The MillerOrr Model. Heavenly Company has experienced a stochastic demand for its product, which results in fluctuating
Fantastic news! We've Found the answer you've been seeking!
Question:
The Miller–Orr Model. Heavenly Company has experienced a stochastic demand for its product, which results in fluctuating cash balances randomly. The following information is supplied:
Fixed cost of a securities transaction $100
The variance of daily net cash flows is $1,000
The daily interest rate on securities (6%/360) 0.000167
Determine the optimal cash balance, the upper and lower limit of cash needed, and the average cash balance.
Related Book For
Operations and Supply Chain Management
ISBN: 978-1118738542
8th edition
Authors: Roberta S. Russell, Bernard W. Taylor
Posted Date: