Question: Identify the correct sequence - ( i ) Identify factors such as demand, price, and exchange rate, whose fluctuation will be considered over the next
Identify the correct sequence
i Identify factors such as demand, price, and exchange rate, whose fluctuation will be considered over the next T periods.
ii Determine what distribution to use to model the uncertainty.
iii Identify the duration of each period month quarter, etc. and the number of periods T over the which the decision is to be evaluated.
iv Identify the periodic discount rate k for each period.
v Represent the decision tree with defined states in each period, as well as the transition probabilities between states in successive periods.
vi Working back to period identifying the optimal decision and the expected cash flows discounted at rate k at each step.
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