The smallest total monthly cost , Basic Statistics

Each month, the firm Cashco has 50% chance that an amount of $ 1,000 will be credited In its current account, and a 50% chance that the account is debited $ 1,000. As current account does not pay interest, Cashco considers that for each $ 1,000 in balance current account at the end of the month, there is a cost of $ 15 (in lost interest). In the beginning of each month, Cashco can adjust the balance of the current account by making a deposit or withdrawal (for an arbitrary amount), with a cost of $ 20 per transaction. Cashco should never leave the balance becomes negative. The company is currently reviewing both following policies for the management of its liquidity:

P1: the beginning of a month when the balance is $ 3,000, immediately lower the balance to $ 1,000. At the beginning of a month when the balance is $ 0, immediately pay back $ 1000.

P2: the beginning of a month when the balance is $ 3,000, immediately lowering the balance to $ 2,000. At the beginning of a month when the balance is $ 0, immediately back the balance to $ 2,000.

Which of the two policies P1 and P2 have the smallest total monthly cost (opportunity more transactions), on average? NB The sequence of events takes place every month as shown below:

1. Observe the balance

2. Adjust the balance (if desired)

3. The balance changes randomly

4. The opportunity cost is charged.

Posted Date: 3/26/2013 8:07:34 AM | Location : United States







Related Discussions:- The smallest total monthly cost , Assignment Help, Ask Question on The smallest total monthly cost , Get Answer, Expert's Help, The smallest total monthly cost Discussions

Write discussion on The smallest total monthly cost
Your posts are moderated
Related Questions
discuss the steps in preparing product cost allocation.

theorems of probability ..

formula for calculating paasches quantity index

Bonded warehouse is a storage area under Customs authority that is imported dutiable goods on which duty is unpaid and these are stored. Once the duty & other charges are paid the

Interpretation or Analysis of Financial Statements. Financial report research (or financial analysis) the procedure of comprehension the possibility and earnings of an organizat

Explain how you would decide whether to use the additive model or the multiplicative model to analyse a time series.

A Biology student estimates that the probability that a certain organism will live beyond 24 hours is .40. If he conducts on 7 of this type or organisms, find the probability that

Use the concepts of sampling error and z scores to explain the concept of distribution of sample means.

Momentum and Energy Statement 1: If there is a definite force there is a definite displacement, which means that work is done definitely by the force. And Statement 2: The wor

solved example with data of bi variate frequency distribution