The government is considering on whether or not to test visitors from outside the US for the Zika virus. To put this on a financial basis, lets assume that each visitor which enters the country with the disease costs the economy 20,000 in increased medical expenses. A visitor who enters without the disease contributes 5,000 to the national economy. Assume that 5% of all visitors have the disease.
a. If faced only with admitting or not admitting the visitors, what should the government do if it has no other information?
b. We can test the visitors (cost $100, mostly delay costs because it is slow) for the disease. If the test is 100% reliable what policy should the government adopt? c. Suppose that by using infrared temperature screening at the airport, 10% of the visitors with the disease test negative (not yet developed a detectably high temperature), and 20% of the visitors without the disease test positive (South American's are hot blooded). What is the value of this test? What policy should the government adopt? d. Finally suppose that those with normal temperatures are admitted and the visitors with high temperatures are given the more expensive test. Is this a useful strategy? e. We all fear of disease, especially exotic disease. How does the public's general risk aversion fit into the decisionmaking?
2 (35 points) A Tongan community with a population of 20,000 operates a small blood bank. On a typical day they will get 5 units of whole blood donated (don't worry about blood type, all Tongans are 0-). These donations occur randomly with a Poisson distribution being a reasonable first candidate to capture the randomness. On a typical day, 3 units of blood are required. Again, these are randomly distributed with a Poisson distribution providing a reasonable first candidate for capturing the randomness.
a.
b.
A Peace Corps volunteer suggests that they set up the problem as a simple M/M/1/../co queueing model. Lay out an implementation of the method for this problem. Compute P[0] and Lq for this situation. What does these measures mean in the context of the problem? c. Do your results suggest any problems with this implementation (assumptions that don't really fit)? Hint, it should.