Assume that a customer purchase a new car every 5 years, for a total of 10 cars through her lifetime. Let's use Ford as a example. The customer starts out buying a Ford car as her first car. She will keep buying Ford cars as long as she is satisfied with them. However, if she is not satisfied with her current Ford car, she will purchase another brand next time and never return to Ford in her lifetime. What is the expected lifetime profit of a customer who starts out buying a Ford car? Assume that the profit of each car is $4,000, and the probability that the customer will be satisfied with her current Ford car is always 80%. Please use simulation, i.e. using a combination of control flows, to calculate the number.

Assume that a customer purchase a new car every 5 years, for a total of 10 cars through her lifetime. Let's use Ford as a example. The customer starts out buying a Ford car as her first car. She will keep buying Ford cars as long as she is satisfied with them. However, if she is not satisfied with her current Ford car, she will purchase another brand next time and never return to Ford in her lifetime. What is the expected lifetime profit of a customer who starts out buying a Ford car? Assume that the profit of each car is $4,000, and the probability that the customer will be satisfied with her current Ford car is always 80%. Please use simulation, i.e. using a combination of control flows, to calculate the number.

Operations Research : Applications and Algorithms

4th Edition

ISBN:9780534380588

Author:Wayne L. Winston

Publisher:Wayne L. Winston

Chapter20: Queuing Theory

Section: Chapter Questions

Problem 4RP

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Assume that a customer purchase a new car every 5 years, for a total of 10 cars through her lifetime. Let's use Ford as a example. The customer starts out buying a Ford car as her first car. She will keep buying Ford cars as long as she is satisfied with them. However, if she is not satisfied with her current Ford car, she will purchase another brand next time and never return to Ford in her lifetime. Question: What is the expected lifetime profit of a customer who starts out buying a Ford car? Assume that the profit of each car is $4,000, and the probability that the customer will be satisfied with her current Ford car is always 80%. Please use simulation, i.e. using a combination of control flows, to calculate the number. Write a function with the following two inputs: 1) the profit of each car, and 2) the probability that the customer will be satisfied with her current Ford car. The output of the function will be the lifetime profit of a customer given these two inputs. Basically,…
Suppose you are working as a data scientist for an online retailer, and you are tasked with optimizing the pricing strategy for a new product. The product is currently priced at $50, but you want to determine whether a higher or lower price would result in greater profit. You estimate that the demand for the product can be modeled using a normal distribution with a mean of 100 units per day and a standard deviation of 20 units per day. The cost of producing each unit is $30, and the retailer's profit is the difference between the revenue and the cost. The retailer incurs a fixed cost of $1000 per day for operating expenses, regardless of the number of units sold. Use simulation to answer to the question.
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