# Question

Six months before its annual convention, the American Medical Association must determine how many rooms to reserve. At this time, the AMA can reserve rooms at a cost of $150 per room. The AMA believes the number of doctors attending the convention will be normally distributed with a mean of 5000 and a standard deviation of 1000. If the number of people attending the convention exceeds the number of rooms reserved, extra rooms must be reserved at a cost of $250 per room.

a. Use simulation with @RISK to determine the number of rooms that should be reserved to minimize the expected cost to the AMA. Try possible values from 4100 to 4900 in increments of 100.

b. Redo part a for the case where the number attending has a triangular distribution with minimum value 2000, maximum value 7000, and most likely value 5000. Does this change the substantive results from part a?

a. Use simulation with @RISK to determine the number of rooms that should be reserved to minimize the expected cost to the AMA. Try possible values from 4100 to 4900 in increments of 100.

b. Redo part a for the case where the number attending has a triangular distribution with minimum value 2000, maximum value 7000, and most likely value 5000. Does this change the substantive results from part a?

## Answer to relevant Questions

You have made it to the final round of the show Let’s Make a Deal. You know that there is a $1 million prize behind either door 1, door 2, or door 3. It is equally likely that the prize is behind any of the three doors.The ...Lemington’s is trying to determine how many Jean Hudson dresses to order for the spring season. Demand for the dresses is assumed to follow a normal distribution with mean 400 and standard deviation 100. The contract ...We are continually hearing reports on the nightly news about natural disasters—droughts in Texas, hurricanes in Florida, floods in California, and so on. We often hear that one of these was the “worst in over 30 ...In the cash balance model from Example 16.5, the timing is such that some receipts are delayed by one or two months, and the payments for materials and labor must be made a month in advance. Change the model so that all ...Suppose you currently have a portfolio of three stocks, A, B, and C. You own 500 shares of A, 300 of B, and 1000 of C. The current share prices are $42.76, $81.33, and $58.22, respectively. You plan to hold this portfolio ...Post your question

1