1) The two fundamental decisions that you have to make when controlling inventory
are: (1) how much to order, and (2) how much money to spend.
2) The optimistic time is the greatest amount of time that could be required to complete
an activity.
3) Decision situations where we have difficulty in accurately determining various
weighting factors are excellent candidates for the Analytic Hierarchy Process analysis.
4) A utility curve that shows utility increasing at an increasing rate as the monetary
value increases represents the utility curve of a risk seeker.
5) The maximal-flow model assumes that there is a net flow from ‘source” to ‘sink.”
6) It is impossible to develop a process that has zero variability.
7) The regression model assumes the errors are normally distributed.
8) An exponential forecasting method is a TIME SERIES forecasting method.
9) When using the EOL as a decision criterion, the best decision is the alternative with
the largest EOL value.
10) An adjoint is the transpose of the matrix of cofactors.
11) The condition of an independent variable being correlated to one or more other
independent variables is referred to as
A) multicollinearity.
B) statistical significance.
C) linearity.
D) nonlinearity.
E) The significance level for the F-test is not valid.
12) The time required to complete a project is normally distributed with a mean of 80
weeks and a standard deviation of 10 weeks. The construction company must pay a
penalty if the project is not finished by the due date in the contract. If a construction
company bidding on this contract puts in a due date of 80 weeks, what is the probability
that they will have to pay a penalty?
A) 0
B) 1.000
C) 0.500
D) 1/8
E) None of the above
13) A concessionaire for the local ballpark has developed a table of conditional values
for the various alternatives (stocking decision) and states of nature (size of crowd).
If the probabilities associated with the states of nature are 0.30 for a large crowd, 0.50
for an average crowd, and 0.20 for a small crowd, determine:
(a) the alternative that provides the greatest expected monetary value (EMV)
(b) the expected value of perfect information (EVPI)
14) The time required to travel downtown at 10 a.m. on Monday morning is known to
be normally distributed with a mean of 40 minutes and a standard deviation of 5
minutes. What is the probability that it will take less than 35 minutes?
A) 0.84134
B) 0.15866
C) 0.53983
D) 0.46017
E) None of the above
15) Which of the following methods tells whether the forecast tends to be too high or
too low?
A) MAD
B) MSE
C) MAPE
D) decomposition
E) bias
16) Sensitivity analyses are used to examine the effects of changes in
A) contribution rates for each variable.
B) technological coefficients.
C) available resources.
D) All of the above
E) None of the above
17) A quality control program is being developed for batteries. The percent defective for
these in the past has been 3%. If a sample size of 120 is taken, what would the 99.7%
upper control chart limit be?
A) 0.0812
B) 0.0767
C) 0.0611
D) 0.0307
E) 0.0471
18) The expected value of a probability distribution is
A) the measure of the spread of the distribution.
B) the variance of the distribution.
C) the average value of the distribution.
D) the probability density function.
E) the range of continuous values from point A to point B, inclusive.
19) As the service level increases,
A) safety stock increases at a decreasing rate.
B) safety stock increases at an increasing rate.
C) safety stock decreases at an increasing rate.
D) safety stock decreases at a decreasing rate.
E) None of the above
20) In a matrix of transition probabilities (where i equals the row number and j equals
the column number),
A) each number represents the conditional probability of being in state j in the next
period given that it is currently in the state of i.
B) each number represents the probability that if something is in state i, it will go to
state j in the next period.
C) the number in row 3, column 3 represents the probability that something will remain
in state 3 from one period to the next.
D) the probabilities are usually determined empirically.
E) All of the above
21) Figure 11-1
Given the network shown in Figure 11-1 and the following information, what is the
variance of the critical path?
A) 16
B) 7
C) 9
D) 8
E) None of the above
22) What is meant by the value of a mixed strategy game?
23) The substitution rates in the slack variable column can be used to determine the
actual values of the solution mix variables if the right-hand side of a constraint is
changed. What is the relationship that is used to find those values?
24) An electronics company is looking to develop a regression model to predict the
number of units sold for a special running watch. Data is provided below:
Use model building to determine the best prediction equation for Sales, based on
highest adjusted r2.
25) The IRU Company manufactures traditional wooden pencils. They have determined
their variable cost/unit to be $0.012/pencil. Fixed costs, however, are quite high because
of old processing equipment and costly packaging. The fixed costs are estimated at
$140,000/month. IRU sells their pencils at a price of $13.248/gross. (There are 144
pencils in a gross.) How many grosses of pencils must be sold annually to break even?
26) In general terms, describe the difference between a general linear regression model
and a trend projection.
27) For df1 = 3 and df2 = 7, what is the probability that F is greater than 5?
28) In the shortest-route problem, circles represent ________, and arrows represent
________.
29) What is the steady state of a queuing system?
30) With a nonlinear relationship, a ________ is necessary to turn a nonlinear model
into a linear model.