1) The linear programming ingredient or blending problem model allows one to include
not only the cost of the resource, but also the differences in composition.
2) The underlying distribution for a p-chart is binomial.
3) The mean and standard deviation of the Poisson distribution are equal.
4) When looking at the arrivals at the ticket counter of a movie theater, we can assume
an unlimited queue.
5) A new young executive is perplexed at the number of interruptions that occur due to
employee relations. She has decided to track the number of interruptions that occur
during each hour of her day. Over the last month, she has determined that between 0
and 3 interruptions occur during any given hour of her day. The data is shown below.
On average, she should expect 1.0 interruptions per hour.
6) The vector of state probabilities gives the probability of being in particular states at a
particular point in time.
7) A p-chart could be used to monitor the average weight of cereal boxes.
8) The concept of inventory is applicable to both manufacturing and service
organizations.
9) Given the assumptions in PERT, the probability that a project will be completed in
less time than required by the activities on the critical path is approximately 50%.
10) If two events are mutually exclusive, the probability of both events occurring is
simply the sum of the individual probabilities.
11) The adjusted r2 will always increase as additional variables are added to the model.
12) A seasonal index must be between -1 and +1.
13) Transportation companies would definitely be interested in the shortest-route
technique to optimize travel.
14) Assignment problems involve determining the most efficient assignment of people
to projects, salesmen to territories, contracts to bidders, and so on.
15) Creating the fundamental matrix requires a partition of the matrix of transition.
16) Mark M. Upp has just been fired as the university bookstore manager for setting
prices too low (only 20 percent above suggested retail). He is considering opening a
competing bookstore near the campus, and he has begun an analysis of the situation.
There are two possible sites under consideration. One is relatively small, while the other
is large. If he opens at Site 1 and demand is good, he will generate a profit of $50,000.
If demand is low, he will lose $10,000. If he opens at Site 2 and demand is high, he will
generate a profit of $80,000, but he will lose $30,000 if demand is low. He also has the
option of not opening at either site. He believes that there is a 50 percent chance that
demand will be high. A market research study will cost $5,000. The probability of a
good demand given a favorable study is 0.8. The probability of a good demand given an
unfavorable study is 0.1. There is a 60 percent chance that the study will be favorable.
(a) Should Mark use the study? Why?
(b) If the study is done and the results are favorable, what would Mark’s expected profit
be?
17) 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 40 minutes?
A) 0.50
B) 0.20
C) 0.80
D) 1.00
E) None of the above
18) After testing each unused cell by the stepping-stone method in the transportation
problem and finding only one cell with a negative improvement index,
A) once you make that improvement, you would definitely have an optimal solution.
B) you would make that improvement and then check all unused cells again.
C) you could stop because you already had the optimal solution.
D) you should check to be sure that you don’t have to add a dummy source or dummy
destination.
E) None of the above
19) Before a marketing research study was done, John Colorado believed there was a
50/50 chance that his music store would be a success. The research team determined
that there is a 0.9 probability that the marketing research will be favorable given a
successful music store. There is also a 0.8 probability that the marketing research will
be unfavorable given an unsuccessful music store.
(a) If the marketing research is favorable, what is the revised probability of a successful
music store?
(b) If the marketing research is unfavorable, what is the revised probability of a
successful music store?
20) Find the shortest route from Node 1 to Node 4.
A) 750
B) 500
C) 550
D) 600
E) 50
21) A point in the network, that is at the beginning or end of a route is called a(n)
A) arc.
B) branch.
C) line.
D) node.
E) source.
22) Table 12-2
According to the information provided in Table 12-2, which presents a queuing problem
solution, there are two servers in this system. Counting each person being served and
the people in line, on average, how many people would be in this system?
A) 5.455
B) 3.788
C) 9.243
D) 10.900
E) None of the above
23) For the basic EOQ model, which of the following relationships is not true?
A) The optimal number of orders per year equals annual demand divided by the EOQ.
B) The reorder point equals daily demand multiplied by the lead-time in days,
excluding safety stock.
C) Average inventory level equals one-half the order size.
D) The average dollar level of inventory equals unit price multiplied by order quantity.
E) At EOQ, annual ordering cost equals annual carrying cost.
24) The annual demand for a product has been projected at 2,000 units. This demand is
assumed to be constant throughout the year. The ordering cost is $20 per order, and the
holding cost is 20 percent of the purchase cost. Currently, the purchase cost is $40 per
unit. There are 250 working days per year. Whenever an order is placed, it is known that
the entire order will arrive on a truck in 6 days. Currently, the company is ordering 500
units each time an order is placed. What is the total holding cost for the year using this
policy?
A) $400
B) $2,000
C) $4,000
D) $8,000
E) None of the above
25) The weather is becoming important to you since you would like to go on a picnic
today. If it was sunny yesterday, there is a 65% chance it will be sunny today. If it was
raining yesterday, there is a 30% chance it will be sunny today. If the probability that it
was raining yesterday is 0.4, what is the probability that it will be sunny today?
A) 0.650
B) 0.390
C) 0.510
D) 0.490
E) None of the above
26) Table M8-5
Table M8-5 represents a solution that is
A) clearly optimal for a minimization objective.
B) degenerate.
C) infeasible.
D) All of the above
E) None of the above
27) Given an activity’s optimistic, most likely, and pessimistic time estimates of 4, 14,
and 18 days respectively, compute the PERT expected activity time for this activity.
A) 14
B) 12
C) 11
D) 13
E) None of the above
28) Which of the following is not an assumption for the M/M/1 model with finite
population source?
A) There is only one server.
B) The population of units seeking service are finite.
C) Arrivals follow a Poisson distribution and service times are exponential.
D) Customers are served on a first come, first served basis.
E) The length of the queue is independent of the arrival rate.