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onsider the “Trip Logistic” example discussed in class (i.e. base case). Please solve the same problem with each of the following changes, and compare the results with those of the basecase: a) The spot market price (in period 0) is reduced to $0.55 per sq. ft. per year. Assume that everything else remains the same as the base-case. b) There is a lower demand uncertainty: Demand can go up by 5% with p= 0.5 or down by 5% with 1 − p= 0.5. Assume that everything else remains the same as the base-case.

onsider the “Trip Logistic” example discussed in class (i.e. base case). Please solve the same problem with each of the following changes, and compare the results with those of the basecase: a) The spot market price (in period 0) is reduced to $0.55 per sq. ft. per year. Assume that everything else remains the same as the base-case. b) There is a lower demand uncertainty: Demand can go up by 5% with p= 0.5 or down by 5% with 1 − p= 0.5. Assume that everything else remains the same as the base-case.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider the “Trip Logistic” example discussed in class (i.e. base case). Please solve the same problem with each of the following changes, and compare the results with those of the basecase:

a) The spot market price (in period 0) is reduced to $0.55 per sq. ft. per year. Assume that everything else remains the same as the base-case.

b) There is a lower demand uncertainty: Demand can go up by 5% with p= 0.5 or down by 5% with 1 − p= 0.5. Assume that everything else remains the same as the base-case.

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