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Unformatted text preview: Spring 2009 OR3510/5510 Problem Set 4 Due Monday Feb 23 at 10am. You may insert in the homework box between Rhodes and Upson or give it to me in PHL 101 at the beginning of class by 10:10am. If you intend to give it to me, please make sure to arrive in good time so as not to interfere with the lecture. Reading: We have finished Markov chains and are now in Section 5.2 and will nex move to the Poisson process. x/y=page x, problem y in Ross. (1) Zeke prevents bankruptcy: Without benefit of dirty tricks, Harry’s restaurant business fluctuates in successive years between 3 states: 0 ( bankruptcy), 1 (verge of bankruptcy) and 2 (solvency). The transition matrix giving the probabilities of evolving from state to state is P = 1 . 5 . 25 . 25 . 5 . 25 . 25 . (a) What is the expected number of years until Happy Harry’s restaurant goes bankrupt assuming he starts from the state of solvency? (b) Harry’s rich uncle Zeke decides it is bad for the family name if his nephew Harry is allowed to go bankrupt. Thus when state 0 is entered, Zeke infuses Harry’s businessallowed to go bankrupt....
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This note was uploaded on 09/22/2009 for the course ORIE 3510 taught by Professor Resnik during the Summer '09 term at Cornell University (Engineering School).
- Summer '09