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MindTap Business Statistics for Ragsdale's Spreadsheet Modeling & Decision Analysis, 8th Edition, [Instant Access], 2 terms (12 months)
8th Edition
ISBN: 9781337274876
Author: Cliff Ragsdale
Publisher: Cengage Learning US
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The research department of Unilever Ltd has recommended to the marketing department to launch a shampoo of three different types. The marketing manager has to decide one of the types of shampoo to be launched under the following estimated pay offs for various levels of sales:
Estimated levels of sales
15,000
10,000
5,000
1. Egg shampoo
2. Clinic shampoo
3. Deluxe shampoo
3000
1000
1000
3000
3000
250
1000
1000
1000
What will be the marketing manager’s decision if
i. Maximum criterion is applied?
ii. Minimax criterion is applied?
iii. Maximax criterion is applied?
iv. Laplace criterion is used?
v. Hurwicz criterion is used? Use α = 0.75
To what extent may the concept of optimality be used in dynamic programming?
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- How do you know when an optimal solution has been reached?arrow_forwardThe Wisteria University athletic department is considering a campaign next year to raise funds for a new athletic field. To a large extent, the response to the campaign depends on how successful the soccer team is in the fall. In the past they have had winning seasons 60% of the time. If they have a winning season (G), many alumni will contribute and the campaign will raise $3 million. If they have a losing season (P), very few will contribute and they will lose $2 million. If the campaign does not take place, no cost is incurred. On September 1, prior to the start of the season, the athletics department must decide whether to conduct the campaign next year. d) A famous soccer guru, William Walsh, has offered to evaluate whether the team will have a winning season. For $100,000 he will evaluate the team's spring and preseason practices. William will give his prediction on September 1 as to what type of season, G or P, the team will have. In similar situations in the past, when…arrow_forwardThe Wisteria University athletic department is considering a campaign next year to raise funds for a new athletic field. To a large extent, the response to the campaign depends on how successful the soccer team is in the fall. In the past they have had winning seasons 60% of the time. If they have a winning season (G), many alumni will contribute and the campaign will raise $3 million. If they have a losing season (P), very few will contribute and they will lose $2 million. If the campaign does not take place, no cost is incurred. On September 1, prior to the start of the season, the athletics department must decide whether to conduct the campaign next year. a) Develop a decision tree formulation for this problem by identifying the alternative options, the states of nature, and the payoff matrix. b) According to the maximum expected value rule, should the campaign be conducted? c) What is the VEIP? d) A famous soccer guru, William Walsh, has offered to evaluate whether the team…arrow_forward
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- Is it possible to describe how optimality is used in dynamic programming?arrow_forwardPaul Atreides wants to save money to meet three objectives. First, he would like to be able to retire 20 years from now with retirement income of $15,000 per month for 20 years, with the first payment received 20 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 10 years at an estimated cost of $100,000. Third, after he passes on at the end of the 20 years of withdrawals, he would like to leave an inheritance of $100,000 to Chani, his girlfriend. He can afford to save $3,000 per month for the next 10 years. If he can earn an 10 percent EAR before he retires and an 9 percent EAR after he retires, how much will he have to save each month in years 11 through 20? Note: To provide coherence and organization to your work, arrange your work for this question as follows: Step 1: Convert both EARs to annual nominal rates Step 2: Compute the amount needed at the 20-year mark from now Step 3: Compute the amount in hand at the 10-year mark from now Step…arrow_forwardPaul Atreides wants to save money to meet three objectives. First, he would like to be able to retire 20 years from now with retirement income of $15,000 per month for 20 years, with the first payment received 20 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 10 years at an estimated cost of $100,000. Third, after he passes on at the end of the 20 years of withdrawals, he would like to leave an inheritance of $100,000 to Chani, his girlfriend. He can afford to save $3,000 per month for the next 10 years. If he can earn an 10 percent EAR before he retires and an 9 percent EAR after he retires, how much will he have to save each month in years 11 through 20?arrow_forward
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