1. Limited time only! Sign up for a free 30min personal tutor trial with Chegg Tutors
    Dismiss Notice
Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

Homework Help: Find the max expected value

  1. Jan 18, 2013 #1
    1. The problem statement, all variables and given/known data
    f(x) = 1/2 - 1/4 |d-x| where x is the deliver date
    If the actually delivery date from target date falls within the interval of 6 < x <8, an incentive award of C results. However if x < 6, a penalty of C1 is imposed, while if x > 8, the penalty is C2. Find the value of d that maximizes the expected contract award.

    2. Relevant equations

    Please show me how to solve this problem. Thank you much.

    3. The attempt at a solution
  2. jcsd
  3. Jan 18, 2013 #2

    Ray Vickson

    User Avatar
    Science Advisor
    Homework Helper

    What is f(x)? Is it a probability density, a cost function, a profit function or something else? If f(x) IS a probability density, it looks wrong: it must integrate to 1 when you integrate over its nonzero portions, so at the very least you need to supply bounds on x.

    Anyway, the Forum rules require you to do some work on the problem yourself: we are not allowed to show you how to do it. I will say, however, that the first step---after fixing up f(x)--- must be to figure out what is the expected value of the contract award as a function of d.
Share this great discussion with others via Reddit, Google+, Twitter, or Facebook