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“Damn the torpedoes: full-speed ahead.” Is it possible that this military philosophy can be applied to project management and lead to project success?
A decision maker with a quadratic utility function of the form (13.12) is offered the following lottery-What is the certainty equivalent of the lottery?
In the minimum cost lot-sizing problem, we assumed that demand must be satisfied immediately; by a similar token, in the maximum profit lot sizing model.
The Research and Development (R&D) division of your firm has developed a new product that could be immediately launched on the market.
For each scenario, we have the value of your property and a probability. Clearly, in scenario 1 there is no fire and no loss.
An investor has an initial wealth WQ that must be allocated between a risk-free asset, with certain return rf, and a risky asset.
Assume that daily returns follow a multivariate normal distribution; daily volatilities for the two stock shares are 2% and 3%, respectively.
We know that VaR, in general, is not a subadditive risk measure. Consider a portfolio of two assets, with jointly normal returns.
Apply one-way ANOVA to check equality of means for the sample-Provide complete and step by step solution for the question.
In order to estimate the fraction of defective parts, you take a sample of size 1000 and find that 63 are not acceptable.
Does this sequence converge in probability to a number? What about convergence in quadratic mean?
Consider an exponential distribution with rate ?. On the basis of a random sample of size n, apply the method of moments to estimate ?.
The product is ordered once per month, and the delivery lead time is very small, so that the useful shelf life is really 1 month.
After observing demand in the last time bucket, calculate forecasts with horizons h = 2 and h = 3. Using a fit sample of size 3, initialize the smoother.
The dataset is a random sample from a normal distribution. Find a 95% confidence interval for variance.
A study was done to measure the impact of fatigue on human performance when carrying out a certain task.
Assuming that IQ is normally distributed, how would you estimate the probability that IQ is larger than 130? What if you do not want to assume normality?
A friend of yours is an analyst and is considering a probability model to capture uncertainty in monthly demand of an item featuring high-volume sales.
Find the expected value E[W] and the probability P(W > 120).
You have just issued a replenishment order to your supplier, which is not quite reliable.
You work for a manufacturing firm producing items with a limited time window for sale. Items are sold by a distributor facing uncertain demand.
If the probability that the competitor enters the market is assumed to be 50%, how many items should you order to maximize expected profit?
You are in charge of component inventory control. Your firm produces end items P1 and P2, which share a common component C.
Compute the one-day value at risk, at 95% level, assuming normally distributed daily returns. Daily volatility is 2% for IFM and 4% for Peculiar Motors.
You have to compute a confidence interval for the expected value of a random variable. Using a standard procedure, you take a random sample of size N = 20.