2. A group of medical professionals is considering the construction of a private clinic. If themedical demand is high (i.e., there is a favorable market for the clinic), the physicians couldrealize a net profit of $100,000. If the market is not favorable, they could lose $40,000. Ofcourse, they don't have to proceed at all, in which case there is no cost. In the absence of anymarket data, the physicians' best guess is that there is a 50-50 chance the clinic will besuccessful.a. Construct a decision tree to help analyze this problem.b. What should the medical professionals do?

a) A decision tree is a useful tool for analyzing decision-making problems involving uncertainty. In…

Answered: 2. A group of medical professionals, is…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Case. 15.1. Ski Jacket Production. Egress, Inc., is a small company that designs, produces, and sells ski jackets and other coats. The creative design team has labored for weeks over its new design for the coming winter season. It is now time to decide how many ski jackets to produce in this production run. Because of the lead times involved, no other production runs will be possible during the season. Predicting ski jacket sales months in advance of the selling season can be quite tricky. Egress has been in operation for only three years, and its ski jacket designs were quite successful in two of those years. Based on realized sales from the last three years, current economic conditions, and professional judgment, 12 Egress employees have independently estimated demand for their new design for the upcoming season. Their estimates are listed in Table 15.2 To assist in the decision on the number of units for the production run, management has gathered the data in Table 15.3. Note that S…
XYZ Manufaturing company has hired a new VP (D.A.King) for managing capacity investment decisions. Mr. King reviews the situation after he comes on board and decides that he can invest in Batch manufacturing, Custom manufacturing or Group technology. Mr. King will not be able to forecast demand accurately till after the technology choices are made. Demand will be classified into four scenarios: poor, fair, good and excellent. The table below indicates the payoffs for each combination of technology choice and demand scenario. POOR FAIR GOOD EXCELLENT PROBABILITY 0.1 0.4 0.3 0.2 Batch - $200,000 $1,000,000 $1,200,000 $1,300,000 Custom $100,000 $300,000 $700,000 $800,000 Group Technology - $1,000,000 -$500,000 $500,000 $2,000,000 1.What is the expected monetary value of choosing the Group Technology option? 2.What is the expected monetary value of choosing the Batchoption? 3What is the BEST decision based on…
Discuss two extensions to the original GARCH (p,q) model and explain additional characteristics of financial data they might be able to capture.
1. Redback Industries is a relatively small but successful and fast-growing maker of peripheral devices for cell phones including battery chargers, enhanced antennas, SIM cards, and custom carrying cases. Costco is considering purchasing Redback in order to sell the devices as private label offerings. However, Costco has set an offer price of $ 600M that depends on whether Redback’s current Annual Net Income is higher and significantly different from its 14-year average of $ 104.5M per year; Redback has indicated it is willing to sell itself to Costco at the $600M price. Use the following information to determine at the 95 % Level Of Confidence whether Costco will proceed with the purchase at the planned price of $ 600M or will lower its offering price if Redback’s current Annual Net Income is not greater than $ 104.5M per year. Redback Industries Normalized Yearly Annual Net Income over the last 14 years is $ 104.5M Redback Industries is currently reporting Yearly Annual Net…
1. Here is data testing dosage amounts for a new drug used to treat pain. Due to its recent development, researchers want to know what is the appropriate dosage to treat chronic pain in arthritis patients. Each participant was given either a sugar pill, 50 mg, or 100 mg of the new medication. It is predicted that the 50 mg will be more effective than the placebo, and the 100 mg will be more effective than both the placebo and 50 mg. After a month, each participant rated their pain level. The higher the value, the more pain they felt. Use alpha = .05 Placebo/Sugar Pill 50 mg 100 mg X1 = 14 SS, = 932 X2 = 12 X3 = 7 SS2 = 654 SS3 = 620 ni = 40 n2 = 40 n3 = 40 SS Total 3106 A. State the hypotheses. B. Make a decision about the null. C. State your conclusion. D. Relate your conclusion to the research. E. If allowed, conduct analytical comparisons. a. State the hypotheses. b. Make a decision about the null. c. State your conclusion. d. Relate your conclusion to the research.
The Harriet Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs the hotel $30 per room in variable costs (cleaning, bathroom items, etc.) each night a room is occupied. For each reservation accepted, there is a 5% chance that the guest will not arrive. If the hotel overbooks, it costs $200 to compensate guests whose reservations cannot be honored. How many reservations should the hotel accept if it wants to maximize the average daily profit?
1. Suppose that you estimate a model of house prices to determine the impact of having beach frontage on the value of a house.14 You do some research, and you decide to use the size of the lot instead of the size of the house for a number of theoretical and data availability rea- sons. Your results (standard errors in parentheses) are: PRICE; = 40 + 35.0 LOT¡ – 2.0 AGE; + 10.0 BED; – 4.0 FIRE; (1.0) (5.0) (10.0) (4.0) (10) N = 30 R2 =.63 where: PRICE¡ =the price of the th house (in thousands of dollars) =the size of the lot of the th house (in thousands of square feet) = the age of the th house in years =the number of bedrooms in the th house =a qualitative/dummy variable for a fireplace (1 = yes for the th house) LOT; AGE; BED; FIRE; a. You expect the variables LOT and BED to have positive coefficients. Create and test the appropriate hypotheses to evaluate these expectations at the 5-percent level. b. You expect AGE to have a negative coefficient. Create and test the appropriate…
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The Camera Shop sells two popular models of digital SLR cameras (Camera A Price: 240, Camera B Price: 300). The sales of these products are not independent of each other, but rather if the price of one increase, the sales of the other will increase. In economics, these two camera models are called substitutable products. The store wishes to establish a pricing policy to maximize revenue from these products. A study of price and sales data shows the following relationships between the quantity sold (N) and prices (P) of each model: NA = 195 - 0.5PA + 0.35PB NB = 300 + 0.06PA - 0.5PB Construct a model for the total revenue and implement it on a spreadsheet. Develop a two-way data table to estimate the optimal prices for each product in order to maximize the total revenue. Vary each price from $250 to $500 in increments of $10. Max profit occurs at Camera A price of $ . Max profit occurs at Camera B price of $

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