Homework Help is Here – Start Your Trial Now!
Business
Operations Management
Strassel Investors buys real estate, develops it, and resells it for a profit. A new property is available, and Bud Strassel, the president and owner of Strassel Investors, believes if he purchases and develops this property, it can then be sold for $155,000. The current property owner has asked for bids and stated that the property will be sold for the highest bid in excess of $100,000. Two competitors will be submitting bids for the property. Strassel does not know what the competitors will bid, but he assumes for planning purposes that the amount bid by each competitor will be uniformly distributed between $100,000 and $145,000. (a) What is the estimate of the probability Strassel will be able to obtain the property using a bid of $125,000? (Use at least 5,000 trials. Round your answer three decimal places.) 0.418 1x (b) How much does Strassel need to bid to be assured of obtaining the property? O $125,000 O $135,000 O $145,000 (c) Use the simulation model to compute the profit for each trial of the simulation run (noting that Strassel's profit is $0 if he does not win the bid). With maximization of profit as Strassel's objective, use simulation to evaluate Strassel's bid alternatives of $125,000, $135,000, or $145,000. What is the expected profit (in dollars) for each bid alternative? (Use at least 5,000 trials. Round your answers to the nearest dollar.) x expected profit for a bid of $125,000 expected profit for a bid of $135,000 expected profit for a bid of $145,000 What is the recommended bid? O $125,000 O $135,000 O $145,000 Nood Help? $ 17335 $ $ 8698 x

Strassel Investors buys real estate, develops it, and resells it for a profit. A new property is available, and Bud Strassel, the president and owner of Strassel Investors, believes if he purchases and develops this property, it can then be sold for $155,000. The current property owner has asked for bids and stated that the property will be sold for the highest bid in excess of $100,000. Two competitors will be submitting bids for the property. Strassel does not know what the competitors will bid, but he assumes for planning purposes that the amount bid by each competitor will be uniformly distributed between $100,000 and $145,000. (a) What is the estimate of the probability Strassel will be able to obtain the property using a bid of $125,000? (Use at least 5,000 trials. Round your answer three decimal places.) 0.418 1x (b) How much does Strassel need to bid to be assured of obtaining the property? O $125,000 O $135,000 O $145,000 (c) Use the simulation model to compute the profit for each trial of the simulation run (noting that Strassel's profit is $0 if he does not win the bid). With maximization of profit as Strassel's objective, use simulation to evaluate Strassel's bid alternatives of $125,000, $135,000, or $145,000. What is the expected profit (in dollars) for each bid alternative? (Use at least 5,000 trials. Round your answers to the nearest dollar.) x expected profit for a bid of $125,000 expected profit for a bid of $135,000 expected profit for a bid of $145,000 What is the recommended bid? O $125,000 O $135,000 O $145,000 Nood Help? $ 17335 $ $ 8698 x

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
See similar textbooks
icon
Related questions
Question
Strassel Investors buys real estate, develops it, and resells it for a profit. A new property is available, and Bud Strassel, the president and owner of Strassel Investors, believes if he purchases and develops this property, it can then be sold for $155,000. The current property owner has asked for bids and stated that the property will be sold for the highest bid in excess of $100,000. Two competitors will be submitting bids for the property. Strassel does not know what the competitors will bid, but he assumes for planning purposes that the amount bid by each competitor will be uniformly distributed between $100,000 and $145,000. (a) What is the estimate of the probability Strassel will be able to obtain the property using a bid of $125,000? (Use at least 5,000 trials. Round your answer three decimal places.) 0.418 x (b) How much does Strassel need to bid to be assured of obtaining the property? O $125,000 O $135,000 O $145,000 (c) Use the simulation model to compute the profit for each trial of the simulation run (noting that Strassel's profit is $0 if he does not win the bid). With maximization of profit as Strassel's objective, use simulation to evaluate Strassel's bid alternatives of $125,000, $135,000, or $145,000. What is the expected profit (in dollars) for each bid alternative? (Use at least 5,000 trials. Round your answers to the nearest dollar.) X expected profit for a bid of $125,000 expected profit for a bid of $135,000 expected profit for a bid of $145,000 What is the recommended bid? O $125,000 O $135,000 O $145,000 Need Help? Read It Watch It $ 17335 $ $ 8698 x
Transcribed Image Text:Strassel Investors buys real estate, develops it, and resells it for a profit. A new property is available, and Bud Strassel, the president and owner of Strassel Investors, believes if he purchases and develops this property, it can then be sold for $155,000. The current property owner has asked for bids and stated that the property will be sold for the highest bid in excess of $100,000. Two competitors will be submitting bids for the property. Strassel does not know what the competitors will bid, but he assumes for planning purposes that the amount bid by each competitor will be uniformly distributed between $100,000 and $145,000. (a) What is the estimate of the probability Strassel will be able to obtain the property using a bid of $125,000? (Use at least 5,000 trials. Round your answer three decimal places.) 0.418 x (b) How much does Strassel need to bid to be assured of obtaining the property? O $125,000 O $135,000 O $145,000 (c) Use the simulation model to compute the profit for each trial of the simulation run (noting that Strassel's profit is $0 if he does not win the bid). With maximization of profit as Strassel's objective, use simulation to evaluate Strassel's bid alternatives of $125,000, $135,000, or $145,000. What is the expected profit (in dollars) for each bid alternative? (Use at least 5,000 trials. Round your answers to the nearest dollar.) X expected profit for a bid of $125,000 expected profit for a bid of $135,000 expected profit for a bid of $145,000 What is the recommended bid? O $125,000 O $135,000 O $145,000 Need Help? Read It Watch It $ 17335 $ $ 8698 x
Expert Solution
steps

Step by step

Solved in 5 steps with 5 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.
SEE MORE TEXTBOOKS