Deck 3: Business Analytics With Linear Programming

Question 1

According to studies mentioned in Chapter 3, linear programming algorithms are considered to be one of the top 10 most important tools of the last century.

Answer 1

True

Question 2

In a linear programming model, the decision maker always seeks to maximize the objective function.

Answer 2

False

Question 3

Technological coefficients represent the usage of a given resource per each unit of the decision variable.

Answer 3

True

Question 4

A pivot table is a data summarization tool in Microsoft Excel and other business intelligence software.

Question 5

Suppose that the right-hand-side value of a given binding constraint is increased by one unit and within the lower and upper limit. Instead of rerunning the solution, the decision maker can simply check the shadow price to know the exact change of the objective function.

Question 6

Suppose that the right-hand-side value of a given binding constraint is increased by one unit and within the lower and upper limit. Instead of rerunning the solution, the decision maker can simply check the shadow price and know the exact change of the objective function.

Question 7

The reduced cost for a decision variable is the shadow price of the constraint for that variable.

Question 8

Linear programming model constraints are mostly less than or equal to constraints.

Question 9

Linear programming model constraints are mostly greater than or equal to constraints.

Question 10

When incorporating a large amount of input data, the decision maker must calculate model parameters as an additional step in the process of formulating a linear programming model.

Question 11

When incorporating a large amount of input data, formulating the objective function is an additional step in the process of formulating a linear programming model.

Question 12

During sensitivity analysis, the shadow price indicates the maximum value of contribution coefficients that will not alter the value of the objective function.

Question 13

During sensitivity analysis, the shadow price indicates the minimum value of contribution coefficients that will not alter the value of the objective function.

Question 14

During sensitivity analysis, the shadow price indicates the value of the objective function changes when one additional unit of the respective constraint is acquired.

Question 15

If the right-hand-side value of a binding constraint is increased by one unit, then the objective function will change in an amount equal to the value of the reduced cost.

Question 16

If the right-hand-side value of a binding constraint is increased by one unit, then the objective function will change in an amount equal to the shadow price.

Question 17

A magnetic system approach allows data scientists to incorporate only selected sources of data as input values in a linear programming model.

Question 18

An agile system has the ability to produce and adapt data from heterogeneous sources.

Question 19

The implementation of LP models in the era of Big Data requires that data scientists consider a trade-off between less-than-optimal but practical solutions and optimal-but-complex and often delayed solutions.

Question 20

Which of the following is a business situation in which linear programming models can be used?

A) Determining a crop rotation policy in agriculture
B) Determining an optimal subsidy management for farmers
C) Optimizing water networks
D) All of the above

Question 21

Which of the following is not a business situation in which linear programming models can be used?

A) Determining an optimal production level
B) Determining the correlation between production level and resource utilization
C) Optimizing water networks
D) None of the above

Question 22

Which of the following is a challenge for the application of large linear programming (LP) models in the real world?

A) Computational difficulty
B) Lack of software packages for LP models
C) Lack of input data for LP models
D) All of the above

Question 23

The general formulation of linear programming models always includes which of the following?

A) A maximization objective function
B) A set of less-than-or equal-to (?) constraints
C) A set of non-negativity constraints
D) All of the above

Question 24

The general formulation of linear programming models always includes which of the following?

A) A minimization objective function
B) A set of greater-than-or-equal-to (?) constraints
C) A set of non-negativity constraints
D) All of the above

Question 25

The general formulation of linear programming models always includes which of the following?

A) An optimization objective function
B) A set of system constraints
C) A set of non-negativity constraints
D) All of the above

Question 26

The direction of a constraint in a linear programming model can be:

A) Less than or equal
B) Greater than or equal
C) Equal
D) Any of the above

Question 27

When incorporating a large amount of input data, the decision maker must add the following step in the process of formulating a linear programming model:

A) Calculating model parameters
B) Defining decision variables
C) Formulating the objective function
D) Identifying the set of constraints
E) Identifying a set of non-negativity constraints

Question 28

Which of the following functions can be performed with a pivot table?

A) Automatically sorting data stored in a spreadsheet
B) Automatically counting data stored in a spreadsheet
C) Automatically averaging data stored in a spreadsheet
D) All of the above

Question 29

Pivot tables can be used by the decision maker to:

A) Find optimal solutions to linear programming models.
B) Calculate the optimal values for the decision variables.
C) Calculate the average values of operational data.
D) All of the above

Question 30

The "refresh" option in the pivot table allows the decision maker to:

A) Update the input parameters before feeding them into the model.
B) Use the latest operational data as input parameters.
C) Both a and b
D) None of the above

Question 31

Which of the following is a benefit provided by sensitivity analysis?

A) Sensitivity analysis can be used to gain additional insights into the model solution.
B) Sensitivity analysis allows the decision maker to identify the range of contribution coefficients that will not alter the solution.
C) Sensitivity analysis allows the decision maker to identify the range of right-hand-side values that will not alter the solution.
D) All of the above

Question 32

During sensitivity analysis, the shadow price indicates:

A) The maximum value of contribution coefficients that will not alter the value of the objective function.
B) The minimum value of contribution coefficients that will not alter the value of the objective function.
C) The value of the objective function changes when one additional unit of the respective constraint is acquired.
D) All of the above

Question 33

Suppose that the right-hand-side value of a given binding constraint is increased by one unit and within the lower and upper limit. How would this change affect the objective function?

A) The objective function will change by an amount equal to the reduced cost.
B) The objective function will change by an amount equal to the shadow price.
C) The objective function will change by an amount equal to the lower limit of the sensitivity report.
D) The objective function will change by an amount equal to the upper limit of the sensitivity report.

Question 34

The columns "Allowable Increase" and "Allowable Decrease" in the sensitivity report indicate that:

A) The range of greater-than-or-equal-to (?) constraints within the existing optimal solution remains optimal.
B) The range of less-than-or-equal-to (?) constraints within the existing optimal solution remains optimal.
C) The range of the contribution coefficients within the existing optimal solution remains optimal.
D) All of the above

Question 35

Linear programming models are considered to be:

A) A popular tool that can be used to solve selected optimization models.
B) An optimization tool that can be used to solve any business models.
C) A descriptive analytics tool that can be used to analyze organizational data.
D) All of the above

Question 36

In a linear programming model, the decision maker seeks to optimize an objective function while meeting the requirements of certain constraints. Which of the following is not a type of constraint?

A) Resource constraints
B) Non-negativity constraints
C) Maximization constraints
D) All of the above are types of constraints.

Question 37

The implementation of linear programming models as operational business intelligence tools in the era of Big Data requires that decision makers:

A) Attract as many sources of data as possible.
B) Adapt those data from heterogeneous sources.
C) Feed those models directly with the most up-to-date input parameters.
D) All of the above

Question 38

Process-driven models require the implementation of the MAD approach. MAD stands for:

A) Multiplicity, approximation, and deviation
B) Mean absolute deviation
C) Magnetism, agility, and depth
D) Maximization, abstraction, and deviation

Question 39

A magnetic system attracts all sources of data, including all of the following except:

A) Good data.
B) Outliers.
C) Unstructured data.
D) All of the above must be included in a magnetic system.

Question 40

An agile system can process data from different sources and different data formats. An agile system can:

A) Deal with the heterogeneity of data sources.
B) Replace missing values.
C) Allow the decision scientist to manage the variety of data.
D) All of the above must be included in an agile system.

Question 41

A depth approach to optimization models assumes:

A) A direct connection of the optimization packages with operational databases.
B) Complex statistical, machine learning, and optimization analysis.
C) Both a and b
D) None of the above

Question 42

Which of the following is a major step that a modeler must follow to solve large linear programming models?

A) Setting up a template that represents equations of the objective function and constraints.
B) Invoking Solver to generate results
C) Both a and b
D) None of the above