Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 9.5, Problem 19P
Summary Introduction
To determine: The actual probability that Person X have disease.
Introduction: Simulation model is the digital prototype of the physical model that helps to
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Senior executives at an oil company are trying to decide whether to drill for oil in a particular field. It costs the company $750,000 to drill. The company estimates that if oil is found the estimated value will be $3,650,000. At present, the company believes that there is a 48% chance that the field actually contains oil.
Before drilling, the company can hire an expert at a cost of $75,000 to perform tests to make a prediction of whether oil is present. Based on a similar test, the probability that the test will predict oil on the field is 0.55. The probability of actually finding oil when oil was predicted is 0.85. The probability of actually finding oil when no oil was predicted is 0.2.
What is the EMV if the company hires the expert?
Discuss how likely it is that 70% of students will pass a college course with a B or an A. Then, consider the following questions:
Would you look at data showing the success rate of previous courses?
Would you check whether the current GPA of students in your class is high or low? What other data would you like to have before you determine the probability of 70% of students passing this course with a B or an A?
A polling firm is taking a survey regarding a proposed new law. Of the voters polled, 30% are in favor of the law. If 10 people are surveyed, what is the probability that 4 will indicate that they are opposed to the passage of the new law?
Chapter 9 Solutions
Practical Management Science
Ch. 9.2 - Prob. 1PCh. 9.2 - Prob. 2PCh. 9.2 - Prob. 3PCh. 9.3 - Prob. 4PCh. 9.3 - Prob. 5PCh. 9.3 - Prob. 6PCh. 9.3 - Prob. 7PCh. 9.4 - Explain in some detail how the PrecisionTree...Ch. 9.4 - Prob. 9PCh. 9.4 - Prob. 10P
Ch. 9.5 - Prob. 11PCh. 9.5 - Prob. 12PCh. 9.5 - Prob. 13PCh. 9.5 - Prob. 17PCh. 9.5 - Prob. 18PCh. 9.5 - Prob. 19PCh. 9.5 - Prob. 21PCh. 9.5 - The model in Example 9.3 has only two market...Ch. 9.6 - Prob. 26PCh. 9.6 - Prob. 27PCh. 9.6 - Prob. 28PCh. 9 - Prob. 30PCh. 9 - Prob. 31PCh. 9 - Prob. 32PCh. 9 - Prob. 34PCh. 9 - Prob. 36PCh. 9 - Prob. 37PCh. 9 - Prob. 38PCh. 9 - Prob. 39PCh. 9 - Prob. 46PCh. 9 - Prob. 48PCh. 9 - Prob. 53PCh. 9 - Prob. 67PCh. 9 - Prob. 68PCh. 9 - Prob. 69PCh. 9 - Prob. 70PCh. 9 - Prob. 71PCh. 9 - Prob. 72PCh. 9 - Prob. 73PCh. 9 - Prob. 74PCh. 9 - Prob. 75PCh. 9 - Prob. 76PCh. 9 - Prob. 77P
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
- A person must score in the upper 2% of the population on an IQ test to qualify for membership in Mensa. If IQ scores are normally distributed with a mean of 100 and a standard deviation of 15, what score must a person have to qualify for Mensa?arrow_forwardA salesperson uses three different airlines. The probabilities of switching from one airline to another in consecutive flights are shown below. If the last flight was on Delta, what is the probability that the next was on American? American Delta Southwest American 0.5 0.25 0.25 Delta 0.2 0.6 0.2 Southwest 0.3 0.3 0.4 A 0.5 B 0.2 C 0.25 D 0.6arrow_forwardA NY Times best-selling author wants to write a new book as either volume II of her earlier successful book or an autobiography. She believes that by writing the volume II, given her previous success, she will have a 50% chance of placing it with a major publisher where it should ultimately sell about 40,000 copies. However, the worst-case scenario, if she can’t get a major publisher to take it, then she thinks there is 80% chance of placing it with a smaller publisher, with sales of 30,000 copies. On the other hand, if she writes an autobiography, considering the potential interest in her journey as successful writer, she thinks there will be 40% chance of placing it with a major publisher, and it should result in ultimate sales of about 50,000 copies. If she can’t get a major publisher to take it, the worst-case scenario, she thinks there is a 50% chance of placing it with a smaller publisher, with ultimate sales of 35,000 copies. Construct a decision tree to help this author…arrow_forward
- A recent 10-year study conducted by a research team at the Great Falls Medical School was conducted to assess how age, systolic blood pressure, and smoking relate to the risk of strokes. Assume that the following data are from a portion of this study. Risk is interpreted as the probability (times 100) that the patient will have a stroke over the next 10-year period. For the smoking variable, define a dummy variable with 1 indicating a smoker and 0 indicating a nonsmoker. The data is provided below: Risk of Strokes Age Systolic Blood Pressure Smoker 10 59 156 0 25 65 163 0 12 60 158 0 57 86 177 1 28 59 196 0 50 76 189 1 17 57 159 1 34 78 120 1 37 80 135 1 15 78 98 0 22 71 152 1 39 70 173 1 17 67 135 0 48 77 209 1 18 60 199 0 36 82 119 1 10 66 166 0 34 80 125 1 4 62 117 0 38 59…arrow_forwardThe Nitro Fertilizer Company is developing a newfertilizer. If Nitro markets the product and it is successful,the company will earn a $50,000 profit; if it is unsuccessful,the company will lose $35,000. In the past, similar productshave been successful 60% of the time. At a cost of $5,000,the effectiveness of the new fertilizer can be tested. If thetest result is favorable, there is an 80% chance that thefertilizer will be successful. If the test result is unfavorable,there is only a 30% chance that the fertilizer will besuccessful. There is a 60% chance of a favorable test resultand a 40% chance of an unfavorable test result. DetermineNitro’s optimal strategy. Also find EVSI and EVPI.arrow_forwardProblem Solving. The JSM company has been approached by an individual who has an idea for a new product. He wants to sell this idea for P32, 000. If the idea is purchased, the product must be developed. The company can develop the product at a cost of P64,000, and there is a 50% chance that they can develop the product. TMJ INDUSTRY has offered to develop the product. It will also cost P65,000, but they are only 40% certain that they can develop the product. No charge will be levied unless the job is successful. If the product is developed, it must be advertised. There are two plans for the advertisement. Plan A which costs P55,000 with 75% chances of success and Plan B which cost P38,000 with a 50% probability of success. The management believes that if the product is a success, the return will be P50 million. a) Should JSM purchase the idea?b.) who should develop the product?c.) which plan of advertisement should be adopted?arrow_forward
- Which of the following gambles has the largest objective risk? 20% chance of winning $100 and 80% chance of losing $100 50% chance of winning $10,000 and 50% chance of losing $10,000 50% chance of winning nothing and 50% chance of losing $100 50% chance of winning $100 and 50% chance of winning nothingarrow_forward4. A credit rating company recommends granting of credit cards based on several criteria. One is annual income. If the annual income of applicants is normally dis- tributed with mean $22,000 and standard deviation $4,800 and the company recommends no applicant unless his or her income exceeds $15,000, what fraction of the applicants are denied on this basis?arrow_forwardA hardware company sells a lot of low-cost, high volume products. For one such product, it is equally likely that annual unit sales will be low or high. If sales are low (30,000), the company can sell the product for $20 per unit. If sales are high (70,000), a competitor will enter and the company will be able to sell the product for only $15 per unit. The variable cost per unit has a 20% chance of being $10, a 60% chance of being $11, and a 20% chance of being $12. Annual fixed costs are $20,000.a. Use simulation to estimate the company’s expected annual profit.b. Find a 95% interval for the company’s annual profit, that is, an interval such that about 95% of the actual profits are inside it.c. Now suppose that annual unit sales, variable cost, and unit price are equal to their respective expected values—that is, there is no uncertainty. Determine the company’s annual profit for this scenario. d. Can you conclude from the results in parts a and c that the expected profit from a…arrow_forward
- A television network earns an average of $25 million each season from a hit program and loses an average of $8 million each season on a program that turns out to be a flop. Of all programs picked up by this network in recent years, 25% turn out to be hits and 75% turn out to be flops. At a cost of C dollars, a market research firm will analyze a pilot episode of a prospec- tive program and issue a report predicting whether the given programwill end up being a hit. If the program is actually going to be a hit, there is a 75% chance that the market researchers will predict the program to be a hit. If the program is actually going to be a flop, there is only a 30% chance that the market researchers will predict the program to be a hit.a. What is the maximum value of C that the network should be willing to pay the market research firm?b. Calculate and interpret EVPI for this decision problem.arrow_forwardSuppose you want to mine for gold. Your decisions are to build a mine or not, and to hire a geologist or not. If you find gold, you will earn R2 million in profit; if you fail to find gold, you will lose R0.5 million. On the geologist's website, he states he predicts success 50% of the time and failure 50% of the time; when he predicts success, then you are 80% likely to actually succeed; when he predicts failure, then you are 90% likely to actually fail. The geologist costs R0.1 million. You estimate without a geologist you have a 45% chance of success. Use a decision tree to maximize your expected value.arrow_forwardA company looking for venture capitalist funding is deciding on the design of its operating system (OS) for its new phone. The first option is to simply buy the OS from another company. This would result in sales of either 10,000 units if the market is not crowded with similar phones or sales of only 3,000 units if the market is crowded. If the company decides to design its own OS the phone would have sales of 70,000 units if the OS was popular but sales of only 2,000 if the OS was a failure. Suppose that to recoup the cost of designing their own OS the company would need to sell twice as many phones as when they simply buy the OS for the profit from the scenarios to be equal. Which option should the company choose if the probability that the market is/ is not crowded is 50% and the probability that the OS is popular is 75%?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,