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    Homework 3

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    Yuan Jia Hou
    This document contains 7 problems related to probabilistic systems modeling. Students are instructed to show their work for calculation problems and may construct distribution graphs by hand or using software like Python or Excel. The problems cover topics like single period inventory situations, maximizing revenue from donut sales with varying customer numbers and prices, investment strategies with changing probabilities and returns, and determining optimal production schedules.

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    Homework 3

    Uploaded by

    Yuan Jia Hou
    174 views2 pages
    This document contains 7 problems related to probabilistic systems modeling. Students are instructed to show their work for calculation problems and may construct distribution graphs by hand or using software like Python or Excel. The problems cover topics like single period inventory situations, maximizing revenue from donut sales with varying customer numbers and prices, investment strategies with changing probabilities and returns, and determining optimal production schedules.

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    Homework 3 (2)

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    This document contains 7 problems related to probabilistic systems modeling. Students are instructed to show their work for calculation problems and may construct distribution graphs by hand or using software like Python or Excel. The problems cover topics like single period inventory situations, maximizing revenue from donut sales with varying customer numbers and prices, investment strategies with changing probabilities and returns, and determining optimal production schedules.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    174 views2 pages

    Homework 3

    Uploaded by

    Yuan Jia Hou
    This document contains 7 problems related to probabilistic systems modeling. Students are instructed to show their work for calculation problems and may construct distribution graphs by hand or using software like Python or Excel. The problems cover topics like single period inventory situations, maximizing revenue from donut sales with varying customer numbers and prices, investment strategies with changing probabilities and returns, and determining optimal production schedules.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    PROBABILISTIC SYSTEMS MODELS

    ISE 4633-001
    Due Tuesday March 4th , 2019

    I need to see your work for calculation problems. Writing the final answer does not give
    you any credit! In case, you are required to construct a distribution graph, pdf, and CDF can
    be either hand drawn or via Python or Excel, if you construct the graph via computer
    software, you will get extra points.

    Problem 1
    The unit holding cost in a single period inventory situation is $1. If the order quantity is 4
    units, find the permissible range of the unit penalty cost implied by the optimal conditions.
    Assume that the demand occurs instantaneously at the start of the period and that the pdf
    of demand is as follows.
    𝐷 0 1 2 3 4 5 6 7 8
    𝑓(𝐷) 0.05 0.1 0.1 0.2 0.25 0.15 0.05 0.05 0.05

    Problem 2
    Quickstep provides its customers its customers with coffee and donuts at 6:00 am each day.
    The convenience store buys donuts for 7 cents apiece and sells them for 25 cents apiece
    until 8:00 am., the donut sells for 5 cents apiece. The number of customers buying donuts
    between 6:00 to 8:00 am is uniformly distributed between 30 to 50. Each customer usually
    orders 3 donuts with coffee. Approximately many dozen donuts should be stocked every
    morning to maximize the revenue?

    Problem 3
    Work Problem 2, Assuming that there is a fixed cost of $10 associated with the delivery of
    donuts
    Problem 4
    For the below network, it is desired to determine the shortest rout between cities 1 to 7.
    Define the stages and the states using backward recursion and then solve the problem.

    Problem 5
    A farmer owns k sheep. At the end of each year, a decision is made as to how many to sell or
    keep. The profit from selling a sheep is in year 𝑖 is 𝑝𝑖 . The sheep kept in year 𝑖 will double in
    number in year 𝑖 + 1. The farmer plans to sell out completely at the end of n years
    Solve the problem for n=3 years, k=2 sheep, 𝑝1 = $100, 𝑝2 = $130, 𝑝3 = $120

    Problem 6
    In the investment example we worked in class. Find the optimal investment strategy,
    assuming the probabilities 𝑝𝑘 and return 𝑟𝑘 vary for the 4 years according to the following
    data

    Problem 7
    HiTec has just started to produce supercomputers for a limited period of 4 years. The
    annual demand, D, for the new computer is described by the following distribution:

    p(D = 1)= .5, p(D = 2) = .3, p(D = 3) = .2


    The production capacity of the plant is three computers annually at the cost of $5 million
    each. The actual number of computers produced per year may not equal the demand
    exactly. An unsold computer at the end of a year incurs $1 million in storage and
    maintenance costs. A loss of $2 million occurs if the delivery of a computer is delayed by 1
    year. HiTec will not accept new orders beyond year 4 but will continue production in year 5
    to satisfy any unfilled demand at the end of year 4. Determine the optimal annual
    production schedule for HiTec.

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