1) ERP systems are expensive to buy and costly to customize.
2) Sensitivity testing of basic variables involves reworking the initial simplex tableau.
3) The activity crash cost is equal to the incremental cost of shortening the project.
4) The transportation problem is a good example of a pure integer programming
problem.
5) A surplus variable is added to an = constraint in order to utilize the simplex
algorithm.
6) In a transportation problem, a single source may supply something to all destinations.
7) The three categories of forecasting models are time series, quantitative, and
qualitative.
8) A c-chart would be appropriate to monitor the number of weld defects on the steel
plates of a ship’s hull.
9) Before drawing a PERT or CPM network, we must identify all activities and their
predecessors.
10) The value of the determinant of the following matrix is 7.
11) The standard deviation equals the square of the variance.
12) A manager is deciding whether or not to build a small facility. Demand is uncertain
and can be either at a high or low level. If the manager chooses a small facility and
demand is low, the payoff is $100. If the manager chooses a small facility and demand
is high, the payoff is $300. On the other hand, if the manager chooses a large facility
and demand is low, the payoff is -$200, but if demand is high, the payoff is $800.
(a) What would be the best decision based on the Laplace criterion?
(b) What would be the best decision based on Hurwicz’s criterion of realism using α=
0.6?
13) Suppose that when the temperature is between 35 and 50 degrees, it has historically
rained 40% of the time. Also, historically, the month of April has had a temperature
between 35 and 50 degrees on 25 days. You have scheduled a golf tournament for April
12. What is the probability that players will experience rain and a temperature between
35 and 50 degrees?
A) 0.333
B) 0.400
C) 0.833
D) 1.000
E) 0.480
14) Which of the following is not considered to be one of the components of a time
series?
A) trend
B) seasonality
C) variance
D) cycles
E) random variations
15) Consider the following linear programming problem:
How many slack, surplus, and artificial variables would be necessary if the simplex
were used to solve this problem?
A) 3 slack, 3 surplus, and 3 artificial
B) 1 slack, 2 surplus, and 2 artificial
C) 1 slack, 4 surplus, and 4 artificial
D) 1 slack, 1 surplus, and 1 artificial
E) None of the above
16) A controllable variable is also called a
A) parameter.
B) decision variable.
C) mathematical model.
D) measurable quantity.
E) None of the above
17) Which of the following is not a benefit of a well-developed ERP system?
A) It is relatively inexpensive to customize.
B) It can integrate all of the operations of a firm.
C) It can reduce transaction costs.
D) It can increase speed of information.
E) It can increase accuracy of information.
18) Table 13-5
According to Table 13-5, which presents a summary of the Monte Carlo output from a
simulation of 200 runs, there are 5 possible values for the variable of concern. If this
variable represents the number of machine breakdowns during a day, what is the
probability that the number of breakdowns is more than 4?
A) 0
B) 0.08
C) 0.09
D) 1.00
E) None of the above
19) Find the shortest route from Node 6 to Node 1.
A) branches 9, 7, and 2
B) branches 8, 6, and 2
C) branches 8, 6, 7, and 1
D) branches 9, 5, and 1
E) None of the above
20) Which of the following is not an assumption of LP?
A) simultaneity
B) certainty
C) proportionality
D) divisibility
E) additivity
21) Table 10-3
A company has decided to use 01 integer programming to help make some investment
decisions. There are three possible investment alternatives from which to choose, but if
it is decided that a particular alternative is to be selected, the entire cost of that
alternative will be incurred (i.e., it is impossible to build one-half of a factory). The
integer programming model is as follows:
Solution x1 = 1, x2 = 0, x3 = 1, objective value = 14,000.
Table 10-3 presents an integer programming problem. What is the meaning of
Constraint 1?
A) If X1 is selected, X2 must also be selected.
B) No more than two alternatives may be selected.
C) At least two alternatives must be selected.
D) If X2 is selected, X1 must also be selected.
E) None of the above
22) A healthcare executive is using regression to predict total revenues. She has decided
to include both patient length of stay and insurance type in her model. Insurance type
can be grouped into the following categories: Medicare, Medicaid, Managed Care,
Self-Pay, and Charity. Which of the following is true?
A) Insurance type will be represented in the regression model by five binary variables.
B) Insurance type will be represented in the regression model by six dummy variables.
C) Insurance type will be represented in the regression model by five dummy variables.
D) Insurance type will be represented in the regression model by four binary variables.
E) Neither binary nor dummy variables are necessary for the regression model.
23) Table M2-3
For the shortest route problem described in Table M2-3, what is the distance for the
shortest route?
A) 155 miles
B) 66 miles
C) 59 miles
D) 114 miles
E) None of the above