Lecture Managerial economics (8e): Chapter 16 - Samuelson, Marks

Chapter 16 - Auctions and competitive bidding. Chapter 16 considers an important application of decision making under uncertainty: competitive bidding. In an auction setting, a single seller seeks to obtain the highest price from competing buyers. | Chapter SIXteen Linear Programming Management is the art of doing the best one can within constraints and occasionally getting around them. ~Anonymous For Discussion An Investment Problem A Portfolio manager has $20 million to invest in a fund consisting of the following bonds: Linear Programs Finding an Optimal Computer Mix Graphing the LP Problem A Minimization Problem Regulation at Least Cost Algebraic Solutions Formulation Issues 4 Figure Production constraints for a PC Manufacturer Figure Production constraints with contribution contours Figure Clean-Water Funding Sensitivity analysis and shadow Prices Changes in the Objective Function Shadow Prices Optimal Decisions & Shadow Prices Business Behavior—Allocating HIV Resources 8 Figure Production constraints with New contributions Figure The Shadow Price of Hard Disks Formulation and computer solution for larger LP problems Production for Maximum Output Production at Minimum Cost 11 Figure .