Unformatted text preview: μ and c ﬁxed), and similarly as a function of μ and c . Does it make intuitive sense? (b) Simulate the system under the optimal threshold with the values for ( λ, μ, c ) as above 10,000 times. ( y * = 2 . 02 in this case). Plot a histogram of the seller’s proﬁt under the optimal threshold. Use the simulated samples to compute the mean, standard deviation, the 5 thpercentile, and 95 thpercentile of the optimal proﬁt. (c) Repeat part (a) for (nonoptimal) threshold values of y * = 0 . 75 and y * = 3. What do you notice about the histogram? Does it make intuitive sense? 1...
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This note was uploaded on 03/17/2011 for the course IEOR 161 taught by Professor Lim during the Spring '08 term at Berkeley.
 Spring '08
 Lim
 Operations Research

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