Strassel Investors buys real estate, develops it, and resells it for a profit. A new property is avalable, and Bud Strassel, the president and owner of Strasel trvestors, belevesif he purchases and develops this property, It can then be soid for $160,000. The current property owner has asked for bids and stated that the property wil be sold for the highest bid in excess of s100.000 Two competitors will be submitting bids for the property. Strassel does nat know what the competitors wil bid, but he ssumes 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. Strasel in considering a bid of s130,000 for the property. Using a simulation of 1.000 trias, what is the estimate of the probability Strassel will be able to obtain the property using a bid of s130,000 (Round your answer to the nearest tenth of a pertent.) of: (b) How much does Strassel need to bid to be assured of obtaining the property? O S130,000 O140.000 150,000 (c) Use the simulation model to compute the profit for each trial of the simulation run. With maximzation of proht as Strassels objective, ve simuletion to evaluate Strasial's bid aternatives of s130,000, s140,000, or $150,000. (Round your answers to the nearest dollar) expected profit for a bid of s130,000 expected profit for a bid of $140.000 expected profit for a bid of $150,000 A bid of $140.000 reaults 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 avalable, and Bud Strassel, the president and owner of Strasel trvestors, belevesif he purchases and develops this property, It can then be soid for $160,000. The current property owner has asked for bids and stated that the property wil be sold for the highest bid in excess of s100.000 Two competitors will be submitting bids for the property. Strassel does nat know what the competitors wil bid, but he ssumes 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. Strasel in considering a bid of s130,000 for the property. Using a simulation of 1.000 trias, what is the estimate of the probability Strassel will be able to obtain the property using a bid of s130,000 (Round your answer to the nearest tenth of a pertent.) of: (b) How much does Strassel need to bid to be assured of obtaining the property? O S130,000 O140.000 150,000 (c) Use the simulation model to compute the profit for each trial of the simulation run. With maximzation of proht as Strassels objective, ve simuletion to evaluate Strasial's bid aternatives of s130,000, s140,000, or $150,000. (Round your answers to the nearest dollar) expected profit for a bid of s130,000 expected profit for a bid of $140.000 expected profit for a bid of $150,000 A bid of $140.000 reaults in the largest mean profit of the three alternatives.
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...
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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 Strasel tnvestors, bellevesf 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 wil be sold for the highest bid in excess of s100,000
Two competitors will be submitting bids for the property. Strassel does not know what the competitors wil bid, but he asumes for planning purposes that the amount bid by each compettor will
be uniformly distributed between $100,000 and S150,000.
(a) Develop a worksheet that can be used to simulate the bids made by the two competitors. Strasel in considering a bid of s130,000 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.)
(b) How much does Strassel need to bid to be assured of obtaining the property?
O s130,000
Os140.000
150,000
(c) Use the simulation model to compute the profit for each trial of the simulation run. With maximzation of proht as Strael's objective, se simulation to evaluate Strassels bid ahernatives
of s130,000, s140,000, or $150,000. (Round your answers to the nearest dollar.)
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 $140.000
results in the largest mean profit of the three alternatives.
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