Deck 1: Linear Programming and Decision-Making Techniques

Question 1

The application of OR techniques involves ………… approach

A) Individual
B) Team
C) Critical
D) None of the above

Answer 1

Team

Question 2

Opportunity loss refers to

A) the expected value of a bad decision.
B) the expected loss from a bad decision.
C) the difference between the actual payoff and the optimal payoff.
D) the regret from not having made a decision.

Answer 2

the difference between the actual payoff and the optimal payoff.

Question 3

All of the following are steps in the decision-making process EXCEPT:

A) Define the problem
B) Compute the posterior probabilities
C) Identify possible outcomes
D) List payoffs

Answer 3

Compute the posterior probabilities

Question 4

A good decision always implies that we

A) will obtain the best final results
B) have used appropriate quantitative analysis.
C) have followed a logical process.
D) have based the decision on all available appropriate information.

Question 5

Which of the following might be viewed as an "optimistic" decision criterion?

A) Hurwicz criterion
B) Maximin
C) Maximax
D) Minimax

Question 6

The equally likely decision criterion is also known as

A) Bayes'.
B) Laplace.
C) minimax.
D) Hurwicz.

Question 7

A point that satisfies all of a problem's constraints simultaneously is a(n)

A) maximum profit point.
B) corner point.
C) intersection of the profit line and a constraint.
D) None of the above

Question 8

The first step in formulating an LP problem is

A) Graph the problem.
B) Understand the managerial problem being faced.
C) Identify the objective and the constraints.
D) Define the decision variables.

Question 9

LP theory states that the optimal solution to any problem will lie at

A) the origin.
B) a corner point of the feasible region.
C) the highest point of the feasible region.
D) the lowest point in the feasible region.

Question 10

In labor planning formulation, how would you write the constraint that there are only 10 fulltime tellers (labeled as T) available?

A) T + 10 > 0
B) T > 10
C) T ?10
D) All of the above are correct ways.

Question 11

A type of linear programming problem that is used in marketing is called the

A) media selection problem.
B) Madison Avenue problem.
C) marketing allocation problem.
D) all of the above

Question 12

In converting a less-than-or-equal constraint for use in a simplex table, we must add

A) a surplus variable.
B) a slack variable.
C) an artificial variable.
D) both a surplus and a slack variable.

Question 13

Unboundedness is usually a sign that the LP problem

A) has finite multiple solutions.
B) is degenerate.
C) contains too many redundant constraints.
D) has been formulated improperly.

Question 14

In applying Vogel's approximation method to a profit maximization problem, row and column penalties are determined by:

A) finding the largest unit cost in each row or column.
B) finding the smallest unit cost in each row or column.
C) finding the difference between the two lowest unit costs in each row and column.
D) finding the difference between the two highest unit costs in each row and column.

Question 15

The northwest corner rule requires that we start allocating units to shipping routes in the:

A) middle cell.
B) Lower right corner of the table.
C) Upper right corner of the table.
D) Upper left-hand corner of the table.

Question 16

In a transportation problem, when the number of occupied routes is less than the number of rows plus the number of columns -1, we say that the solution is:

A) Unbalanced.
B) Degenerate.
C) Infeasible.
D) Optimal.

Question 17

Which of the following is used to come up with a solution to the assignment problem?

A) MODI method
B) northwest corner method
C) stepping-stone method
D) Hungarian method

Question 18

The graph that plots the utility value versus monetary value is called:

A) utility curve.
B) decision tree graph.
C) Laplace curve.
D) benefit curve.