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1) A surplus variable is added to a constraint in order to create an equality, and
represents a quantity of unused resource.
2) Operational gaming involves a single player competing with the computer simulated
game.
3) An automatic car wash is an example of a constant service time model.
4) When the significance level is small enough in the F-test, we can reject the null
hypothesis that there is no linear relationship.
5) Utility theory provides a decision criterion that is superior to the EMV or EOL in that
it may allow the decision maker to incorporate her own attitudes toward risk.
6) Linear programming is typically applied to problems wherein one must make a
decision at a specified point (or points) in time. Dynamic programming is typically
applied to problems wherein one must make a sequence of decisions.
7) The production run model is useful when a firm purchases inventory that is delivered
over a period of time.
8) The concept of a local optimum is affiliated with which of the following?
A) mixed integer programming
B) integer programming
C) linear programming
D) nonlinear programming
E) goal programming
9) 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. The purchase cost is $40 per unit. There
are 250 working days per year. Currently, the company is ordering 500 units each time
an order is placed. Assuming the company uses a safety stock of 20 units resulting in a
reorder point of 60 units, what is the expected lead-time for delivery?
A) 4 days
B) 5 days
C) 6 days
D) 7 days
E) None of the above
10) The break-even point of a simple profit model represents a(n)
A) decision variable.
B) uncontrollable variable.
C) parameter.
D) constant.
E) None of the above
11) A judgmental forecasting technique that uses decision makers, staff personnel, and
respondent to determine a forecast is called
A) exponential smoothing.
B) the Delphi method.
C) jury of executive opinion.
D) sales force composite.
E) consumer market survey.
12) The inspection of cans of juice involves sampling some cans and weighing them.
The overall average for the samples is 39 ounces. Each sample contains 36 cans. The
standard deviation is estimated to be 2 ounces. The 99.7% lower control chart limit for
the average would be
A) 37.67.
B) 38.00.
C) 39.33.
D) 40.00.
E) None of the above
13) Enrollment in a particular class for the last four semesters has been 120, 126, 110,
and 130. Suppose a one-semester moving average was used to forecast enrollment (this
is sometimes referred to as a nave forecast). Thus, the forecast for the second semester
would be 120, for the third semester it would be 126, and for the last semester it would
be 110. What would the MSE be for this situation?
A) 196.00
B) 230.67
C) 100.00
D) 42.00
E) None of the above
14) Find the shortest route from Node 1 to Node 4 using the shortest-route technique.
A) 650
B) 450
C) 550
D) 500
E) 800
15) Table 12-2
According to the information provided in Table 12-2, which presents a queuing problem
solution, what proportion of time is at least one server busy?
A) 0.833
B) 0.758
C) 0.091
D) 0.909
E) None of the above
16) Table 8-3
A marketing research firm would like to survey undergraduate and graduate college
students about whether or not they take out student loans for their education. There are
different cost implications for the region of the country where the college is located and
the type of degree. The survey cost table is provided below:
The requirements for the survey are as follows:
1. The survey must have at least 1500 students
2. At least 400 graduate students
3. At least 100 graduate students should be from the West
4. No more than 500 undergraduate students should be from the East
5. At least 75 graduate students should be from the Central region
6. At least 300 students should be from the West
The marketing research firm would like to minimize the cost of the survey while
meeting the requirements. Let X1 = # of undergraduate students from the East region,
X2 = # of graduate students from the East region, X3 = # of undergraduate students
from the Central region, X4 = # of graduate students from the Central region, X5 = # of
undergraduate students from the West region, and X6 = # of graduate students from the
West region.
According to Table 8-3, the minimum cost is
A) 20500
B) 20000
C) 18950
D) 19625
E) 19400
17) Consider the following two-person game. The payoff for X is given in the table. X
will always play strategy
A) X1.
B) X2.
C) Y1.
D) Y2.
E) Not enough information given
18) Which of the following is not a characteristic of trend projections?
A) The variable being predicted is the Y variable.
B) Time is the X variable.
C) It is useful for predicting the value of one variable based on time trend.
D) A negative intercept term always implies that the dependent variable is decreasing
over time.
E) They are often developed using linear regression.
19) Estimates of the slope, intercept, and error of a regression model are found from
sample data.
20) A company has been receiving complaints about the attitude of some sales clerks.
Over a 10-day period, the total number of complaints was 250. The company wishes to
develop a control chart for the number of complaints. What would the lower control
limit on the number of complaints per day be for a 2 sigma (95.5%) control chart?
A) 20
B) 0
C) 15
D) 10
E) 202.6
21) The use of techniques to forecast how things will be in the future based on past
patterns of data is called ________.
22) Anne Beck recently took over a beauty supply store. Her predecessor always
ordered shampoo in quantities of 100 units. Anne is reevaluating this policy. Based on
her analysis, the cost to place each order is $35 and the holding cost is $8 per shampoo
bottle per year. The annual demand for this product is 2500 bottles. Should Anne
change the current order policy and, if so, how much can she save?
23) The chart one might use to monitor the number of defects per roll of carpet is a
________.
24) You are considering adding a new food product to your store for resale. You are
certain that, in a month, minimum demand for the product will be 6 units, while
maximum demand will be 8 units. (Unfortunately, the new product has a one-month
shelf life and is considered to be waste at the end of the month.) You will pay $60/unit
for this new product while you plan to sell the product at a $40/unit profit. The
estimated demand for this new product in any given month is 6 units(p=0.1), 7
units(p=0.4), and 8 units(p=0.5). Using EMV analysis, how many units of the new
product should be purchased for resale?
25) In decision-making, we use the normal distribution when there are ________.
26) Explain why event probabilities range from 0 to 1.
27) If two events (A,B) are independent, then the conditional probability of P(A|B) =
________.
28) The exponential distribution often describes ________.
29) ( Management also believes that they should produce at least 30 units of the
network model.
Given the above additional information, set this up as a goal programming problem.
