Decision Analysis
A Prototype Example The GOFERBROKE COMPANY owns a tract of land that may contain
oil.
Prospective profits for the Goferbroke Company
Status of Land
Alternative
Drill For oil
Sell the land
Chance of Status
Oil
Dry
$700,000
$-100,000
$90,0
Review Exercises on Inventory Models
One More Example on Markov Chains [Transforming a Process into a
Markov Chain]:
Suppose that whether or not it rains today depends on previous weather conditions
through the last two days. Specifically, suppose that if
DYNAMIC PROGRAMMING
A PROTOTYPE EXAMPLE FOR DYNAMIC PROGRAMMING
EXAMPLE 1: The Stagecoach Problem
The STAGECOACH PROBLEM is a problem specially constructed to illustrate the
features and to introduce the terminology of dynamic programming. It concerns a
m
Key of lecture notes (Project Management)
Example 1
a)
b) Start A C Finish
Start A D E Finish
Start B C Finish
Start B D E Finish
path
Length = 4 weeks
Length = 7 weeks
Length = 5 weeks
Length = 8 weeks
c)
Activity
Start
A
B
C
D
E
Finish
ES
0
0
0
3
3
5
8
Inventory Theory
Inventories: Stocks of goods being held for future use or sale.
Just-in-time inventory system: a system that emphasizes planning and scheduling
so that the needed materials arrive just-in-time for their use.
How do companies use operation
Sum of Independent variables
It is often important to be able to calculate the distribution of X+Y from the
distributions of X and Y when X and Y are independent.
The Continuous Case
Suppose X having probability density f and Y having probability density