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 $160,000. The curre 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 $150,000. (a) Develop a worksheet that can be used to simulate the bids made by the two competitors. Strassel is considering a bid of $130,000 for the property. Using a simulation of 1,000 trials, what is the estimate of the probability Strassel will be able to obtain the property using a bid of $130,000? (Round your answer to the nearest tenth of a percent.) 32.7 x % (b) How much does Strassel need to bid to be assured of obtaining the property? O $130,000 O $140,000 Ⓒ$150,000 (c) Use the simulation model to compute the profit for each trial of the simulation run. With maximization of profit as Strassel's objective, use simulation to evaluate Strassel's bid alternatives of $130,000, $140,000, or $150,000. (Round your answers to the nearest dollar.) expected profit for a bid of $130,000 30,000 X expected profit for a bid of $140,000 $20,000.00 x 10,000 expected profit for a bid of $150,000 A bid of --Select-results in the largest mean profit of the three alternatives.
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 $160,000. The curre 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 $150,000. (a) Develop a worksheet that can be used to simulate the bids made by the two competitors. Strassel is considering a bid of $130,000 for the property. Using a simulation of 1,000 trials, what is the estimate of the probability Strassel will be able to obtain the property using a bid of $130,000? (Round your answer to the nearest tenth of a percent.) 32.7 x % (b) How much does Strassel need to bid to be assured of obtaining the property? O $130,000 O $140,000 Ⓒ$150,000 (c) Use the simulation model to compute the profit for each trial of the simulation run. With maximization of profit as Strassel's objective, use simulation to evaluate Strassel's bid alternatives of $130,000, $140,000, or $150,000. (Round your answers to the nearest dollar.) expected profit for a bid of $130,000 30,000 X expected profit for a bid of $140,000 $20,000.00 x 10,000 expected profit for a bid of $150,000 A bid of --Select-results in the largest mean profit of the three alternatives.
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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i am not sure why a and c are incorrect. please give a clear answer and solution.
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 $160,000. 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 $150,000.
(a) Develop a worksheet that can be used to simulate the bids made by the two competitors. Strassel is considering a bid of $130,000 for the property. Using a simulation of 1,000 trials, what is the estimate of the probability Strassel will be able to obtain the
property using a bid of $130,000? (Round your answer to the nearest tenth of a percent.)
32.7 X %
(b) How much does Strassel need to bid to be assured of obtaining the property?
O $130,000
O $140,000
O $150,000
(c) Use the simulation model to compute the profit for each trial of the simulation run. With maximization of profit as Strassel's objective, use simulation to evaluate Strassel's bid alternatives of $130,000, $140,000, or $150,000. (Round your answers to the
nearest dollar.)
30,000 X
$20,000.00 X
10,000
expected profit for a bid of $130,000
expected profit for a bid of $140,000
expected profit for a bid of $150,000
A bid of ---Select--- results in the largest mean profit of the three alternatives.
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