615 1505 1037 0356 0735 1364 1446 0403 0641 0129 0827

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Unformatted text preview: 4.9% 1.7% 17.3% -4.0% 0.662 0.795 1.577 0.055 1.582 1.406 1.223 0.288 1.053 -0.287 0.965 1.740 1.429 -0.349 0.872 2.272 0.861 -0.106 1.524 0.832 1.969 1.639 0.229 0.160 1.326 0.888 0.205 -0.374 0.659 0.489 0.444 1.670 0.542 -0.156 -0.187 -0.274 0.628 1.203 0.812 4.1% 4.8% 11.3% 0.4% 9.7% 10.5% 7.5% 1.8% 5.8% -1.5% 6.7% 10.5% 8.0% -2.6% 7.1% 11.9% 7.2% -0.7% 9.9% 5.4% 12.0% 9.2% 1.6% 1.0% 9.4% 5.7% 1.4% -2.8% 5.7% 2.8% 3.1% 9.3% 4.4% -0.9% -1.2% -2.1% 4.2% 6.7% 6.2% -0.303 -0.927 1.019 3.072 -1.306 1.796 -0.981 -0.151 -2.540 -2.405 1.135 -1.672 -2.816 3.299 3.436 -4.760 3.681 1.563 -0.408 0.276 -1.758 -2.807 2.050 0.106 1.177 0.068 1.199 3.671 4.350 -1.322 1.771 -2.996 3.813 -0.654 1.298 3.976 1.062 -2.712 2.704 -1.8% -5.6% 6.1% 18.5% -7.9% 10.8% -5.9% -0.9% -15.3% -14.5% 6.8% -10.1% -17.0% 19.9% 20.7% -28.7% 22.2% 9.4% -2.5% 1.7% -10.6% -16.9% 12.4% 0.6% 7.1% 0.4% 7.2% 22.2% 26.2% -8.0% 10.7% -18.1% 23.0% -3.9% 7.8% 24.0% 6.4% -16.4% 16.3% 1.210 1.911 0.856 1.854 0.126 0.964 2.249 1.753 -0.283 1.463 1.220 0.010 0.814 0.761 0.471 -0.547 1.859 0.805 1.464 -0.188 -0.090 1.833 1.550 1.292 9.4% 11.8% 5.5% 11.2% 1.0% 5.8% 16.8% 11.6% -1.4% 8.2% 7.9% 0.1% 5.4% 4.3% 2.7% -3.7% 13.9% 4.7% 8.3% -1.2% -0.7% 12.0% 9.7% 10.2% 2.421 -1.480 0.245 -1.878 4.368 -1.109 0.935 -0.251 -3.117 -2.686 -0.021 -1.060 0.577 -1.900 -1.316 2.427 1.295 -1.208 -2.579 0.629 3.142 -0.565 -1.025 2.630 14.6% -8.9% 1.5% -11.3% 26.4% -6.7% 5.6% -1.5% -18.8% -16.2% -0.1% -6.4% 3.5% -11.5% -7.9% 14.6% 7.8% -7.3% -15.6% 3.8% 19.0% -3.4% -6.2% 15.9% Mean Values Maximum Winners Profit in % 21.5% Minimum Maximum Mean HMO Mean HMO HMO Profit HMO Profit Profit in M$ Profit in % in % in % 0.609 3.7% -47.9% 54.5% SIMULATED BIDDING ON AN HMO CONTACT We assume that all hospitals other than Hospital 1 will add the amount entered in Cell I16 to their estimated cost. Set Excel for manual calculation and enter an amount in Cell H16 that Hospital 1 will add to its estimate when forming a bid. Computation of the sheet shows the effects of these adjustments on the 5,000 contracts that are simulated in the sheet Exercise 1. The results of the bidding for the individual hospitals are shown in Columns M through R. Let Xi be the random variable giving the profit gained by Hospital i. The sample of 5,000 simulated contacts is used to approximate E(X1) and the average of E(X2), E(X3), ..., and E(X6). These are shown in Cells E18 and F18, respectively. All monetary amounts are in millions of dollars. Results Of Adjustment Average For All Hospital 1 Other Hospitals Probability of Winning Contract Mean Profit If Hospital Wins Contract Expected Profit Of Adjustment Winning Hospital 6 5 5 6 3 1 3 4 6 4 3 6 5 6 0.158 5.10% 0.81% 0.168 4.98% 0.84% Mean HMO Profit 3.68% Added to Estimate Hospital 1 1.39 Contract 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Bids (Estimated Cost, Plus Adjustment, Plus 5%) Hospital 1 Hospital 2 Hospital 3 Hospital 4 Hospital 5 20.629 20.893 19.242 22.867 20.726 17.034 15.560 17.460 17.970 14.038...
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