For this problem, use the Land Shark simulation model from Problem 24 that fits a distribution to
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Question:
For this problem, use the Land Shark simulation model from Problem 24 that fits a distribution to data in order to simulate competitor bid amounts.
a. Determine Land Shark’s bid amount (rounded to the nearest $1,000) that maximizes its expected return. What is the probability that Land Shark wins the auction at this bid amount?
b. If Land Shark bids $5,000 more than the amount in part (a), what is the likelihood that it wins the auction? How much expected return does Land Shark sacrifice by increasing its bid in this manner?
Related Book For
Essentials of Business Analytics
ISBN: 978-1285187273
1st edition
Authors: Jeffrey Camm, James Cochran, Michael Fry, Jeffrey Ohlmann , David Anderson, Dennis Sweeney, Thomas Williams
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