Essay
(A) Assuming we are risk neutral, use simulation to find the optimal capacity level.
(B) Using the answer to (A), there a 5% chance that the actual discounted profit will exceed what value?
(C) Using the answer to (A), there is a 5% chance that the actual discounted profit will be less than what value?
(D) If we are risk averse, how might the optimal capacity level change?
Correct Answer:
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(A) 
It appears that a capacity level of...View Answer
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Correct Answer:
Verified
It appears that a capacity level of...View Answer
Unlock this answer now
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