Deck 1: Introduction

Question 1

Decision variables in a production process are those that cannot be controlled by the manager.

Answer 1

False

Question 2

The process of decision making is more limited than that of problem solving.

Answer 2

True

Question 3

A toy train layout designed to represent an actual railyard is an example of an analog model.

Answer 3

False

Question 4

Frederic W.Taylor is credited with providing the foundation for quantitative methodology in the early part of the 20th century.

Question 5

The most critical component in determining the success or failure of any quantitative approach to decision making is problem definition.

Question 6

The last step in any problem-solving process is to choose the correct alternative among those available.

Question 7

To identify the choice that provides the highest profit and also uses the fewest employees,we apply a single-criterion decision process.

Question 8

All uncontrollable inputs or data must be specified before we can analyze the model and recommend a decision or solution for the problem.

Question 9

The value of making a decision based on models is dependent on how closely the model represents the real situation.

Question 10

The decision-making process includes implementation and subsequent evaluation of the decision.

Question 11

A feasible solution is one that satisfies at least one of the constraints in the problem.

Question 12

The first step in the decision-making process is to identify the problem.

Question 13

Uncontrollable inputs are the decision variables for a model.

Question 14

Most successful quantitative analysis models will advise separating the management analyst from the managerial team until after the problem has been fully structured.

Question 15

The breakeven point is the point at which the volume of output produced is the result of total revenue equaling total cost.

Question 16

The feasible solution is the best solution possible for a mathematical model.

Question 17

The optimal solution to a model is one in which known,specific values provide the best output.

Question 18

Model development should be left to quantitative analysts; the model user's involvement should begin at the implementation stage.

Question 19

Problem solving encompasses both the identification of a problem and the action to resolve it.

Question 20

If you are deciding to buy either machine A,B,or C with the objective of minimizing the sum of labor,material and utility costs,you are dealing with a single-criterion decision.

Question 21

A model that uses a system of symbols or expressions to represent a problem is called a(n)______ model.

A)mathematical
B)iconic
C)analog
D)constrained

Question 22

Which of the following is NOT one of the commonly used names for the body of knowledge involving quantitative approaches to decision making?

A)management science
B)business analytics
C)operations research
D)efficiency studies

Question 23

In a multicriteria decision problem

A)it is impossible to select a single decision alternative.
B)the decision maker must evaluate each alternative with respect to each criterion.
C)successive decisions must be made over time.
D)All of these are correct.

Question 24

A thermometer is an example of a model that does not have the same physical appearance as that which is being modeled; thus,it is a(n)

A)analog model.
B)iconic model.
C)mathematical model.
D)qualitative model.

Question 25

The relationship d = 5000 − 25p describes what happens to demand (d)as price (p)varies.Here,price can vary between $10 and $50.
a.How many units can be sold at the $10 price? How many can be sold at the $50 price?
b.Model the expression for total revenue.
c.Consider prices of $20,$30,and $40.Which of these three price alternatives will maximize total revenue? What are the values for demand and revenue at this price?

Question 26

By identifying and defining a problem,we have

A)taken the final step in the decision-making process.
B)proposed all viable alternatives.
C)considered multiple criteria.
D)taken the first step of decision making.

Question 27

George Dantzig is important in the history of management science because he developed

A)the scientific management revolution.
B)World War II operations research teams.
C)the simplex method for linear programming.
D)powerful digital computers.

Question 28

Management science and operations research both involve

A)qualitative managerial skills.
B)quantitative approaches to decision making.
C)operational management skills.
D)scientific research as opposed to applications.

Question 29

The volume that results in total revenue being equal to total cost is known as the

A)breakeven point.
B)marginal volume.
C)marginal cost.
D)profit mix.

Question 30

Inputs to a quantitative model

A)are a trivial part of the problem solving process.
B)are uncertain for a stochastic model.
C)are uncontrollable for the decision variables.
D)must all be deterministic if the problem is to have a solution.

Question 31

A valid reason for using a quantitative approach to the decision-making process is when

A)the problem is repetitive,necessitating routine decision making.
B)the problem is unique and the manager has no prior experience solving this sort of problem.
C)the problem is particularly complex.
D)All of these are correct.

Question 32

Decision criteria

A)are the choices faced by the decision maker.
B)are the problems faced by the decision maker.
C)are the ways to evaluate the choices faced by the decision maker.
D)are unique for any problem.

Question 33

The process of problem definition must

A)include specific objectives and operating constraints.
B)occur prior to the quantitative analysis process.
C)involve both the analyst and the user of the results.
D)All of these are correct.

Question 34

When the value of the output cannot be determined even if the value of the controllable input is known,the model is

A)analog.
B)digital.
C)stochastic.
D)deterministic.

Question 35

The field of management science

A)concentrates on the use of quantitative methods to assist in decision making.
B)approaches decision making rationally,with techniques based on the scientific method.
C)is another name for decision science and for operations research.
D)All of these are correct.

Question 36

In order to undertake problem solving,the first step must be

A)the determination of the correct analytical solution procedure.
B)the definition of decision variables.
C)the identification of a difference between the actual and desired state of affairs.
D)None of these are correct.

Question 37

The set of decision alternatives

A)should be identified before the decision criteria are established.
B)are limited to quantitative solutions.
C)are evaluated as a part of the problem definition stage.
D)are best generated by brainstorming.

Question 38

A snack food manufacturer buys corn for tortilla chips from two cooperatives,one in Iowa and one in Illinois.The price per unit of the Iowa corn is $6.00 and the price per unit of the Illinois corn is $5.50.
a.Define variables that would tell how many units to purchase from each source.
b.Develop an objective function that would minimize the total cost.
c.The manufacturer needs at least 12,000 units of corn.The Iowa cooperative can supply up to 8000 units,and the Illinois cooperative can supply at least 6000 units.Develop constraints for these conditions.
​

Question 39

If all the uncontrollable inputs into the decision-making process are known to the decision maker,the model of decision making is known as "stochastic."

Question 40

The quantitative analysis approach requires

A)the manager's prior experience with a similar problem.
B)a relatively uncomplicated problem.
C)mathematical expressions for the relationships.
D)All of these are correct.

Question 41

Three production processes-A,B,and C-have the following cost structure:
​ ​
a.What is the most economical process for a volume of 8,000 units?
b.How many units per year must be sold with each process to have annual profits of $50,000 if the selling price is $6.95 per unit?
c.What is the breakeven volume for each process?

Question 42

Organizers of an Internet training session will charge participants $150 to attend.It costs $3000 to reserve the room,hire the instructor,bring in the equipment,and advertise.Assume it costs $25 per student for the organizers to provide the course materials.
a.How many students would have to attend for the company to break even?
b.If the trainers think,realistically,that 20 people will attend,then what price should be charged per person for the organization to break even?

Question 43

A computer rework center has the capacity to rework 300 computers per day.The expected number of computers needing to be reworked per day is 225.The center is paid $26 for each computer reworked.The fixed cost of renting the reworking equipment is $250 per day.Work space rents for $150 per day.The cost of material is $18 per computer and labor costs $3 per computer.What is the breakeven number of computers reworked per day?

Question 44

Consider a department store that must make weekly shipments of a certain product from two different warehouses to four different stores.
a.How could a quantitative approach to decision making be used to solve this problem?
b.What would be the uncontrollable inputs for which data must be gathered?
c.What would be the decision variables of the mathematical model? the objective function? the constraints?
d.Is the model deterministic or stochastic?
e.Suggest assumptions that could be made to simplify the model.

Question 45

To establish a driver education school,organizers must decide how many cars,instructors,and students to have.Costs are estimated as follows.Annual fixed costs to operate the school are $30,000.The annual cost per car is $3000.The annual cost per instructor is $11,000 and one instructor is needed for each car.Tuition for each student is $350.Let x be the number of cars and y be the number of students.
a.Write an expression for total cost.
b.Write an expression for total revenue.
c.Write an expression for total profit.
d.​
​
The school offers the course eight times each year.Each time the course is offered,there are two sessions.If they decide to operate five cars,and if four students can be assigned to each car,will they break even?

Question 46

In this portion of an Excel spreadsheet,the user has given values for selling price,the costs,and a sample volume.Give the cell formula for
a.cell E12,breakeven volume.
b.cell E16,total revenue.
c.cell E17,total cost.
d.cell E19,profit (loss).
​

Question 47

An author has received an advance against royalties of $10,000.The royalty rate is $1.00 for every book sold in the United States,and $1.35 for every book sold outside the United States.Define variables for this problem and write an expression that could be used to calculate the number of books to be sold to cover the advance.

Question 48

Jane Persico,facility engineer at the El Paso plant of Computer Products Corporation (CPC),is studying a process selection decision at the plant.A new printer is to be manufactured and she must decide whether the printer will be auto-assembled or manually assembled.The decision is complicated by the fact that annual production volume is expected to increase by almost 50% over three years.Jane has developed these estimates for two alternatives for the printer assembly process:
​ ​
a.Which production process would be the least-cost alternative in Years 1,2,and 3?
b.​
How much would the variable cost per unit have to be in Year 2 for the auto-assembly process to justify the additional annual fixed cost for the auto-assembly process over the manual assembly process?
​

Question 49

A manufacturer makes two products,doors and windows.Each must be processed through two work areas.Work area #1 has 60 hours of available production time per week.Work area #2 has 48 hours of available production time per week.Manufacturing of a door requires 4 hours in work area #1 and 2 hours in work area #2.Manufacturing of a window requires 2 hours in work area #1 and 4 hours in work area #2.Profit is $8 per door and $6 per window.
a.​
Define decision variables that will tell how many units to build (doors and windows)per week.
b.Develop an objective function that will maximize total profit per week.
c.Develop production constraints for work area #1 and #2.

Question 50

A university schedules summer school courses based on anticipated enrollment.The cost for faculty compensation,laboratories,student services,and allocated overhead for a computer class is $8500.If students pay $920 to enroll in the course,how large would enrollment have to be for the university to break even?

Question 51

As part of their application for a loan to buy Lakeside Farm,a property they hope to develop as a bed-and-breakfast operation,the prospective owners have projected: ​
a.Write the expression for total cost per month.Assume 30 days per month.
b.Write the expression for total revenue per month.
c.​
If there are 12 guest rooms available,can they break even? What percentage of rooms would need to be occupied,on average,to break even?
​

Question 52

Zipco Printing operates a shop that has five printing machines.The machines differ in their capacities to perform various printing operations due to differences in the machines' designs and operator skill levels.At the start of the workday there are five printing jobs to schedule.The manager must decide what the job-machine assignments should be.
a.How could a quantitative approach to decision making be used to solve this problem?
b.What would be the uncontrollable inputs for which data must be collected?
c.Define the decision variables,objective function,and constraints to appear in the mathematical model.
d.Is the model deterministic or stochastic?
e.Suggest some simplifying assumptions for this problem.

Question 53

There is a fixed cost of $50,000 to start a production process.Once the process has begun,the variable cost per unit is $25.The revenue per unit is projected to be $45.
a.Write an expression for total cost.
b.Write an expression for total revenue.
c.Write an expression for total profit.
d.Find the breakeven point.