Stone Age Surfboards is a small manufacturer of two types of popular low-tide
surfboards, the Graystone and the Lava models. The manufacturing process consists of
two departments: fabrication and finishing. The fabrication department has 8 skilled
workers, each of whom works 9.25 hours per day. The finishing department has 5
workers, each of whom works a 6 -hour shift per day. Each pair of Graystone
surfboards requires 2.5 labor hours in the fabrication department and 2 labor hours in
finishing. The Lava model requires 4.2 labor-hours in fabrication and 3.6 labor-hours in
finishing. The company operates 6 days a week. It makes a per unit profit of $40 on the
Graystone model and $60 on the Lava model. The company anticipates selling at least
twice as many Lava models as Graystone models.
If the unit profit on Graystone surfboards is increased by $10, what is the Allowable
Decrease for Lava surfboards?
A) 30.00
B) 85.00
C) 16.67
D) 58.75
Below is a spreadsheet for a hotel overbooking model.
Answer the following question(s) using multiple parameterized simulations. The range
of historical customer demand is 400-430. Assume a uniform integer distribution for
customer demand, and run parameterized simulations for different reservation limits.
Use 5,000 trials and 1 for random seed.
What is the number of reservations that will generate the least revenue?
A) 400
B) 410
C) 420
D) 430
Which of the following typically describes the support for the association rule?
A) the number of transactions that include all items that are in the antecedent parts of
the rule
B) the number of transactions that include all items in the antecedent and consequent
parts of the rule
C) the number of transactions that include half from the antecedent and half from the
consequent
D) the number of transactions that include all items that are in the consequent parts of
the rule
The ________ indicates how much the value of the objective function will change as
the right-hand side of a constraint is increased by 1.
A) objective coefficient
B) shadow price
C) binding constraint
D) reduced cost
Below is a payoff table that lists four mortgage options:
Which of the following decisions has the best average payoff?
A) 1-year ARM
B) 3-year ARM
C) 5-year ARM
D) 30-year fixed
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential
new drug. The total R&D costs are estimated to reach around $875,000,000 with
clinical trials mounting to $145,000,000. The current market size is estimated to be
around 3,000,000 and is expected to grow at 4 percent every year. The market share
Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25
percent each year for the next 4 years. A monthly prescription is anticipated to generate
revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is
assumed.
Which of the following years shows the first profit for Dresden’s new drug?
A) first year
B) second year
C) third year
D) fourth year
Cerebro Manufacturing produces four types of structural support fittings-plugs, rails,
rivets, and clips-which are machined on two CNC machining centers. The machining
centers have a capacity of 250,000 minutes per year. The gross margin per unit and
machining requirements are shown in the spreadsheet below.
When a model has a unique optimal solution, it means that ________.
A) the objective is maximized or minimized by more than one combination of decision
variables
B) there is no solution that simultaneously satisfies all the constraints
C) the Allowable Increase or Allowable Decrease values for changing cells are zero
D) there is exactly one solution that will result in the maximum or minimum objective
Identify the formula used to calculate the root mean square error over a range of
forecasted values, if the actual value of the time series at time t and the forecast value
for time t are denoted by At and Ft respectively.
A) RMSE =
B) RMSE =
C) RMSE =
D) RMSE =
Which of the following is the inherent reason why sampling errors occur?
A) because samples represent the whole population
B) because samples are only a subset of the population
C) because samples never provide enough data to estimate standard deviation
D) because the means cannot be accurately estimated using samples
Which of the following is an example of a subset?
A) The number of individuals who have a Ford car
B) The number of IT employees out of all employees working in an office of Google
C) The number of members in the Democratic Party
D) The population of Canada
Which of the following is true of the lift value in association rule?
A) Its strength is directly proportional to the strength of the association rule.
B) It cannot have a value that is more than 1 to be considered a good minimum.
C) It provides information on the increase of the antecedent given the consequent.
D) It does not require the expected confidence to be calculated.
The Atlas Movies Theater is planning to reprice their ticket rates to maximize revenues.
They have three classes of tickets: Classic, Silver, and Gold. The table below provides
information on the average ticket sales, revenue and price elasticity on demand. They
have a total seating capacity of 300. The table also provides the price range within
which they plan to reduce their ticket rates.
According to the nonlinear model, which of the following is the projected revenue
figure for Silver tickets based on its new price?
A) $1,163.02
B) $1,132.08
C) $1,224.63
D) $1,316.92
Below are four options for an investment decision.
Identify the average utility for the growth fund decision.
A) 1.05
B) 0.70
C) 0.20
D) 0.60
Which of the following describes periodic sampling?
A) It is a sampling method based solely on expert opinion.
B) It is a sampling method based on selecting a time and then sampling the products
after that time.
C) It is a sampling method based on selecting every nth item from a population.
D) It is a sampling method exclusively used for population that is divided into subsets.
Below is a spreadsheet for Trance Electronics.
Suppose that the project manager of Trance Electronics has identified the following
uncertain variables in the model and the distributions and parameters that describe
them, as follows: Market size: normal with mean of 20,000,000 units and standard
deviation of 4,000,000 units. R&D costs: uniform between $600,000,000 and
$800,000,000.
Clinical trial costs: lognormal with mean of $150,000,000 and standard deviation
$30,000,000. Annual market growth factor: triangular with minimum = 2%,
maximum = 6%, and most likely = 3%.
Annual market share growth rate: triangular with minimum = 15%, maximum =
25%, and most likely = 20%.
The number of trials per simulation is equal to 10,000 at a Sim. Random Seed of 2. Run
the simulation and answer the following questions using the Risk Solver Platform.
What is the risk that the net present value over the 5 years will not be positive?
A) approximately 40%
B) approximately 57%
C) approximately 24%
D) approximately 77%
The Riviera Transport Company (RTC) produces car accessories at two plants: Dallas
and Atlanta. They ship them to major distribution centers in Houston, San Jose,
Jacksonville, and Memphis. The accounting, production, and marketing departments
have provided the information in the table below, which shows the unit cost of shipping
between any plant and distribution center, plant capacities over the next planning
period, and distribution center demands. RTC’s supply chain manager faces the problem
of determining how much to ship between each plant and distribution center to
minimize the total transportation cost, not exceed available capacity, and meet customer
demand.
Assume Xij = amount shipped from plant i to distribution center j, where i = 1
represents Dallas, i = 2 represents Atlanta, j = 1 represents Houston, and so on.
According to the transportation model, which of the following is the amount shipped
from Dallas to Houston?
A) 0
B) 175
C) 1,180
D) 750
P(Q|P) = P(Q) – P(P)
Give an account of how the design and format of spreadsheets can be improved.
Data used in business analytics need to be reliable and valid. Explain.
What are the benefits of a Risk Solver Platform sensitivity chart?
Profit is computed as the difference between total revenue from sales and total cost of
production. Revenue depends on the market share captured by a company and the size
of the target market. Various marketing decisions taken by managers are reflected upon
the market share. The decisions also have an impact on marketing costs which in turn
will affect the total cost of production. Construct an influence diagram that relates these
variables.
