KEY DEC 2009_var

KEY DEC 2009_var - Q3 = Mean.67449*StDev \$1,884.81 IRQ = Q3...

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FIANL ANSWERS FOR FALL 2009 PROBLEM 2: Revenue Distributions Units Sold Mean Sumproduct of probs and vals Machine 1 Variance Second moment - Mean^2 where Machine 2 Second moment = Sumproduct of probs and vals^2 Standard Deviation = SQRT(Variance) (b) © Priors Future Price 0.24 \$9  0.3 \$10  0.24 \$11  0.22 \$12  EMV Conditional Forecast Prob Future Price \$9  \$10  \$11  \$12  Joint Probability Table Future Price \$9  \$10  \$11  \$12  Posterior Probability Table

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Future Price \$9  \$10  \$11  \$12
2 3 4 5 6 7 0.08 0.17 0.25 0.25 0.17 0.08 0.05 0.18 0.26 0.26 0.18 0.07 Mean Y = 190*Mean[X1] + 175*Mean[X2]  \$1,651.25  Variance Y = 190^2*Var[X1] + 175^2*Var[X2] 119908.69 \$^2 StDev Y = SQRT(Variance Y)  \$346.28  Q1 = Mean - .67449*StDev  \$1,417.69

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Unformatted text preview: Q3 = Mean + .67449*StDev \$1,884.81 IRQ = Q3 - Q1 \$467.12 Sell Now Wait 2 wks V* \$10,000.00 \$9,000.00 \$10,000.00 \$10,000.00 \$10,000.00 \$10,000.00 \$10,000.00 \$11,000.00 \$11,000.00 \$10,000.00 \$12,000.00 MAX CHOICE \$12,000.00 EVPI \$10,000.00 \$10,440.00 \$10,440.00 Wait 2 wks \$10,680.00 \$240.00 bability Table (Given probs in black, computed probs in red) "UP" "DOWN" Row Sum 0.3 0.7 1 0.7 0.3 1 0.8 0.2 1 0.9 0.1 1 "UP" "DOWN" 0.07 #N/A #N/A 0.21 #N/A #N/A 0.19 #N/A #N/A 0.2 #N/A #N/A 0.67 #N/A le "UP" "DOWN" 0.11 #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A (a) Mean Variance Price 4.5 1.89 \$190.00 4.55 1.69 \$175.00...
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KEY DEC 2009_var - Q3 = Mean.67449*StDev \$1,884.81 IRQ = Q3...

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