IE 343 Important Equations

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Purdue University
Industrial Engineering
IE 34300
Agostino Capponi

Relationship between price D= a−p Take first derivative to find and quantity: b max revenue (D=a/2b), set second derivative to 0 to assure it is a max-2b<0 Profit(D) =Total revenue-total cost For profit not to be always negative, re quire that a-cv is ¿−bD + a(C D v) 2 F positive; negative profit is called a loss Find optimal level of demand D=(a-cv)/2b Simple Interest Rates P(1+Ni) Compound Interest Rate P(1+r/m)^N m=times per year interest is compounded, N is the number of periods Effective interest rate i=amount repaid at the end of the year/P Future given annuity A(F/A, i,N) Long form F=A[(1+i)^N-1]/I; called uniform series compound amount factor Annuity given future A=F(A/F,i,N) A=F*i/((1+i)^N-1) Principal given annuity P=A(P/A,i,N) P=A[(1+i)^N-1]/(i(i+1)^N) Deferred Annuity: principal A (1+i)N−J−1 P=A[(P/A,i,N-J)*(P/F,i,J)] given annuity P= i[ N ] 1+i ) Deferred Annuity: Future A N−J F= [1+i) −1 ] given principal i Present equivalent value P P PW=W
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