Get questions and answers for Practical Management Science

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The Indiana University Credit Union Eastland Plaza branch was having trouble getting the correct staffing levels to match customer arrival patterns."

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The file P14_50.xlsx contains five years of monthly data for a company. The first variable is Time (1–60). The second variable, Sales1, has data on"

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Pernavik Dairy produces and sells a wide range of dairy products. Because a government regulatory board sets most of the dairy’s costs and prices,"

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The Wilhoit Company has observed that there is a linear relationship between indirect labor expense and direct labor hours. Data for direct labor"

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The file P14_47.xlsx contains monthly cost accounting data on overhead costs, machine hours, and direct material costs. This problem will help you"

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The file P14_42.xlsx contains monthly data on consumer revolving credit (in millions of dollars) through credit unions.a. Use these data to forecast"

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The auditor of Kiely Manufacturing is concerned about the number and magnitude of year-end adjustments that are made annually when the financial"

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The Baker Company wants to develop a budget to predict how overhead costs vary with activity levels. Management is trying to decide whether direct"

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A power company located in southern Alabama wants to predict the peak power load (i.e., the maximum amount of power that must be generated each day"

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The file P14_29.xlsx contains monthly time series data for total U.S. retail sales of building materials (which includes retail sales of building"

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The file P14_28.xlsx contains monthly retail sales of U.S. liquor stores.a. Is seasonality present in these data? If so, characterize the seasonality"

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The file P14_27.xlsx contains yearly data on the proportion of Americans under the age of 18 living below the poverty level.a. Create a time series"

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The file P14_26.xlsx contains the monthly number of airline tickets sold by the CareFree Travel Agency.a. Create a time series chart of the data."

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The file P14_25.xlsx contains the quarterly numbers of applications for home mortgage loans at a branch office of Northern Central Bank.a. Create a"

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The file P14_22.xlsx contains total monthly U.S. retail sales data. While holding out the final six months of observations for validation purposes,"

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The file P14_21.xlsx contains the weekly sales of rakes at a hardware store for a two-year period. Use the moving averages method, with spans of your"

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The file P14_20.xlsx contains the monthly sales of iPod cases at an electronics store for a two-year period. Use the moving averages method, with"

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The file P14_18.xlsx contains data on over 200 movies that came out in 2006 and 2007. Create a new variable Total Revenue that is the sum of Total US"

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The manager of a commuter rail transportation system was recently asked by her governing board to determine which factors have a significant impact"

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The file P14_04.xlsx lists the monthly sales for a company (in millions of dollars) for a 10-year period.a. Fit an exponential trend line to these"

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The file P14_01.xlsx contains the monthly number of airline tickets sold by a travel agency.a. Does a linear trend appear to fit these data well? If"

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Do exponentially distributed random numbers have the memoryless property? Here is one way to find out. Generate many exponentially distributed random"

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A company currently has two warehouses. Each warehouse services half the company’s demand, and the annual demand serviced by each warehouse is"

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A highly perishable drug spoils after three days. A hospital estimates that it is equally likely to need between one and nine units of the drug"

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Computco sells high-end computer workstations. The demand for its workstations during a month follows a normal distribution, with a mean of 400 and"

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Lowland Appliance replenishes its stock of 52-inch flat-screen TVs three times a year. Each order takes 1/9 of a year to arrive. Annual demand for"

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Every four years, Blockbuster Publishers revises its textbooks. It has been three years since the best-selling book The Joy of Excel has been"

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Change the ordering simulation so that emergency orders are never made. Instead, assume that all excess demand is backlogged, so the emergency cost"

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Change the ordering simulation so that emergency orders are never made. If demand in any week is greater than supply, the excess demand is simply"

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Change the ordering simulation in Example 12.7 so that the lead time can be 1, 2, 3, or 4 weeks with probabilities 0.5, 0.2, 0.2, and 0.1,"

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Modify the synchronized ordering model in Example 12.5 slightly so that you can use a two-way SolverTable on the fixed costs. Specifically, enter a"

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In the basic EOQ model in Example 12.1, suppose that the fixed cost of ordering is $500. Use Solver to find the new optimal order quantity. How does"

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solution"

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The Jogger Shoe Company is trying to decide whether to make a change in its most popular brand of running shoes. T he new style would cost the same"

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1. Starting with the spreadsheet model from Case 2.1 (or starting over, if you like), develop a spreadsheet model that lets Ewing see the"

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1. Suppose that the yields of the five zero-coupon bonds are all 8.5% one year from today. What are the returns of each bond over the period?2. Using"

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Suppose you are using an underwater probe to search for a sunken ship. At any time in the search, your probe is located at some point (x,y) in a"

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Nucleon is trying to determine whether to produce a new drug that makes pigs healthier. The product will be sold in years 1 to 5. The following"

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It is January 1 of year 0, and Merck is trying to determine whether to continue development of a new drug. The following information is relevant. You"

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It is January 1 of year 0, and Lilly is considering developing a new drug called Dialis. We are given the following information■ On March 15 of"

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It is now May 1 of year 0, and GM is deciding whether to produce a new car. The following information is relevant.■ The fixed cost of developing"

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In this version of “dice blackjack,” you toss a single die repeatedly and add up the sum of your dice tosses. Your goal is to come as close as"

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Based on Bukiet et al. (1997). Many Major League teams (including Oakland, Boston, LA Dodgers, and Toronto) use mathematical models to evaluate"

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You are unemployed, 21 years old, and searching for a job. Until you accept a job offer, the following situation occurs. At the beginning of each"

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Based on Hoppensteadt and Peskin (1992). The following model (the Reed–Frost model) is often used to model the spread of an infectious disease."

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Mary Higgins is a freelance writer with enough spare time on her hands to play the stock market fairly seriously. Each morning she observes the"

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Consider a drill press containing three drill bits. The current policy (called individual replacement) is to replace a drill bit when it fails. The"

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Consider a drill press containing three drill bits. The current policy (called individual replacement) is to replace a drill bit when it fails. The"

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Consider the following card game. The player and dealer each receive a card from a 52-card deck. At the end of the game the player with the highest"

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We are all aware of the fierce competition by mobile phone service companies to get our business. For example, AT&T is always trying to attract"

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The customer loyalty model in Example 11.9 assumes that once a customer leaves (becomes disloyal), that customer never becomes loyal again. Assume"

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Suppose an investor has the opportunity to buy the following contract (a stock call option) on March 1. The contract allows him to buy 100 shares of"

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A knockout call option loses all value at the instant the price of the stock drops below a given “knockout level.” Determine a fair price for a"

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A stock currently sells for $69. The annual growth rate of the stock is 15%, and the stock’s annual volatility is 35%. The risk-free rate is"

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For the data in the previous problem, the following is an example of a butterfly spread: sell two calls with an exercise price of $50, buy one call"

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If you own a stock, buying a put option on the stock will greatly reduce your risk. This is the idea behind portfolio insurance. To illustrate,"

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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"

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Based on Kelly (1956). You currently have $100. Each week you can invest any amount of money you currently have in a risky investment. With"

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Change the new car simulation from Example 11.4 as follows. It is the same as before for years 1 through 5, including depreciation through year 5."

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Modify Example 11.8 so that the portfolio now contains 100 shares of stock and one put option on the stock with the same parameters as in the"

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A European put option allows an investor to sell a share of stock at the exercise price on the exercise data. For example, if the exercise price is"

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Referring to the retirement example in Example 11.6, rerun the model for a planning horizon of 10 years; 15 years; 25 years. For each, which set of"

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Modify the model from Example 11.6 so that you use only the years 1975 to 2007 of historical data. Run the simulation for the same three sets of"

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The simulation output from Example 11.6 indicates that an investment heavy in stocks produces the best results. Would it be better to invest entirely"

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Run the retirement model from Example 11.6 with a damping factor of 1.0 (instead of 0.98), again using the same three sets of investment weights."

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In the cash balance model from Example 11.5, is the $250,000 minimum cash balance requirement really “costing” the company very much? Answer this"

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In the cash balance model from Example 11.5, the timing is such that some receipts are delayed by one or two months, and the payments for materials"

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Rerun the new car simulation from Example 11.4, but now use the RISKSIMTABLE function appropriately to simulate discount rates of 5%, 7.5%, 10%,"

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Rerun the new car simulation from Example 11.4, but now introduce uncertainty into the fixed development cost. Let it be triangularly distributed"

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In Example 11.3, suppose you want to run five simulations, where the probability of passing inspection is varied from 0.6 to 1.0 in increments of"

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In Example 11.3, we commented on the 95th percentile on days required and the corresponding date to start production. If the company begins"

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In Example 11.2, the gamma distribution was used to model the skewness to the right of the lifetime distribution. Experiment to see whether the"

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See how sensitive the results in Example 11.2 are to the following changes. For each part, make the change indicated, run the simulation, and comment"

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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"

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In Example 11.1, the possible profits vary from negative to positive for each of the 10 possible bids examined.a. For each of these, use @RISK’s"

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If the number of competitors in Example 11.1 doubles, how does the optimal bid change?"

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1. Starting with the model from Case 2.2, you should replace all of the inputs with probability distributions. Specifically, based on their knowledge"

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1. You should develop the simulation model just described. Only one @RISK output is required, the total retained impressions. Based on a run of 10"

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1. Develop a simulation model for 52 weeks of operation at Ebony. Graph the inventory of soap over time. What is the total cost (inventory cost plus"

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1. Egress management believes that a normal distribution is a reasonable model for the unknown demand in the coming year. What mean and standard"

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At the beginning of each week, a machine is in one of four conditions: 1 = excellent; 2 = good; 3 5 average; 4 5 bad. The weekly revenue earned by a"

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United Electric (UE) sells refrigerators for $400 with a one-year warranty. The warranty works as follows. If any part of the refrigerator fails"

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In the Walton Bookstore example, suppose that Walton receives no money for the first 50 excess calendars returned but receives $2.50 for every"

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This is an extension of Case 2.1 from Chapter 2, so you should read that case first. It asks you to develop a spreadsheet model, using a 0-1 variable"

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Suppose an investor has the opportunity to buy the following contract, a stock call option, on March 1. The contract allows him to buy 100 shares of"

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You have sued your employer for damages suffered when you recently slipped and fell on an icy surface that should have been treated by your"

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Two construction companies are bidding against one another for the right to construct a new community center building in Bloomington, Indiana. The"

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A buyer for a large department store chain must place orders with an athletic shoe manufacturer six months prior to the time the shoes will be sold"

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An investor with $10,000 available to invest has the following options: (1) he can invest in a risk-free savings account with a guaranteed 3% annual"

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Techware Incorporated is considering the introduction of two new software products to the market. The company has four options regarding these"

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Starting with the finished version of Example 9.3, change the fixed marketing cost to $4000 (really $4 million) in cell B5, and change the decision"

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Starting with the finished version of Example 9.2, change the decision criterion to “maximize expected utility,” using an exponential utility"

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Starting with the finished version of Example 9.2, change the decision criterion to “maximize expected utility,” using an exponential utility"

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You saw in Example 9.4 how Acme prefers to abandon the product when the risk tolerance in cell B12 is $5000 (really $5 million). This is despite the"

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Using the finished version of the file for Example 9.4, use a data table to perform a sensitivity analysis on the risk tolerance. Specifically, let"

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The terms prior and posterior are relative. Assume that the test in Figure 9.17 (and in the file Bayes Rule for Disease.xlsx) has been performed, and"

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The terms prior and posterior are relative. Assume that the test in Figure 9.17 (and in the file Bayes Rule for Disease.xlsx) has been performed, and"

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The model in Example 9.3 has only two market outcomes, good and bad, and two corresponding predictions, good and bad. Modify the decision tree by"

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In Example 9.2, a technological failure implies that the game is over—the product must be abandoned. Change the problem so that there are two"

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If you examine the decision tree in Figure 9.12 (or any other decision trees from PrecisionTree), you will see two numbers (in blue font) to the"

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