346Chapter13HWSolutions

# 346Chapter13HWSolutions - Chapter 13 Simulation Learning...

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Chapter 13 Simulation Learning Objectives 1. Understand what simulation is and how it aids in the analysis of a problem. 2. Learn why simulation is a significant problem-solving tool. 3. Understand the difference between static and dynamic simulation. 4. Identify the important role probability distributions, random numbers, and the computer play in implementing simulation models. 5. Realize the relative advantages and disadvantages of simulation models. 6. Understand the following terms: simulation Monte Carlo simulation simulation model discrete-event simulation 13 - 1

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Chapter 13 Solutions: 1. a. Profit = (249 - c 1 - c 2 ) x - 1,000,000 = (249 - 45 - 90) (20,000) - 1,000,000 = \$1,280,000 (Engineer's) b. Profit = (249 - 45 - 100) (10,000) - 1,000,000 = \$40,000 (Financial Analyst) c. Simulation will provide probability information about the various profit levels possible. What if scenarios show possible profit outcomes but do not provide probability information. 2. a. Let c = variable cost per unit x = demand Profit = 50 x - cx - 30,000 = (50 - c ) x - 30,000 b. Base case: Profit = (50 - 20) 1200 - 30,000 = 6,000 Worst case: Profit = (50 - 24) 300 - 30,000 = -22,200 Best case: Profit = (50 - 16) 2100 - 30,000 = 41,400 c. The possibility of a \$41,400 profit is interesting, but the worst case loss of \$22,200 is risky. Risk analysis would be helpful in evaluating the probability of a loss. 3. Random Number Direct Labor Cost 0.3753 \$45 0.9218 \$47 0.0336 \$43 0.5145 \$45 0.7000 \$46 4. a. Sales Interval 0 .00 but less than .08 1 .08 but less than .20 2 .20 but less than .48 3 .48 but less than .72 4 .72 but less than .86 5 .86 but less than .96 6 .96 but less than 1.00 b. 2, 5, 2, 3, 2, 4, 2, 1, 1, 2 c. Total Sales = 24 units 13 - 2
Simulation 5. a. Stock Price Change Probability Interval -2 .05 .00 but less than .05 -1 .10 .05 but less than .15 0 .25 .15 but less than .40 +1 .20 .40 but less than .60 +2 .20 .60 but less than .80 +3 .10 .80 but less than .90 +4 .10 .90 but less than 1.00 b. Random Number Price Change Ending Price Per Share 0.1091 -1 \$38 0.9407 +4 \$42 0.1941 0 \$42 0.8083 +3 \$45 Ending price per share = \$45 6. a. Payment Interval \$0 .00 but less than .83 500 .83 but less than .89 1,000 .89 but less than .94 2,000 .94 but less than .96 5,000 .96 but less than .98 8,000 .98 but less than .99 10,000 .99 but less than 1.00 b. Payments to Policy Holders Payment 1 8,000 12 2,000 14 10,000 16 2,000 \$22,000 No payments were made to the other 16 policy holders. 7. Time = a + r ( b - a ) = 10 + r (18 - 10) = 10 + 8 r r Time 0.1567 11.25 minutes 0.9823 17.86 minutes 0.3419 12.74 minutes 0.5572 14.46 minutes 0.7758 16.21 minutes 13 - 3

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Chapter 13 8. a. The following table can be used to simulate a win for Atlanta Game Interval for Atlanta Win 1 .00 but less than .60 2 .00 but less than .55 3 .00 but less than .48 4 .00 but less than .45 5 .00 but less than .48 6 .00 but less than .55 7 .00 but less than .50 b. Using the random numbers in column 6 beginning with 0.3813, 0.2159 and so on, Atlanta wins
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## This note was uploaded on 12/13/2011 for the course BUAD 346 taught by Professor Staff during the Fall '08 term at University of Delaware.

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346Chapter13HWSolutions - Chapter 13 Simulation Learning...

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