Decision Tree/Probability

Company XYZ must decide whether or not to introduce a new version of its product. The president thinks that the probability is 0.75 that the new version will be successful and 0.25 that it will not. If the product is a success, the company will gain $300,000. If it is a failure, the company will lose $150,000. a. Construct a decision tree that you can use to solve the problem, assuming the president is risk neutral. b. Will the risk-neutral president decide to introduce the new product? c. What is the expected value of perfect information? d. Calculate the probability that the new version will be successful that will make a risk neutral president indifferent betwee... click for more

Projected Total Profit

Beaver's makes 3 products. Each requires work in a three different departments. Labor-hour Reqmts Dept Prod1 Prod2 Prod3 Tot avail A 1.50 3.00 2.00 450.00 B 2.00 1.00 2.50 350.00 C 0.25 0.25 0.25 50.00 Profit 25.00 28.00 30.00 Setup costs 400.00 550.00 600.00 Demand 175 150 140 What is the projected total profit and how much of each product should be produced?

Linear Programming

See attached file for full problem description.

Operating Costs and Overbooking

An airline serving Denver's International Airport and Steamboat Springs, Colorado, is considering overbooking its flights to avoid flying with empty seats. For example, the ticket agent is thinking of taking seven reservations for an airlplane that has only six seats. During the pst month, the no-show experience has been: No-shows 0 1 2 3 4 Percentage 30 25 20 15 10 The operating costs associated with each flight are pilot, $150.00; first officer, $100; fuel $30; and landing fee, $20.00. What would be your recommendation for overbooking if a one-way ticket sells for $80 and the cost of not honoring a reservation is a free lift ticket work $50., plus a seat on the next fl... click for more

Convex Set

Please see the attached question!