In the cost model in Section 18.9.1, it is generally difficult to estimate the cost parameter C2 (cost of waiting). As a result, it may be helpful to compute the cost C2 implied by the aspiration levels. Using the aspiration level model to determine c*, we can then estimate the implied C2 by using the following inequality:

Ls1c*2 - Ls1c* + 12 …

C1 C2

… Ls1c* - 12 - Ls1c*2

((See Problem 18-125, for the derivation.) Apply the procedure to the problem in Example 18.9-2, assuming c* = 3 and C1 = $15.00.