Venus Flycatcher Company sells exotic plants and is trying to decide which of two hybrid plants to introduceinto their product line.ProbabilitiesHybrid/DemandHybrid 1Hybrid 2BothO Neither.2O Hybrid 2O Hybrid 1Low-10,000-15,000.3DemandMedium10,00010,000.5HighIf Venus wants to maximize expected profits, which Hybrid should be introduced?30,00035,000

Answered: Venus Flycatcher Company sells exotic…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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You are a statistician working at a small, but premium gourmet bakery. Your bakery can produce up to 4 elaborate custom wedding cakes per week (constrained by design time, bake time, and craft time). If weekly demand is greater than the four cakes you can make, you lose sales as the customers will order from the inferior-but-faster Amazon Baking Company instead (so, there are weeks that the demand for your cakes is not met). Each wedding cake costs 300 dollars (labor + materials) to produce, but sells for $1000. You estimate that the probability distribution of weekly demand for custom wedding cakes is as follows: Demand 0 1 2 3 4 5 6 7 Probability 0.05 0.05 0.10 0.20 0.40 0.10 0.05 0.05 What is the expected profit each week from wedding cake sales? (Hint: Remember, some sales will go elsewhere if you are at maximum crafting capacity.)
Question 3 (Minimum-variance Hedging) A farmer has a crop of grapefruit juice that will be ready for harvest and sale as 150000 pounds of grapefruit juice in 3 months. He is worried about possible price changes, so he is considering hedging - a financial engineering technique that minimizes future uncertainties in the cash flow. Typically, hedging is carried out using futures contract. However, unfortunately, there is no futures contract for grapefruit juice, but there is a futures contract for orange juice. Still, the farmer might consider using the futures contract for orange juice as a replacement for futures contract for grapefruit juice, in the hope that these two contracts are highly correlated due to the similarity of the underlying products. Currently, the spot prices are $1.20 per pound for orange juice and $1.50 per pound for grapefruit juice. The standard deviation of the prices of orange juice and grapefruit juice is about 20% per year, and the correlation coefficient…
We can use simulation to examine the fate of populations of living creatures. Consider the Asian stochastic beetle. Females of this insect have the following pattern of reproduction: • 20% of females die without female offspring, 30% have one female offspring, and 50% have two female offspring. • Different females reproduce independently. What will happen to the population of Asian stochastic beetles: will they increase rapidly, barely hold their own, or die out? It is enough to look at the female beetles, as long as there are some males around. The tree diagram represents the female descendants of one beetle through three generations. Label the nodes with the number of female descendants. A O E C P hp 0.3 0.2 I *** N 4 Raining now Answer Bank D 1 2 C نا 2:52 PM 11/27/2022 1
Corn crop yields vary by state. In 2008, IOWA averaged 172 bushels/acre. On September 3, 2009, the published market price per bushel was 319.25 cents/bushel. Jimmy Harold is analying a heavily leveraged purchase of some additional acreage, and his decision to purchase is based on the expected yield during his first crop year. After analyzing historical rainfall and long range weather forecasts, Jimmy compiled the following table of crop yields. rainfail yield(bu/acre) probability below average 154 0.15 average 172 0.4 above average 177 0.45 What is the expected corn crop yield, E[Y] based on the data in Jimmy's? E[Y] = (to 2 decimal places).
Question 3 My friend, Ahmad, is trying to determine which of two opportunities he should invest in (only one of them). His options are Bitcoin and S&P 500. If he invests in Bitcoin, he believes that he has a 10% chance of making 15% profit, a 25% chance of only 8% profit, 15% of losing 10% of his investment capital (-10%), and a 50% chance of no change in his investment capital (0%). IH Ahmad invests in S6PS00, he has a 70% chance for the 8% profit, a 25% chance for no change (0%), 3% chance for losing -10%, and 2% for a 15% profit. Ahmad is indifferent between the following lotteries. 15% o and also indifferent between 15% and If Ahmad wants to invest in what maximizes his expected return on investment, which investment is the best? Please note: x-0.79 and y-0.06. In the box below put the expected utility for the investment he should pick. Write your answer with three decimals.
A firm that operates a large, direct-to-consumer sales force would like to implement a system to monitor the progress of new agents. A key task for agents is to open new accounts; an account is a new customer to the business. To build such a system, the firm has been monitoring sales of new agents over the past 2 years. The response of interest is the profit to the firm (in dollars) of contracts sold by agents over their first year. Among the possible predictors of this performance is the number of new accounts developed by the agent during the first 3 months of work.
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.A new, miracle diabetes drug that diminishes major symptoms of diabetes has been approved by the FDA. Health care professionals and researchers believe that the new drug will prolong lifespan of diabetes patients. If the population is in steady state and the incidence is constant, what will the effect of this new drug be on the prevalence of diabetes in the population? Explain.
Suppose you are a production manager for a small firm that manufactures designer phone cases. Your production facility utilizes three machines. Quality is binary — each phone case is either defective or it is not defective. Each hour, Machines 1, 2, and 3 produce 10, 10 and 20 phone cases, respectively. But because the machines differ slightly in their technology, data on past production has shown that they differ in terms of their rates of defective output — specifically, Machines 1, 2, and 3 have rates of defective production of 2%, 4%, and 5%, respectively. If one phone case is selected randomly from one hour’s total output, and that phone case is found to be defective, what is the probability that it was produced by Machine 1? Machine 2? Machine 3?
Although investing all at once works best when stock prices are rising, dollar-cost averaging can be a good way to take advantage of a fluctuating market. Dollar-cost averaging is an investment strategy designed to reduce volatility in which securities are purchased in fixed dollar amounts at regular intervals regardless of what direction the market is moving. This strategy is also called the constant dollar plan. You are considering a hypothetical $1,200 investment in a media company's stock. Your choice is to invest the money all at once or dollar-cost average at the rate of $100 per month for one year. Assume that the company allows you to purchase "fractional" shares of its stock. (a) If you invested all of the money in January and bought the shares for $12 each, how many shares could you buy? shares (b) From the following chart of share prices, calculate the number of shares that would be purchased each month using dollar-cost averaging and the total shares for the year.…
The Harriet Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs the hotel $30 per room in variable costs (cleaning, bathroom items, etc.) each night a room is occupied. For each reservation accepted, there is a 5% chance that the guest will not arrive. If the hotel overbooks, it costs $200 to compensate guests whose reservations cannot be honored. How many reservations should the hotel accept if it wants to maximize the average daily profit?

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