Name:______
Section:______
Exam I
BA 301
Spring 2002
S.K. Norman
WHITE
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Exam I Spring 2002
Select the best answer. 2 Points each.
1. What combination of x and y will yield the optimum for this problem?
Maximize $3x + $15y, subject to (1) 2x + 4y 12 and (2) 5x + 2y 10. (You do NOT need to graph this in order to answer.)
a. x = 2, y = 0
b. x = 0, y = 3
c. x = 0, y = 0
d. x = 1, y = 5
e. none of the above
2. In linear programming, a statement such as "Maximize contribution" becomes a(n)
a. constraint
b. slack variable
c. objective function
d. violation of linearity
e. decision variable
3. Customers of Dell Computers can order their computers on-line. Once the order is placed, Dell starts to assemble the computer. Dell has recently reduced the time it takes to assemble a computer from 10 hours to 8 hours. This is an example of competing by
a. low-cost
b. differentiation
c. response
d. quality
e. none of the above
4. Mass customization has been developed to produce
a. high-volume, high-variety products
b. low-volume, high-variety products
c. high-volume, low-variety products
d. low-variety products at either high- or low-volume
e. high-volume products of either high- or low-variety
5. The likelihood that a decision maker will ever receive a payoff precisely equal to the expected value when making any one decision is
a. high (near 100%)
b. low (near 0%)
c. dependent upon the number of alternatives
d. dependent upon the number of states of nature
e. none of the above
6. In sensitivity analysis, a zero shadow price for a resource ordinarily means that
a. the resource has not been used up
b. the resource is scarce
c. the resource constraint was redundant
d. something is wrong with the problem formulation
e. none of the above
7. Which one of the following products is most likely made in a job-shop environment?
a. graphite pencils
b. personal computers
c. cigarettes
d. McDonald's hamburgers
e. custom furniture
8. An operations manager is not likely to be involved in
a. the identification of customers' wants and needs
b. the design of products and services to satisfy customers' wants and needs
c. the quality of products and services to satisfy customers' wants and needs
d. work scheduling to meet the due dates promised to customers
e. forecasting sales
9. The region which satisfies all of the constraints in linear programming is called the
a. optimum solution space
b. profit maximization region
c. feasible region
d. region of optimality
e. region of non-negativity
10. Decision trees
a. give more accurate solutions than decision tables
b. give less accurate solutions than decision tables
c. are rarely used because one needs specialized software to graph them
d. are especially powerful when a sequence of decisions must be made
e. are too complex to be used by decision makers
11. The fundamental purpose for the existence of any organization is described by its
a. policies
b. procedures
c. strategy
d. mission
e. bylaws
12. Which of the following industries is likely to have low equipment utilization?
a. auto manufacturing
b. machine-tool shop
c. beer making
d. paper manufacturing
e. chemical processing
13. Which of the following is not an operations decision?
a. scheduling
b. layout design
c. price
d. quality
e. inventory
14. Forecasts used for new product planning, capital expenditures, facility location or expansion, and R&D typically utilize a
a. long-range time horizon
b. medium-range time horizon
c. short-range time horizon
d. naive method, because there is no data history
e. all of the above
15. Consider 3 forecasting methods. Method A has a MAD of 10.5; Method B has a Mad of 13.6; and method C has a MAD of 9.7. Which method should be chosen for the greatest accuracy?
a. Method A
b. Method B
c. Method C
d. It depends on which value of a is selected.
e. None of the above
16. A continuous process is commonly used to produce
a. high-volume, high-variety products
b. low-volume, high-variety products
c. high-volume, low-variety products
d. low-variety products at either high- or low-volume
e. high-volume products of either high- or low-variety
17. The dilemma, in the Prisoner’s Dilemma is
a. whether to confess or not to confess
b. that if both players confess then they both win
c. that if both players follow their best strategy they will be worse off than if they cooperate
d. whether to follow a strategy or play randomly
e. none of the above
18. In decision theory, an occurrence or situation over which the decision maker has no control is called a(n)
a. decision tree
b. state of nature
c. alternative
d. decision under uncertainty
e. none of the above
19. In which stage of the product life cycle should product strategy focus on improved cost control?
a. introduction
b. growth
c. maturity
d. decline
e. none of the above
20. Which of the following is not a typical attribute of goods?
a. output can be inventoried
b. often easy to automate
c. high customer interaction
d. output can be resold
e. production and consumption are separate
Problems – each problems is labeled with its point value.
21. (3 pts) The decision tree above represents a decision problem. How many states of nature are in this problem?
a. One
b. Two
c. Three
d. Six
e. None of the above
- (4 pts) The decision with the highest expected value is
a. A
b. B
c. C
d. A & B
e. A & C
23. (4 pts) Compute the MAD for the forecast below:
Quarter / Actual Demand /Forecast
1 / 33 / 402 / 42 / 45
3 / 48 / 50
4 / 59 / 55
a. 4 units per quarter
b. 2 units per quarter
c. –2 units per quarter
d. 8.8%
e. none of the above
Brenda Kelly runs a specialty ski clothing shop outside of Durango, CO. She must place her order for ski jackets well in advance of the ski season because the manufacturer produces them during the summer months. Brenda needs to determine wither to place a large, medium , or small order for jackets. The number sold will depend largely on whether the area receives a heavy, normal, or light amount of snow during the ski season. The following table summarizes the payoff Brenda expects under each scenario.
Amount of snowSize of order / Heavy / Normal / Light
Large / 10 / 7 / 3
Medium / 8 / 8 / 6
Small / 4 / 4 / 4
Payoffs (in $1000s)
24. (2 pts) Determine the best decision using the optimistic approach.
a. Large
b. Medium
c. Small
d. Not enough information
e. None of the above
25. (4 pts) A local psychic claims that she has correctly predicted the amount of snowfall for the last 9 out of 10 years. Brenda is tempted. What is the maximum that Brenda should be willing to pay for a snowfall prediction?
a. $4200
b. $3700
c. $550
d. $500
e. None of the above
26. (4 pts) Brenda estimates that the probability of a heavy snowfall is 0.25, the probability of a normal snowfall is 0.60, and the probability of a light snowfall is 0.15. What is the best decision and expected payoff using the expected value approach?
a. Large, $7150
b. Medium, $8200
c. Medium, $7700
d. Small, $4000
e. None of the above
27. (3 pts) Determine the best decision using the conservative approach.
a. Large
b. Medium
c. Small
d. Not enough information
e. None of the above
28. (4 pts) For the spreadsheet below, determine the value that will be printed in cell E5.
a. 4.0
b. 5.6
c. 7.0
d. 20.0
e. None of the above
The Outdoor Furniture Company manufactures two products, benches and picnic tables. The firm has two main resources: its carpenters (labor force) and a supply of redwood. During the next production cycle, 1,200 hours of labor are available under a union agreement. The firm also has a stock of 3,500 board feet of quality redwood. Each bench requires 4 labor-hours and 10 board-feet of redwood; each picnic table takes 6 labor-hours and 35 board-feet. Completed benches will yield a profit of $9 each, and tables will result in a profit of $20 each. Formulate an LP to determine the number of tables and benches to produce in order to optimize profit. Answer the following questions regarding the LP formulation. Let B represent the number of benches and T represent the number of tables.
29. (4 pts) The objective function is
a. MAX 9B + 20T
b. =sumproduct(9B + 20T)
c. MAX 9B + 20T £ 3500
d. 10B + 35T £ 3500
e. None of the above
30. (4 pts) The labor-hour constraint is
a. B + T £ 1200
b. 4B + 10T £ 1200
c. 4B + 6T £ 1200
d. 10B + 35T £ 3500
e. None of the above
MSA Computer Corporation manufactures two models of minicomputers, the Alpha 4 and Beta 5. The firm employs 5 technicians, working 160 hours each per month, on its assembly line. Management insists that full employment (that is, ALL 160 hours of time) be maintained for EACH worker during next month’s operations. It requires 20 labor-hours to assemble each Alpha 4 computer and 25 labor-hours to assembly each Beta 5 model. MSA wants to produce at least 10 Alpha 4s and at least 15 Beta 5s. Alpha 4s generate $1200 profit per unit, and Beta 5s yield $1800 each. This problem has been formulated as an LP and solved using Excel solver. Use the answer and sensitivity reports below to answer the next 2 questions.
Microsoft Excel 9.0 Answer ReportTarget Cell (Max)
Cell / Name / Original Value / Final Value
$D$12 / Profit Total Profit / 0 / 55200
Adjustable Cells
Cell / Name / Original Value / Final Value
$B$10 / Number of computer Alpha 4 / 0 / 10
$C$10 / Number of computer Beta 5 / 0 / 24
Constraints
Cell / Name / Cell Value / Formula / Status / Slack
$D$4 / Labor-hours Used / 800 / $D$4<=$E$4 / Binding / 0
$D$5 / Alpha 4 Min Used / 10 / $D$5>=$E$5 / Binding / 0
$D$6 / Beta 5 Min Used / 24 / $D$6>=$E$6 / Not Binding / 9
Microsoft Excel 9.0 Sensitivity Report
Adjustable Cells
Final / Reduced / Objective / Allowable / Allowable
Cell / Name / Value / Cost / Coefficient / Increase / Decrease
$B$10 / Number of computer Alpha 4 / 10 / 0 / 1200 / 240 / 1E+30
$C$10 / Number of computer Beta 5 / 24 / 0 / 1800 / 1E+30 / 300
Constraints
Final / Shadow / Constraint / Allowable / Allowable
Cell / Name / Value / Price / R.H. Side / Increase / Decrease
$D$4 / Labor-hours Used / 800 / 72 / 800 / 1E+30 / 225
$D$5 / Alpha 4 Min Used / 10 / -240 / 10 / 11.25 / 10
$D$6 / Beta 5 Min Used / 24 / 0 / 15 / 9 / 1E+30
31. (4 pts) What is the optimal product mix for MSA computers?
a. Alpha 4 = 0; Beta 5 = 0
b. Alpha 4 = 0; Beta 5 = 9
c. Alpha 4 = 10; Beta 5 = 24
d. Alpha 4 = 800; Beta 5 = 9
e. None of the above
32. (4 pts) An additional assembler can be hired full-time (160 hours). If the wage-rate for assemblers is $15/hour should this additional assembler be hired?
a. No, $15 exceeds the shadow price.
b. Yes, the shadow price is larger than $15/hours.
c. No, we are not within the allowable range.
d. Not enough information. Need to re-run the model.
e. None of the above
33. (4 pts) Small Wonder, an amusement park, experiences seasonal attendance. It has collected attendance data by season. The annual attendance for next year has been forecasted to be 1525 (in thousands).
Quarter / Park Attendance (thousands)Fall / 352
Winter / 156
Spring / 518
Summer / 314
Determine the forecast for next Spring.
a. 129
b. 518
c. 591
d. 2358
e. none of the above
An internet bookstore that sells retail books had the following historical demand. Use the following information to answer the next 4 questions.
1 / 7731
2 / 8329
3 / 9199
4 / 10306
5 / 11524
6 / 12381
7 / 12688
8 / 13179
SUMMARY OUTPUT
Regression Statistics
Multiple R / 0.9831
R Square / 0.9665
Adjusted R Square / 0.9598
Standard Error / 371.3897
Observations / 7
ANOVA
df / SS / MS / F / Significance F
Regression / 1 / 19896486.04 / 19896486.04 / 144.25 / 0.00
Residual / 5 / 689651.68 / 137930.34
Total / 6 / 20586137.71
Coefficients / Standard Error / t Stat / P-value / Lower 95% / Upper 95%
Intercept / 6871.75 / 377.96 / 18.18 / 0.00 / 5900.17 / 7843.33
Year / 842.96 / 70.19 / 12.01 / 0.00 / 662.55 / 1023.38
34. (3 pts) Compute the 3-year moving average forecast for the 9th year. (INTERNET BOOKSTORE)
a. 7,731
b. 9,199
c. 8,420
d. 12,198
e. 12,749
35. (3 pts) Compute the exponential smoothing forecast for the 9th year. (INTERNET BOOKSTORE)
a. 7,731
b. 12,296
c. 12,749
d. 13,881
e. None of the above
36. (2 pts) Compute the naive forecast for the 9th year. (INTERNET BOOKSTORE)
a. 7,731
b. 12,296
c. 13,179
d. 13,881
e. None of the above
37. (4 pts) Compute the regression analysis forecast for the 9th year. (INTERNET BOOKSTORE)
a. 7,731
b. 10,273
c. 14,458
d. 17,054
e. None of the above
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