scan - 46 1 Introduction and Examples While weather effects...

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46 1. Introduction and Examples flji " , ~ ( {~ ~ ( I ' " ,~ , ' " " ., ' ,. "" t 'f . ,~ ~ f I'''' ti'J ['J;' [~lr ~ , ' , " , ' , ' 1 fl' ~; r ' , ;' , - , " !,~!l ' '. .' ft i il \ i'Ji :"~ ' [II -;j~ i:1: While weather effects do no~ vary greatly over 25-year periods, fire damage can be quite variable. Assume that in each 25-year block, the probability is 1/3 that 15%of all timber stands are destroyed and that the probability is 2/3 that 5% is lost. Suppose that discount rates are completely overcome by increasing timber value so that all harvests in the 100-year period have the same current value. Revenue is then proportional to the total wood yield. 6. A hospital emergency room is trying to plan holiday weekend staffing for a Saturday, Sunday, and Monday. Regular-time nurses can work any two days of the weekendat a rate of $300per day. In general, . a nurse can handle 10 patients during a shift. The demand is not known, however. If more patients arrive than the capacity of the regular-time
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This note was uploaded on 08/06/2008 for the course IE 426 taught by Professor Linderoth during the Fall '08 term at Lehigh University .

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