Z. Zhang
MGTA 453: Assignment #1
[1]
Suppose that Logan airport implements a new policy that affects the probability the
airport will be open when a storm hits. Use the input file for Radiant for the KCL case.
a. What is the optimal initial decision if the probability that Logan airport stays open if a
storm hits drops to 60%?
b. What is the optimal EMV if the probability that Logan airport stays open if a storm hits
drops to 60% (in dollars)?
c. What is the optimal initial decision if the probability that Logan airport stays open if a
storm hits drops to 50%?
d. What is the optimal EMV if the probability that Logan airport stays open if a storm hits
drops to 50% (in dollars)?
[2]
Historical purchase data has been provided to you concerning the Dynamic Pricing of
Tee Times problem we worked through in class. The data prices.rds can be found in this
directory. Load this into R or Radiant.
For this data set, what are the optimal prices for Monday and Tuesday. And, what is
the maximum you would be willing to pay Mike for this ticket? Write code in R to solve
this problem.
Along with this code, please include the following plots:
a. The purchase probability for each price, for both Monday and Tuesday. Start by plotting
them separately for your own practice, but for the assignment, submit these two days on
the same plot, with a different fill color to differentiate them. A bar plot is preferred, but
not required.
b. A plot of the Tuesday EMV, depending on the Tuesday price charged.
c. A plot of the Monday EMV, depending on the Monday price charged (clarify what you
assume for Tuesday in this plot). Plot style is up to you, but should be clear.
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Z. Zhang
Your plots should be reasonably sized (not too large or small), with labeled axes and
titles. Use Radiant or R, and submit a reproducible report, with LOCAL directory links—
not absolute file links.
[3]
Book Exercise 1.2. Double-check your work by using Radiant’s “Decision analysis” mod-
ule to construct the same tree. Include an image of your decision tree from Radiant.
[4]
Book Exercises 2.4, 2.8
Extra Practice
If you seek additional practice, these are the questions I will also provide solutions for online.
Please do not turn in solutions for these questions with your assignment.
Book Exercises 1.6 and 2.2
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