For this problem, use the Land Shark simulation model from Problem 19 that fits a distribution to
Question:
a. Use ASP to apply simulation optimization to determine Land Shark’s bid amount (rounded to the nearest $1,000) that maximizes its expected return. To reduce the time to solve this model, you may want to reduce the number of trials per simulation to 1000. What is the probability that Land Shark wins the auction?
b. If Land Shark bids $5,000 more than the amount in part a, what is the likelihood that it wins the auction? How much expected return does Land Shark sacrifice by increasing its bid in this manner? Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
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a A bid amount of around 1271000 maximizes expected return to a value of approximately 113300 Land S...View the full answer
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Related Book For 
Essentials of Business Analytics
ISBN: 978-1285187273
1st edition
Authors: Jeffrey Camm, James Cochran, Michael Fry, Jeffrey Ohlmann, David Anderson, Dennis Sweeney, Thomas Williams
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