Exam 7: Nonlinear Optimization Models

Exhibit 7-3 A company has the following historical data on the number of ad exposures and the corresponding number of units sold of one of its products: -[Part 2] Refer to Exhibit 7-3.Formulate a nonlinear optimization model to find the parameters of a function of the form: f(x)= a(1 -e ^{- bx})to model demand for its product as a function of ad exposures (x).In terms of fit,is this model better or worse than the model in Part 1? Explain your answer

If you try different starting values for the changing cells and obtain different solutions:

In pricing models,elasticity of demand is an input with specifies the:

A function is convex if a line drawn connecting two points on the curve never lies below the curve.

A function is concave if:

Relative to linear optimization models,nonlinear optimization models are typically more difficult to solve.

Which of the following is not one of the useful options within Solver's Multistart box?

As an objective,minimizing the sum of squared errors is equivalent to minimizing the

Which of the following is not one of the common types of nonlinear models?

Exhibit 7-4 You are given the following means,standard deviations,and correlations for the annual return on three stocks.The means are 0.08,0.10,and 0.15.The standard deviations are 0.15,0.20,and 0.30.The correlation between stocks 1 and 2 is 0.62,between stocks 1 and 3 is 0.32,and between stocks 2 and 3 is 0.43. -[Part 1] Refer to Exhibit 7-4.Determine the minimum variance portfolio that yields an expected annual return of at least 0.10