Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 10, Problem 51P
Summary Introduction
To explain: The way simulation can be used to determine whether a particular claim should be filed.
Simulation modeling:
A simulation model is a computerized model that depicts or imitates a real-life situation. It is like other mathematical models except that it incorporates the concept of uncertainty in one or more number of the input variables.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Suppose you are 45 and have a $410,000 face amount, 15-year, limited-payment, participating policy (dividends will be used to build up the cash value of the policy). Your annual premium is $1,435. The cash value of the policy is expected to be $16,400 in 15 years. Using time value of money and assuming you could invest your money elsewhere for a 7 percent annual yield, calculate the net cost of insurance. Use (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D)
According to the Institute of Internal Auditors, risk is a combination of the probability of an event and its consequence and that consequences can range from positive to negative
True or False?
Imagine 5 different events that would cause losses that would be covered by renter's insurance. Write a one-sentence description of each event and a description and estimate of the amount of losses that would result if you experienced the event.
Chapter 10 Solutions
Practical Management Science
Ch. 10.2 - Use the RAND function and the Copy command to...Ch. 10.2 - Use Excels functions (not @RISK) to generate 1000...Ch. 10.2 - Use @RISK to draw a uniform distribution from 400...Ch. 10.2 - Use @RISK to draw a normal distribution with mean...Ch. 10.2 - Use @RISK to draw a triangular distribution with...Ch. 10.2 - Use @RISK to draw a binomial distribution that...Ch. 10.2 - Use @RISK to draw a triangular distribution with...Ch. 10.2 - We all hate to keep track of small change. By...Ch. 10.4 - Prob. 11PCh. 10.4 - In August of the current year, a car dealer is...
Ch. 10.4 - Prob. 13PCh. 10.4 - Prob. 14PCh. 10.4 - Prob. 15PCh. 10.5 - If you add several normally distributed random...Ch. 10.5 - In Problem 11 from the previous section, we stated...Ch. 10.5 - Continuing the previous problem, assume, as in...Ch. 10.5 - In Problem 12 of the previous section, suppose...Ch. 10.5 - Use @RISK to analyze the sweatshirt situation in...Ch. 10.5 - Although the normal distribution is a reasonable...Ch. 10.6 - When you use @RISKs correlation feature to...Ch. 10.6 - Prob. 24PCh. 10.6 - Prob. 25PCh. 10.6 - Prob. 28PCh. 10 - Six months before its annual convention, the...Ch. 10 - Prob. 30PCh. 10 - A new edition of a very popular textbook will be...Ch. 10 - Prob. 32PCh. 10 - W. L. Brown, a direct marketer of womens clothing,...Ch. 10 - Assume that all of a companys job applicants must...Ch. 10 - Lemingtons is trying to determine how many Jean...Ch. 10 - Dilberts Department Store is trying to determine...Ch. 10 - It is surprising (but true) that if 23 people are...Ch. 10 - Prob. 40PCh. 10 - At the beginning of each week, a machine is in one...Ch. 10 - Simulation can be used to illustrate a number of...Ch. 10 - Prob. 43PCh. 10 - Prob. 46PCh. 10 - If you want to replicate the results of a...Ch. 10 - Suppose you simulate a gambling situation where...Ch. 10 - Prob. 49PCh. 10 - Big Hit Video must determine how many copies of a...Ch. 10 - Prob. 51PCh. 10 - Prob. 52PCh. 10 - Why is the RISKCORRMAT function necessary? How...Ch. 10 - Consider the claim that normally distributed...Ch. 10 - Prob. 55PCh. 10 - When you use a RISKSIMTABLE function for a...Ch. 10 - Consider a situation where there is a cost that is...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- To a health insurance company, the total claims (payout) expected for a group of insured persons depend on all of the following except a)the number of insured persons in the group. b)the average income of persons in the group. c)the average cost of an illness. d)the probability of illness for the insured persons.arrow_forwardRonny took out a 7-year mortgage. For 7 years, he paid the lender monthly payments of $950. Then, after 7 years, his last payment comes due at $55,000. What kind of mortgage did Ronny most likely have? a partially amortized loan a wraparound loan an FHA lean a reverse mortgagearrow_forwardWithin the context of insurance companies, risk management mainly focuses on: Select one: a. Ensuring premiums invested yield planned rate of return b. Reducing the high frequency of insurance claims c. Loss prevention and mitigation d. Prevent underwriting riskarrow_forward
- Comment on how insurance can help Bob in his current situation. Bob is a 25-year-old qualified contractor who is a subcontractor to various builders. He is earning P300,000 gross but pays P100,000 in expenses, most of which are fixed expenses ie a leased car and leased equipment. Bob rents an apartment and spends the rest of his earnings of P200,000 on living and entertainment expenses. Bob has little in the way of savings. What if Bob doesn’t have insurance? Bob has a car accident and is hospitalized for one month. He then faces a long and painful rehabilitation process of 12 months to try to regain the use of one of his arms. Even with private health insurance, there are medical bills to be paid particularly for physiotherapy and rehabilitation sessions. Bob has no income for 13 months but must continue to pay his lease costs of P100,000 per annum. What little money Bob receives in disability payments from the government won’t cover his rental costs. Bob has to move back home and…arrow_forwardWhich of the following statement regarding liability risk is (are) TRUE? There is no maximum upper limit of loss. A lien can be placed on your income and financial assets. Defense costs can be enormous. All of above are true.arrow_forwardTwo 9-year-old boys are watching a television replay of a boxing match between Muhammad Ali and Joe Frazier on a program called “Great Fights of the Century.” Since the fight took place before they were old enough to remember the outcome, neither knows who won and they bet on the outcome. Tom bets on Ali and Tim bets on Frazier. Does risk exist in this situation? Defend your answer.arrow_forward
- A 75% leased apartment building that you recently acquired in Las Vegas, Nevada had an estimated annual NOI of $180,000. After you complete some needed renovations and improvements, you believe you can increase the occupancy to 95% while achieving higher rents and reduced operating costs, and you believe the renovated building will sell at a lower cap rate. If you can increase the NOI by 50% and reduce the sale cap rate by 25%, you will increase the sale price of the property by: a. 75% b. 25% c. 50% d. 100%arrow_forwardThe at risk rules do not apply to activities carried on for the production of income. True or false.arrow_forwardSuppose that a car-rental agency offers insurance for a week that costs $100. A minor fender bender will cost $3500, whereas a major accident might cost $16,000 in repairs. Without the insurance, you would be personally liable for any damages. What should you do? Clearly, there are two decision alternatives: take the insurance, or do not take the insurance. The uncertain consequences, or events that might occur, are that you would not be involved in an accident, that you would be involved ina fender bender, or that you would be involved in a major accident. Develop a payoff table for this situation. What decision should you make using each of the following strategies?a) aggressive strategyb) conservative strategyc) opportunity-loss strategyarrow_forward
- A homebuyer recently obtained a loan to purchase a house. The lender offered a lower interest rate because the loan is secured. Why would a real estate loan be considered a secure loan? О The loan is backed by the property itself. If the borrower defaults on the loan, the lender can sell the property to get their money back. O In order to qualify for a home loan, the borrower must have good credit. Good credit is a form of security for the lender. O All real estate loans are considered unsecure. O Most home loans are long-term loans, which are considered low-risk from the lender's perspective.arrow_forwardThe actual cash value of a property is BEST described as: OA its original cost only its original cost less depreciation its replacement cost less depreciation the cost to repair or rebuild the property OD. Rearrow_forwardWhen a lender uses a deed of trust to secure real estate financing, the lender normally cannot recover the difference between what the lender is owed for the remaining balance of the loan versus what the lender recovers by retaking the property via a foreclosure and re-selling the property. This difference is known as a:arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Single Exponential Smoothing & Weighted Moving Average Time Series Forecasting; Author: Matt Macarty;https://www.youtube.com/watch?v=IjETktmL4Kg;License: Standard YouTube License, CC-BY
Introduction to Forecasting - with Examples; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=98K7AG32qv8;License: Standard Youtube License