Kenny bought a new car for $56,000 and it will be traded in for a new...
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Kenny bought a new car for $56,000 and it will be traded in for a new one after using 5 years. The maintenance cost and operating cost are needed if a car is retained. Kenny has obtained the following estimates of costs for various courses of action: Age of the car (years) Replacement cost (S) Operating cost (S) Maintenance cost (S) 1 3,000 300 100 2 4,000 400 200 3 5,500 600 300 4 7,000 700 600 5 8,000 800 900 (a) Use dynamic programming to find the optimal purchasing policy or strategy which minimizes the total cost over a period of 5 years, and leaves Kenny with a new car at the end of this period. Note: For your optimal purchasing policy, you should state both the decision and the cost at the end of each year, and also the total cost over the period of 5 years. [20 marks] (b) Kenny saved $500 per month for two years, do you think that Kenny is able to follow the optimal purchasing policy obtained in (a)? Explain your answer. [3 marks] (c) Kenny wishes to have a new car at the end of year 3, which strategy(s) obtained in (a) will satisfy this requirement? [2 marks] Kenny bought a new car for $56,000 and it will be traded in for a new one after using 5 years. The maintenance cost and operating cost are needed if a car is retained. Kenny has obtained the following estimates of costs for various courses of action: Age of the car (years) Replacement cost (S) Operating cost (S) Maintenance cost (S) 1 3,000 300 100 2 4,000 400 200 3 5,500 600 300 4 7,000 700 600 5 8,000 800 900 (a) Use dynamic programming to find the optimal purchasing policy or strategy which minimizes the total cost over a period of 5 years, and leaves Kenny with a new car at the end of this period. Note: For your optimal purchasing policy, you should state both the decision and the cost at the end of each year, and also the total cost over the period of 5 years. [20 marks] (b) Kenny saved $500 per month for two years, do you think that Kenny is able to follow the optimal purchasing policy obtained in (a)? Explain your answer. [3 marks] (c) Kenny wishes to have a new car at the end of year 3, which strategy(s) obtained in (a) will satisfy this requirement? [2 marks]
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Managing the Law The Legal Aspects of Doing Business
ISBN: 978-0133847154
5th edition
Authors: Mitchell McInnes, Ian R. Kerr, J. Anthony VanDuzer
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