The Business Cycle
Unit 2 Chapter 26
What are the 3 economic goals that all countries have
Identify the 4 key parts of the definition of GDP
How do we use G
What is simulation?
Imposing uncertainty (probability
distributions) on inputs, per trial
Watch how output(s) vary under
Perform and analyze thousands
3. Process Flow Measures
Problem 1 (a)
1. Time Travelers Insurance Company (TTIS) processes 12,000
claims per year. The average processing time is 3 weeks.
Assume 50 weeks per year.
a) What is the average number of claims that are in process?
R per week
Intro to Linear Programming
Install solver add-in:
File Options Add-ins Solver
What is optimization?
the best values for a set of decisions
Open book/notes (not spreadsheets)
but if you depend on them youll be in trouble
Paper tests due at end of class promptly.
Blackboard dropbox closes 5 minutes later.
You must s
By now you should feel comfortable with
f(x) = c1x1 + c2x2 + + cnxn
an LP problem
Define the decision var
Integer Linear Optimization
Recall solutions in LP
Before we tolerated decimal solutions to integer decisions
Decisions are scaled by orders of magnitude
Parameter uncertainty or approximations are relativel
Linear Regression, continued
Finally we can extend these mathematical
concepts to that of a conceptual model
Calculated / fitted line
(using observed data)
y b0 b1 x
Linear Regression Model
y 0 1 x