# Crystal Ball Case Study

*Register to read the introduction…*Answer: TRUE

Page Ref: 440

Topic: Simulation of an Inventory Problem Using Crystal Ball

Difficulty: Moderate

25) A Decision Table is used in Excel to try at most 2 values automatically for a parameter in the model.

Answer: FALSE

Page Ref: 443

Topic: Simulation of an Inventory Problem Using Crystal Ball

Difficulty: Challenging

26) In Excel, the function =NORMINV(RAND(),100,5) will return a normally distributed random number with a standard deviation of 100 and mean of 5.

Answer: FALSE

Page Ref: 415

Topic: Role of Computers in Simulation

Difficulty: Moderate

27) A binomial distribution can yield only two outcomes.

Answer: TRUE

Page Ref: 416

Topic: Role of Computers in Simulation

Difficulty: Moderate

28) Monte Carlo simulation and operational gaming are the only two categories of simulation.

Answer: FALSE

Page Ref: 452

Topic: Other Types of Simulation Models

Difficulty: Moderate

10.2 Excel Problems

1) Cheap Rentals has collected the following information on the demand for compact cars over the last 30 days. Daily Demand

10

11

12

13

14

Number of Days

5

7

8

5

5

a. Use the historical data to estimate the probability distribution of demand for compact

*…show more content…*

E(X) = 0(0.1333) + 1(0.2000) + 3(0.3333) + 4(0.2000) = 2.0667

c.

d. Empirical mean = 2.05 and theoretical mean = 2.0667

3) Consider the event of tossing three coins. You are interested in computing the probability of getting three heads. Use Crystal Ball to simulate the event of tossing three coins 1000 times.

a. What is the theoretical probability of getting three heads?

b. What is the percentage of getting three heads using the 1000 simulated values?

Answer:

4) Consider the following game involving a single die. Someone offers to give you $1 if you toss a 1, $2 if you toss a 2, $3 if you toss a 3, etc. In other words, your earnings will correspond to the face value of the die. However, to play this game, each toss will cost you $2.50. You decide to use Crystal Ball to simulate your net earnings per toss based on 1000 simulation runs. What is your mean net earning per toss based on the simulated sample values?

Answer:

Note: Theoretically, the mean earnings per toss is $3.50 - $2.50 = $1.00.

5) In a game of backgammon, your movement is based on the outcome that you get from rolling a pair of dice. Tossing a pair of sixes on the very first roll will give you a significant initial advantage over your opponent. Use Crystal Ball to determine the odds of rolling a pair of sixes in 1000 simulation