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1) There is no relationship between variables unless the data points lie in a straight line.
2) The expected completion time and variance of an activity is approximated by the
normal distribution in a PERT analysis.
3) A basic feasible solution is a solution to a linear programming problem that
corresponds to a corner point of the feasible region.
4) Another name for the transportation problem is the logistics problem.
5) An equilibrium condition exists if the state probabilities for a future period are the
same as the state probabilities for a previous period.
6) Production scheduling is amenable to solution by LP because it is a problem that
must be solved on a regular basis.
7) When a problem is difficult to quantify, it may be necessary to develop unspecific
objectives.
8) Multicollinearity exists when a variable is correlated to other variables.
9) The number of dummy variables must equal 1 less than the number of categories of
the qualitative variable.
10) The unit normal loss integral can be used to compute EOL.
11) The lower value of the game is selected as the maximum of the minimum numbers
in a row.
12) An n x m matrix multiplied by a p x m matrix yields an n x p matrix.
13) The objective of an assignment problem solution most often is to minimize the total
costs or time of performing the assigned tasks.
14) Daniel Trumpe has computed the EOQ for a product he sells to be 400 units.
However, due to recent events he has a cash flow problem. Therefore, he orders only
100 units each time he places an order. Which of the following is true for this situation?
A) Annual ordering cost will be lower than annual holding cost.
B) Annual ordering cost will be higher than annual holding cost.
C) Annual ordering cost will equal annual holding cost.
D) Annual ordering cost will be unaffected by the order policy change.
E) Nothing can be determined without more information.
15) Table 11-1
The following represents a project with known activity times. All times are in weeks.
Using the data in Table 11-1, what is the latest possible time that C may be started
without delaying completion of the project?
A) 0
B) 4
C) 8
D) 10
E) None of the above
16) A pessimistic decision making criterion is
A) maximax.
B) equally likely.
C) maximin.
D) decision making under certainty.
E) minimax regret.
17) The annual demand for a product is 1,000 units. The company orders 200 units each
time an order is placed. The lead-time is 6 days, and the company has determined that
20 units should be held as a safety stock. There are 250 working days per year. What is
the reorder point?
A) 20
B) 24
C) 44
D) 120
E) None of the above
18) Table 15-2
Given the sample results (100 units in each sample):
Based on Table 15-2, find the 95.5% lower limit of the appropriate p-chart.
A) 0.0076
B) 0.0964
C) 0.2014
D) 0.1397
E) None of the above
19) Which of the following is the fourth step of the "Six Steps in Decision Making"?
A) Select one of the mathematical decision theory models.
B) List the possible alternatives.
C) Apply the model and make your decision.
D) List the payoff or profit of each combination of alternatives and outcomes.
E) Identify the possible outcomes or states of nature.
20) An n x m matrix, when added to an n x m matrix, yields
A) an n x m matrix.
B) an m x n matrix.
C) a 2(n x m) matrix.
D) a 2n x 2m matrix.
E) None of the above
21) Terms that are minimized in goal programming are called
A) deviational variables.
B) global variables.
C) decision variables.
D) minimization variables.
E) None of the above
22) In Markov analysis, we also assume that the sates are
A) collectively exhaustive.
B) mutually exclusive.
C) independent.
D) A and B
E) A, B, and C
23) Which of the following is considered a decision variable in the media selection
problem of minimizing interview costs in surveying?
A) the number of people to survey in each market segment
B) the overall survey budget
C) the total number surveyed
D) the number of people to conduct interviews
E) None of the above
24) A utility curve showing utility increasing at an increasing rate as the monetary value
increases represents
A) a risk avoider.
B) utility assessment.
C) a risk seeker.
D) conditional values.
E) expected utilities.
25) In a PERT network, the latest (activity) start time is the
A) earliest time that an activity can be finished without delaying the entire project.
B) latest time that an activity can be started without delaying the entire project.
C) earliest time that an activity can start without violation of precedence requirements.
D) latest time that an activity can be finished without delaying the entire project.
E) None of the above
26) In a good regression model the residual plot shows
A) a cone pattern.
B) an arched pattern.
C) a random pattern.
D) an increasing pattern.
E) a decreasing pattern.
27) Which of the following is considered a decision variable in the media selection
problem of maximizing audience exposure?
A) the amount spent on each ad type
B) what types of ads to offer
C) the number of ads of each type
D) the overall advertising budget
E) None of the above
28) Subjective probability assessments depend on
A) the total number of trials.
B) the relative frequency of occurrence.
C) the number of occurrences of the event.
D) experience and judgment.
E) None of the above
29) Suppose that 10 golfers enter a tournament and that their respective skill levels are
approximately the same. Six of the entrants are female and two of those are older than
40 years old. Three of the men are older than 40 years old. What is the probability that
the winner will be a female who is older than 40 years old?
A) 0.000
B) 1.100
C) 0.198
D) 0.200
E) 0.900
30) Swearingen and McDonald, a small furniture manufacturer, produces fine
hardwood tables and chairs. Each product must go through three stages of the
manufacturing process: assembly, finishing, and inspection. Each table requires 12
hours of assembly, 20 hours of finishing, and 2 hours of inspection. Each chair requires
4 hours of assembly, 16 hours of finishing, and 3 hours of inspection. The profit per
table is $150 while the profit per chair is $100. Currently, each week there are 300
hours of assembly time available, 220 hours of finishing time, and 30 hours of
inspection time. To keep a balance, the number of chairs produced should be at least
twice the number of tables. Also, the number of chairs cannot exceed 6 times the
number of tables. Formulate this as a linear programming problem. Carefully define all
decision variables. Find the solution.
31) Column 1:
Column 2: Control limits for an
32) Describe a matrix.
33) A company annually uses 1,200 of a certain spare part that costs $25 for each order
and has a $24 annual holding cost. Calculate the total annual cost for order sizes of: 25,
40, 50, 60, and 100. Identify the economic order quantity, and consider the implications
for making an error in calculating the economic order quantity.
34) Explain, briefly, why, in the exponential smoothing forecasting method, the larger
the value of the smoothing constant, , the better the forecast will be in allowing the user
to see rapid changes in the variable of interest.
35) List the four assumptions of the regression model.
36) Break-even analysis answers what common management question?
37) Column 1: Control chart
Column 2: Graphical presentation of process data
38) If two events (A,B) are dependent, what is the conditional probability of P(A|B)?
39) Briefly describe EVSI.
