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Posted on July 8, 2013 @ 09:51:00 AM by Paul Meagher
In my last blog on the topic of revenue modelling (using a lobster fishing season as an example), I talked about categorical price distributions and how they would be a better representation of how lobster prices vary than using a normal distribution to model prices.
I thought I would finish of the exercise in modelling lobster fishing revenue by presented the completed lobster fishing revenue model. There are two main differences between this version of the script and my last lobster fishing revenue script.
- This version represents the variation in prices using a categorical probability distribution rather than a normal distribution. I discussed how a categorical probability distribution works and why it is appropriate in my last blog.
- I simplified the looping structure for each catch. I didn't realize that e0=1. I thought the natural exponent e raised to the power of 0 was 0 so did some unnecessary coding for the first season's catch. It is good to know that e0=1 (see Exponential Functions at Wikipedia) as it help to understand how the exponential decay function works when $c = 0 (i.e., first catch of the season).
So without further ado here is the completed lobster fishing revenue model implemented as a PHP program:
Using a categorical distribution to model prices instead of a normal distribution does not appear to make a big difference in total seasonal revenue numbers produced by the model (around 80k) so we probably could have gotten away with using a normal distribution to model prices; but prices were not in fact distributed in this manner and I preferred the model to be truer to the pricing facts.
In my next blog I will take this revenue model and re-run it many times in order to better understand the behavior of the model and come up with some estimates of total expected revenue and total expected catch for a lobster fishing season.
Addendum
A week ago I had the pleasure of having a feed of lobster at a family event that my father-in-law held. He has a fishing boat. His two sons use it to fish lobsters, crabs, and tuna. They held aside some lobster for the event. Below is the cooked "feed of lobster" we had for the event.
I am not that proficient in shelling a lobster so asked for some tutoring. My sister-in-law Amanda demonstrated what is possibly the fastest and most efficient method possible for extracting meat from the tail of the lobster. The culinary schools do not even appear to teach this method. Amanda must have perfected this technique from having to shell so many lobsters for the menu at her new Backroads Bistro business. This is a 5 second video so you may have to rewatch to get how to do it.
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