Article Abstract:
Modifications to enhance PERT-type subjective estimations utilized in stochastic decision models are considered with respect to considered distributions, derived fractiles and formulas. The systematic search approach utilized three fractiles. Formulas were determined to estimate the mean and standard deviation according to a group of distributions. Random points were also produced for distribution systems while considering standardized variables with mu = delta = 1. The formulas considered the mean average absolute, average square and maximum errors from a number of versions of the equation, mu(sub e) = C(sub 0)x(sub 0.5) + c(sub 1)S(sub alpha-1)+...c(sub n)S(sub alpha-n). Results showed that the search generated formulas that were more precise and robust than other formulas.
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Article Abstract:
Recent analysis is presented which examines how financial decision models have been designed to estimate skewness in stock returns and many financial variables, but ignore the sampling error in skewness estimations. The analysis reveals that there are significant consequences to ignoring skewness sampling error. Additionally, a simple approach is developed which roughly constructs a confidence interval for skewness estimated from lognormal populations.
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Article Abstract:
A solution for the multiple-product multiple-constraint newsboy problem is discussed. In the newsboy problem, the newsboy buys an initial inventory of a single-period product at the start of the workday. The demand for the product is a random variable. The newsboy has surplus if initial inventory is greater than demand, and a shortage when initial inventory is less than demand. The problem involves deriving the optimal initial inventory to buy.
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