Comment on the following statement: "Inventory planning models are useless because the model assumptions do not...

Comment on the following statement: "Inventory planning models are useless because the model assumptions do not always fit real world situations."

Expert Solution

Once a solution has been obtained two things need to be done before one even considers developing a final policy or course of action for implementation. The first is to verify that the solution itself makes sense. Oftentimes, this is not the case and the most common reason is that the model used was not accurate or did not capture some major issue. The process of ensuring that the model is an accurate representation of the system is called validation and this is something that (whenever possible) should be done before actual solution. However, it is sometimes necessary to solve the model to discover inaccuracies in it. A typical error that might be discovered at this stage is that some important constraint was ignored in the model formulation - this will lead to a solution that is clearly recognized as being infeasible and the analyst must then go back and modify the model and re-solve it. This cycle continues until one is sure that the results are sensible and come from a valid system representation.

genius_generous answered 2 years ago

4. What are the assumptions of the 2 following models: CAPM: Dividend discount model:

Question 3: Comment on the following statements: “The balance sheet is pretty useless for decision making....

Question 3: Comment on the following statements: “The balance sheet is pretty useless for decision making. It only shows the position at a single point in time and a past point in time, at that.” A company’s income statement shows an annual sales revenue of about AED 60 million and interest payable of AED 6.5 million. The auditors discovered that an employee had fraudulently paid himself AED 2,000 and charged this to ‘interest payable’ in the income statement. Would the...

Using the constant-growth dividend discount model, comment on the following statement:

Using the constant-growth dividend discount model, comment on the following statement: “If the shareholders’ expected rate of return were always twice the growth rate on future dividends, then the value of the dividend next period will always equal the current stock price times the growth rate on future dividends.” Group of answer choices True and the dividend next period would have a direct relationship to both the current stock price and the growth rate on future dividends percent. False...

What is the EOQ model? What assumptions are necessary to apply it? How do these assumptions...

What is the EOQ model? What assumptions are necessary to apply it? How do these assumptions change the nature of the cycle inventory pattern graphically?

Why do we model a competitive firm with assumptions that seem to be unrealistic? Why do...

Why do we model a competitive firm with assumptions that seem to be unrealistic? Why do we see that marginal cost tends to increase with each unit of output? Why do we observe a U-shaped Average Cost Curve? Why is it the Marginal Revenue equal to the Price? What does it mean that the Marginal Revenue curve is a flat horizontal curve? Why do we assume that companies are profit-maximizing institutions? After all, they may care about something else besides...

7. What are the model assumptions of the following process and the corresponding model param- eters?...

7. What are the model assumptions of the following process and the corresponding model param- eters? Is the following model stationary? Is it invertible? Justify your answers. Xt + 1.5Xt−1 = Wt − 0.5Wt−1 + 0.07Wt−2 where Wt is a sequence of i.i.d. normal random variables with mean zero and variance 1.

How are each of these models applied to community health planning? Community organization Model Community Health...

How are each of these models applied to community health planning? Community organization Model Community Health Action Model Community Health Assessment Model Community Needs Assessment Model.

What are the characteristics or assumptions of the monopoly model? For each of the following markets...

What are the characteristics or assumptions of the monopoly model? For each of the following markets explain the sources of monopoly power/barriers to entry: electric company, diamonds, new life-saving drug. In what part of the demand curve will a monopolist operate? Why?

Comment on the following statement in detail: Dividends received by a corporation on an investment in...

Comment on the following statement in detail: Dividends received by a corporation on an investment in the common and preferred stock of another corporation, where ownership in the dividend paying corporation is less than 20%, is subject to 70 percent exclusion for tax purposes.

Mautz (1973) made the following comment: “Accounting is what it is today not so much because...

Mautz (1973) made the following comment: “Accounting is what it is today not so much because of the desire of accountants but because of the influence of businessmen. If those who make management an investment decisions had not found financial reports based on historical cost useful over the years, changes in accounting would long since have been made” Critically evaluate this statement. In your discussion, you should consider the relative merits of historical cost accounting as well as the various...

Question