is the common mean? Why is it not the same as the most likely value, 1.3?
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Which is the correct answer for the question below.
Some popular reality television programs follow people who buy the contents of abandoned storage lockers at public auctions. In most cases, several storage lockers are sold in sequence during a particular auction. Occasionally, one of the buyers will purposefully bid much more than the expected value of a particular storage locker in order to intimidate the other bidders. What is a plausible explanation for these excessive bids?
A. The excessive bids may be rational if they occur during the last auction of the day.
B. The bidder is trying to establish a first-mover advantage, but only if they occur during the first auction of the day.
C. The buyer is trying to establish a reputation that may affect the outcome of later auctions.
D. The excessive bids represent a form of tacit collusion among the buyers.
2
The alternatives shown are to be compared on the basis of their present worth values. At an interest
rate of 8% per year, the values of n that you should use in the uniform series factors to make a
correct comparison by the present worth method are:
Alternative(A)
Alternative (B)
-25,000
-10,000
10,000
First Cost
M&O cost/year
3,000
Salvage value
6,000
-2,000
Life
4
O A n 4 years for A and n =4 years for B
OB. None of the above
O C. n = 4 years for A and n =3 years for B
O D. n = 12 years for A and n = 12 years for B
Chapter 11 Solutions
Practical Management Science
Ch. 11.2 - If the number of competitors in Example 11.1...Ch. 11.2 - In Example 11.1, the possible profits vary from...Ch. 11.2 - Referring to Example 11.1, if the average bid for...Ch. 11.2 - See how sensitive the results in Example 11.2 are...Ch. 11.2 - In Example 11.2, the gamma distribution was used...Ch. 11.2 - Prob. 6PCh. 11.2 - In Example 11.3, suppose you want to run five...Ch. 11.2 - In Example 11.3, if a batch fails to pass...Ch. 11.3 - Rerun the new car simulation from Example 11.4,...Ch. 11.3 - Rerun the new car simulation from Example 11.4,...
Ch. 11.3 - In the cash balance model from Example 11.5, the...Ch. 11.3 - Prob. 12PCh. 11.3 - Prob. 13PCh. 11.3 - The simulation output from Example 11.6 indicates...Ch. 11.3 - Prob. 15PCh. 11.3 - Referring to the retirement example in Example...Ch. 11.3 - A European put option allows an investor to sell a...Ch. 11.3 - Prob. 18PCh. 11.3 - Prob. 19PCh. 11.3 - Based on Kelly (1956). You currently have 100....Ch. 11.3 - Amanda has 30 years to save for her retirement. At...Ch. 11.3 - In the financial world, there are many types of...Ch. 11.3 - Suppose you currently have a portfolio of three...Ch. 11.3 - If you own a stock, buying a put option on the...Ch. 11.3 - Prob. 25PCh. 11.3 - Prob. 26PCh. 11.3 - Prob. 27PCh. 11.3 - Prob. 28PCh. 11.4 - Prob. 29PCh. 11.4 - Seas Beginning sells clothing by mail order. An...Ch. 11.4 - Based on Babich (1992). Suppose that each week...Ch. 11.4 - The customer loyalty model in Example 11.9 assumes...Ch. 11.4 - Prob. 33PCh. 11.4 - Suppose that GLC earns a 2000 profit each time a...Ch. 11.4 - Prob. 35PCh. 11.5 - A martingale betting strategy works as follows....Ch. 11.5 - The game of Chuck-a-Luck is played as follows: You...Ch. 11.5 - You have 5 and your opponent has 10. You flip a...Ch. 11.5 - Assume a very good NBA team has a 70% chance of...Ch. 11.5 - Consider the following card game. The player and...Ch. 11.5 - Prob. 42PCh. 11 - Prob. 44PCh. 11 - You now have 10,000, all of which is invested in a...Ch. 11 - Prob. 46PCh. 11 - Prob. 47PCh. 11 - Based on Marcus (1990). The Balboa mutual fund has...Ch. 11 - Prob. 50PCh. 11 - Prob. 52PCh. 11 - The annual demand for Prizdol, a prescription drug...Ch. 11 - Prob. 54PCh. 11 - The DC Cisco office is trying to predict the...Ch. 11 - Prob. 56PCh. 11 - Prob. 58PCh. 11 - You are considering a 10-year investment project....Ch. 11 - Prob. 61PCh. 11 - An automobile manufacturer is considering whether...Ch. 11 - Prob. 63PCh. 11 - Prob. 65PCh. 11 - Rework the previous problem for a case in which...Ch. 11 - Prob. 68PCh. 11 - The Tinkan Company produces one-pound cans for the...Ch. 11 - Prob. 70PCh. 11 - In this version of dice blackjack, you toss a...Ch. 11 - Prob. 76PCh. 11 - It is January 1 of year 0, and Merck is trying to...Ch. 11 - Suppose you are an HR (human resources) manager at...Ch. 11 - You are an avid basketball fan, and you would like...Ch. 11 - Suppose you are a financial analyst and your...Ch. 11 - Software development is an inherently risky and...Ch. 11 - Health care is continually in the news. Can (or...
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