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1) A risk avoider is a person for whom the utility of an outcome
A) decreases as the monetary value increases.
B) stays the same as monetary value increases.
C) increases at an increasing rate as the monetary value increases.
D) increases at a decreasing rate as monetary value increases.
E) None of the above
2) Shadow prices
A) can be derived from the coefficients of the slack variables in the Cj - Zj row of an
optimal simplex tableau.
B) represent the value of one additional unit of a resource.
C) are found in the solution to the dual LP.
D) All of the above
E) None of the above
3) The consistency index is
A) the average value of the consistency vector.
B) CR/CI.
C) RI/CR.
D) (» - n ) / ( n - 1 ).
E) None of the above
4) Suppose a linear programming (minimization) problem has been solved and the
optimal value of the objective function is $300. Suppose an additional constraint is
added to this problem. Explain how this might affect each of the following:
(a) the feasible region,
(b) the optimal value of the objective function.
5) Nick has plans to open some pizza restaurants, but he is not sure how many to open.
He has prepared a payoff table to help analyze the situation.
Nick believes there is a 40 percent chance that the market will be good, a 30 percent
chance that it will be fair, and a 30 percent chance that it will be poor. A market
research firm will analyze market conditions and will provide a perfect forecast (they
provide a money back guarantee). What is the most that should be paid for this
forecast?
A) $ 44,000
B) $ 53,000
C) $123,000
D) $176,000
E) $132,000
6) Table 14-3
The following data consists of a matrix of transition probabilities (P) of three office
locations (A,B,C) within a large company and how employees shift from one location
to the other from year to year. The company CEO would like to understand the
movement of employees over time and the long-run proportion of employees in each
location. Assume that there is always a total of 3000 employees.
Using the data given in Table 14-3, how many employees do we expect in location B
two years from now?
A) 1000
B) 1400
C) 1420
D) 1500
E) 820
7) Rolf Steps is the production manager for a local manufacturing firm. This company
produces staplers and other items. The annual demand for a particular stapler is 1,600
units. The holding cost is $2 per unit per year. The cost of setting up the production line
is $25. There are 200 working days per year. The production rate for this product is 80
per day. If Rolf decided to produce 200 units each time he started production of the
stapler, what would his maximum inventory level be?
A) 200
B) 180
C) 100
D) 90
E) None of the above
8) A new shopping mall is considering setting up an information desk manned by one
employee. Based upon information obtained from similar information desks, it is
believed that people will arrive at the desk at the rate of 15 per hour. It takes an average
of two minutes to answer a question. It is assumed that arrivals are Poisson and answer
times are exponentially distributed.
(a) Find the probability that the employee is idle.
(b) Find the proportion of time that the employee is busy.
(c) Find the average number of people receiving and waiting to receive information.
(d) Find the average number of people waiting in line to get information.
(e) Find the average time a person seeking information spends at the desk.
(f) Find the expected time a person spends waiting in line to have his question
answered.
9) Sensitivity analysis of EOQ refers to
A) the attitude of top management toward the use of the EOQ model.
B) analysis of how much the EOQ will change if different input values are used.
C) an assessment of the impact of obsolescence upon the EOQ.
D) a study of the impact of storing incompatible products in the same warehouse.
E) analysis of the impact of stock shortages on customers or on production.
10) When applying linear programming to diet problems, the objective function is
usually designed to
A) maximize profits from blends of nutrients.
B) maximize ingredient blends.
C) minimize production losses.
D) maximize the number of products to be produced.
E) minimize the costs of nutrient blends.
11) Higher values of the CR indicate
A) the greater the level of consistency of the pairwise comparisons.
B) an indication of low consistency of the pairwise comparisons.
C) a moderate consistency of the pairwise comparisons.
D) None of the above
12) Most systems use a queue discipline known as
A) shortest processing time.
B) longest processing time.
C) FIFO.
D) earliest due date.
E) critical ratio.
13) Given a network with the following distances:
(a) Determine which nodes should be connected to get the minimum distance from
Nodes 1 through 6.
(b) Determine the minimum distance.
14) Demand is estimated to be 800 units. If Z is taken to be 1.5, when the estimated
average demand is 400 units, determine for these data.
A) 71,111
B) -71,111
C) 266
D) -266
E) None of the above
15) An n x m matrix, when multiplied by an m x n matrix, yields
A) an n x m matrix.
B) an m x n matrix.
C) an n x n matrix.
D) an n x m x n matrix.
E) None of the above
16) A goal programming problem had two goals (with no priorities assigned). Goal
number 1 was to achieve a cost of $3,600 and goal number 2 was to have no wasted
material. The optimal solution to this problem resulted in a cost of $3,900 and no
wasted material. What was the value for the objective function for this goal
programming problem?
A) 300
B) -300
C) 3300
D) 0
E) None of the above
17) Which of the following is not a valid queuing model based on the Kendall notation?
A) M/M/3
B) D/D/2
C) D/M/1
D) M/M/0
E) G/D/1
18) There are six cities (City 1-City 6) serviced by a particular bus line. Limited routes
are available, and the distance for each of these routes is presented in the table below.
For the bus line problem above, what are the stages that provide the minimum distance?
A) 1-2, 2-4, 4-6
B) 1-2, 2-5, 5-6
C) 1-3, 3-4, 4-6
D) 1-3, 3-5, 5-6
E) None of the above
19) Models that do not involve risk or chance are
A) probabilistic models.
B) postoptimality models.
C) deterministic models.
D) MIS models.
E) None of the above
20) Which of the following does not represent a factor a manager might typically
consider when employing linear programming for a production scheduling?
A) labor capacity
B) space limitations
C) product demand
D) risk assessment
E) inventory costs
