Exam 10: Decision Models With Uncertainty and Risk

________ is an analytical method that determines the probabilities of the project completion times in project management models by assuming that the expected activity times define the critical path and that the distribution of project completion time is normal using the central limit theorem.

In the third year,the company is likely to realize a cumulative net profit of $(407,199,952)with a probability of ________.

Use the data shown below to answer the following question(s). Captain Jack Automobiles launched a new car and tabulated the below data for the new launch. The project manager identified the following distributions and parameters for these variables: Market size: normal with a mean of 2,000,000 units and a standard deviation of 400,000 units R&D costs: uniform between $639,000,000 and $781,000,000 Test Drives: lognormal with mean of $160,000,000 and standard deviation $16,000,000 Annual market growth factor: triangular with minimum = 2%,maximum = 6%,and most likely = 3% Annual market share growth rate: triangular with minimum = 15%,maximum = 25%,and most likely = 20% Use 5,000 trails to generate the simulation model for NPV using Crystal Ball. -Using the Tornado Chart tool,determine the assumption that has the least impact on the cumulative net profit for year 1.

Explain the Correlation Matrix tool used in Crystal Ball.

In Crystal Ball,Latin Hypercube sampling results in a more even distribution of forecast values than Monte Carlo forecasting because it samples the entire range of the distribution in a more consistent manner.

Explain in brief the functions of Crystal Ball.

How does the Scenario Analysis tool in Crystal Ball help in simulation?

Use the data set shown below to answer the following question(s). The demand at the ticket booking center can be modeled by a Poisson distribution with a mean of 220.Assume that each reservation has a constant probability of p = 0.02 of being cancelled.Use Crystal Ball functions for the model. -For the data given above,the number of reservations made is obtained using the formula ________.

Use the data set shown below to answer the following question(s). The demand at the ticket booking center can be modeled by a Poisson distribution with a mean of 220.Assume that each reservation has a constant probability of p = 0.02 of being cancelled.Use Crystal Ball functions for the model. -For the data given above,which of the following are defined as the forecast cells to run a simulation?

What is the Batch Fit Tool in Crystal ball used for?

In the forecast chart for the cumulative net profit for year 2,you first anchor the right grabber at infinity,enter 70 in the Certainty box,and then hit the enter button.The above set of action determines the ________.

Latin Hypercube sampling differs from Monte Carlo Sampling in that Latin Hypercube sampling ________.

Why is sampling from empirical data not advisable to use when defining an assumption?

Use the data shown below to answer the following question(s). Captain Jack Automobiles launched a new car and tabulated the below data for the new launch. The project manager identified the following distributions and parameters for these variables: Market size: normal with a mean of 2,000,000 units and a standard deviation of 400,000 units R&D costs: uniform between $639,000,000 and $781,000,000 Test Drives: lognormal with mean of $160,000,000 and standard deviation $16,000,000 Annual market growth factor: triangular with minimum = 2%,maximum = 6%,and most likely = 3% Annual market share growth rate: triangular with minimum = 15%,maximum = 25%,and most likely = 20% Use 5,000 trials to generate the simulation model using Crystal Ball. -The NPV to be generated from the data given above is called a(n)________.

Running the Tornado Charts tool before the Monte Carlo simulation helps in ________.

What is Monte Carlo simulation?

Use the data shown below to answer the following question(s). Captain Jack Automobiles launched a new car and tabulated the below data for the new launch. The project manager identified the following distributions and parameters for these variables: Market size: normal with a mean of 2,000,000 units and a standard deviation of 400,000 units R&D costs: uniform between $639,000,000 and $781,000,000 Test Drives: lognormal with mean of $160,000,000 and standard deviation $16,000,000 Annual market growth factor: triangular with minimum = 2%,maximum = 6%,and most likely = 3% Annual market share growth rate: triangular with minimum = 15%,maximum = 25%,and most likely = 20% Use 5,000 trials to generate the simulation model using Crystal Ball. -In the NPV forecast chart generated after running the simulation,you enter the number 0 in the left range box of the forecast chart and press the enter key.What exactly is the result of the above action?

Risk analysis seeks to examine the impacts of uncertainty in the estimates and their potential interaction with one another on the output variable of interest.

Optimum consulting is concerned about the maximum project time in one of their project management models.Using simulation,they found an estimate of the maximum project time to be about 364 days.To better understand the variability,Optimum consulting has used ________ that estimated the accuracy of the forecast statistics shown in the statistics view of the simulation results.

Use the data shown below to answer the following question(s). Captain Jack Automobiles launched a new car and tabulated the below data for the new launch. The project manager identified the following distributions and parameters for these variables: Market size: normal with a mean of 2,000,000 units and a standard deviation of 400,000 units R&D costs: uniform between $639,000,000 and $781,000,000 Test Drives: lognormal with mean of $160,000,000 and standard deviation $16,000,000 Annual market growth factor: triangular with minimum = 2%,maximum = 6%,and most likely = 3% Annual market share growth rate: triangular with minimum = 15%,maximum = 25%,and most likely = 20% Use 5,000 trails to generate the simulation model for NPV using Crystal Ball. -Using the Tornado Chart tool,determine the assumption that has the greatest impact on the NPV.