Mid-term Exam
OPER 643
Fall 2009
The exam will be due on Wednesday, November 4th at the beginning of class. You should
email me a Word document with your typed answers and Excel spreadsheets for each of
your models.
Do not discuss the exam with anyone except the instructor. I will give help on
understanding the question and on understanding previously covered material. I will not
answer any questions about how to do these problems.
1. (25 pts) Erica is going to fly to London on August 5th and return home on August
20th. It is now July 1st. On July 1st, she may buy a one-way ticket (for $350) or a
round-trip ticket (for $660). She may also wait until August 1st, a one-way ticket will
cost $370 and a round-trip ticket $730. It is possible that between July 1st and August
1st, her sister (who works for the airline) will be able to obtain a free one-way ticket
for Erica. The probability that her sister will obtain the free ticket is 0.3. If Erica has
bought a round trip ticket on July 1st and her sister has obtained the free ticket, she
may return “half” of her round-trip to the airline. In this case her total cost will be
$330 plus a penalty of $50. Use a decision tree to determine Erica’s lowest expected
