13.1 Introduction

We’re always trying to predict the future. Will it rain on our upcoming picnic? Will the stock market or individual securities go up or down, and when and by how much? How will people vote in the next election? What’s the chance that a new oil exploration venture will strike oil and if so how much would it likely produce? Will a baseball team win more games if it changes its batting philosophy to “swing for the fences?” How much customer traffic does an airline anticipate over the next many months? And hence how should the company buy oil commodity futures to guarantee that it will have the supply it needs and hopefully at a minimal cost? What track is a hurricane likely to take and how powerful will it likely become (category ...

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