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Unformatted text preview: Homework 2 for SEG3570 Stein W. Wallace January 25, 2008 Consider the example ”Regional Planning” on page 46 in the textbook. However, add the following assumption: Water allocation is based on a normal year. Sometimes water allocation is a bit higher, sometimes quite a bit lower, depending on the rainfall of the season. However, all production decisions (i.e. all planting, defined by x i as in the textbook) must be made before the allocation for that year is known. Since the three kibbutzim are in the same area, we need only one random variable to describe water allocation. Total expected water allocation is as given in Table 3.8: 600, 800 and 375. This allocation happens with a probability of 50%. However, with 40% probability the allocation is 10% higher and with 10% probability 40% lower. So, after production decisions and thereby plantings are made, it might be necessary to simply give up some of the planned production based on lack of water. It is not possible to switch to a crop needing less (or more) water at that point in time, since planting has already taken place.crop needing less (or more) water at that point in time, since planting has already taken place....
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- Spring '08
- Probability theory, Annual plant