Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Chapter 4.7, Problem 30P
Summary Introduction
To run: A one-way sensitivity analysis on
Linear programming:
It is a mathematical modeling procedure where a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.
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Where a financial institution makes a loan commitment, the borrower, in drawing down on their loan commitment, causes increased cash flow needs by the DI to fund the loan commitments. There are three ways a DI can offset the effect of Asset-side liquidity risk such as drawing down of a loan commitment in all of the following sitiuations Except:
a.
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b.
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c.
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d.
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The Schoch Museum (see Problem 30 in Chapter 11) is embarking on a five-year fundraising campaign. As a nonprofit institution, the museum finds it challenging to acquire new donors, as many donors do not contribute every year. Suppose that the museum has identified a pool of 8,000 potential donors. The actual number of donors in the first year of the campaign is estimated to be somewhere between 60% and 75% of this pool. For each subsequent year, the museum expects that a certain percentage of current donors will discontinue their contributions. This is expected to be between 10% and 60%, with a most likely value of 35%. In addition, the museum expects to attract some percentage of new donors. This is assumed to be between 5% and 40% of the current year’s donors, with a most likely value of 10%. The average contribution in the first year is assumed to be $50 and will increase at a rate between 0% and 8% each subsequent year, with the most likely increase of 2.5%. Develop and analyze a…
Chapter 4 Solutions
Practical Management Science
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