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PROBLEM 10.7DQ

Expert-verified
Found in: Page 253

Operations And Supply Chain Management

Book edition 14th
Author(s) F. Robert Jacobs
Pages 800 pages
ISBN 9780078024023

Question: Which assumptions are necessary to employ the formulas given for Model 1?

Model 1 is valuable for a specific circumstance where a single line of clients arrives agreeing to Poisson dissemination.

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Necessary assumption to employ

Model assumptions denote the large collection of obviously stated (or implicit premised) conventions, choices, and other specifications on which any risk model is based. The rightness of those expectations is a major factor behind the model risk linked with a given model.