Deck 1: Management Science

Question 1

If variable costs increase, but price and fixed costs are held constant, the break-even point will decrease.

Answer 1

False

Question 2

Managers utilize spreadsheets to conduct their own analyses in management science studies.

Answer 2

True

Question 3

Management science techniques focus primarily on observation, model construction, and implementation to find an appropriate solution to a problem.

Answer 3

False

Question 4

Parameters are known, constant values that are usually coefficients of variables in equations.

Question 5

Management science techniques can be applied only to business and military organizations.

Question 6

Fixed cost is the difference between total cost and total variable cost.

Question 7

A management science technique usually applies to a specific model type.

Question 8

The term "sensitivity analysis" refers to testing how a problem solution reacts to changes in one or more of the model parameters.

Question 9

Management science involves the philosophy of approaching a problem in a subjective manner.

Question 10

Management science modeling techniques provide results that are known with certainty.

Question 11

The first step of the management science process is to define the problem.

Question 12

A management science solution can be either a recommended decision or information that helps a manager make a decision

Question 13

The break-even point is the volume that equates total revenue with total cost.

Question 14

A variable is a value that is usually a coefficient of a parameter in an equation.

Question 15

A model is a mathematical representation of a problem situation including variables, parameters, and equations.

Question 16

Data are pieces of information from the problem environment.

Question 17

In general, an increase in price increases the break-even point if all costs are held constant.

Question 18

Variable costs depend on the number of items produced.

Question 19

Fixed costs depend on the number of items produced.

Question 20

Management scientists use the terms "data" and "information" interchangeably--that is, the two terms mean the same thing

Question 21

In both an objective function and a constraint, the decision variables are represented by numbers.

Question 22

Enterprise Resource Planning (ERP) system is a data-oriented decision support system that utilizes specific management science solution procedures to solve individual problems such as cost-volume analysis.

Question 23

A typical objective function might be written as 3S + 2R + 5Z ≤ 20.

Question 24

The difference between volume multiplied by price and the sum of fixed and variable costs is ________.

Question 25

Total revenue minus total cost equals ________.

Question 26

________ costs are independent of the volume of goods produced and remain constant.

Question 27

Electronic data interchange (EDI) is a type of decision support system.

Question 28

A key element of a decision support system (DSS) is the person using the system.

Question 29

Decision Support Systems (DSS) use computers to help decision makers address complex problems.

Question 30

A ________ is a functional relationship including variables, parameters, and equations.

Question 31

________ are pieces of information from the problem environment.

Question 32

A ________ is a symbol used to represent an item that can take on any value.

Question 33

________ are known, constant values that are coefficients of variables in equations.

Question 34

________ depend on the number of items produced.

Question 35

Management science modeling techniques focus on model construction and problem solution.

Question 36

An increase in output typically results in an increase in the ________ cost.

Question 37

The ________ is the volume that equates total revenue with total cost.

Question 38

________ techniques provide results that contain uncertainty, unlike mathematical programming techniques which are deterministic.

Question 39

Management science techniques include ________ techniques, models that are represented as diagrams, presenting a pictorial representation of the system being analyzed.

Question 40

Constraints usually appear as equations that are less than, equal to, or greater than a parameter.

Question 41

A newly opened bed-and-breakfast projects the following:
Monthly fixed costs $8000
Variable cost per occupied room per night $40
Revenue per occupied room per night $165
Write the expression for total revenue per month.

Question 42

A production process requires a fixed cost of $50,000. The variable cost per unit is $25 and the revenue per unit is projected to be $45. Write a mathematical expression for total profit.

Question 43

A ________ programming technique refers to a predetermined set of mathematical steps used to solve a problem.

Question 44

A management science technique that does not assume that all parameters are known with certainty is a(n) ________ technique.

Question 45

A ________ is a computer-based system that helps decision-makers address complex problems that involve different parts of an organization and operations.

Question 46

A production process requires a fixed cost of $50,000. The variable cost per unit is $25 and the revenue per unit is projected to be $45. Write a mathematical expression for total revenue.

Question 47

A script writer has received an advance against royalties of $10,000. The royalty rate is $2 for every performance in the U.S., and $3 for every performance outside the U.S. Define variables for this problem.

Question 48

Researchers at John H. Stroger, Jr. Hospital of Cook County used ________ to address the problem of healthcare-associated infections in hospitals.

Question 49

A production process requires a fixed cost of $50,000 and the variable cost per unit is $25. The revenue per unit was projected to be $45, but a recent marketing study shows that because of an emerging competitor, the revenue will be about 12% lower. How does this affect the break-even point?

Question 50

A production process requires a fixed cost of $50,000. The variable cost per unit is $25 and the revenue per unit is projected to be $45. Find the break-even point.

Question 51

The relationship d = 5000 - 25p describes what happens to demand (d) as price (p) varies. Price can vary between $10 and $50. How many units can be sold when the price is $10?

Question 52

Administrators at a university are planning to offer a summer seminar. It costs $3000 to reserve a room, hire an instructor, and bring in the equipment. Assume it costs $25 per student for the administrators to provide the course materials. If 30 students pay $175 for the privilege of attending the seminar, how much of a profit (or loss) will be incurred?

Question 53

A ________ represents a limitation to achieving maximum profits due to limited resources.

Question 54

________ consist of models that are represented as diagrams rather than as strictly mathematical techniques.

Question 55

Administrators at a university will charge students $150 to attend a seminar. It costs $3000 to reserve a room, hire an instructor, and bring in the equipment. Assume it costs $25 per student for the administrators to provide the course materials. How many students would have to register for the seminar for the university to break even?

Question 56

One way to test how a management science model reacts to changes in its parameters is to conduct ________ analysis.

Question 57

A newly opened bed-and-breakfast projects the following:
Monthly fixed costs $8000
Variable cost per occupied room per night $40
Revenue per occupied room per night $165
Write the expression for total cost per month.

Question 58

A newly opened bed-and-breakfast projects the following:
Monthly fixed costs $8000
Variable cost per occupied room per night $40
Revenue per occupied room per night $165
How many rooms would have to be occupied per month in order to break even?

Question 59

A production process requires a fixed cost of $50,000. The variable cost per unit is $25 and the revenue per unit is projected to be $45. Write a mathematical expression for total cost.

Question 60

Administrators at a university are planning to offer a summer seminar. It costs $3000 to reserve a room, hire an instructor, and bring in the equipment. Assume it costs $25 per student for the administrators to provide the course materials. If we know that 20 people will attend, what price should be charged per person to break even?

Question 61

The field of management science

A) approaches decision making irrationally with techniques based on the scientific method.
B) is another name for management or human resources management.
C) concentrates on the use of quantitative methods to assist managers in decision making.
D) is completely separate and distinct from all other disciplines.

Question 62

A group of professors struggles to craft a set of assessment questions for their operations management intro class. They want to cover four topic areas with at least four questions each and have no more than twenty questions total for the assessment. What would a set of constraints look like if they chose an optimization approach to the assessment?

Question 63

Which of the following is an equation or an inequality that expresses a resource restriction in a mathematical model?

A) a decision variable
B) an objective function
C) a constraint
D) a parameter

Question 64

There is considerable overlap in the scientific method and management science techniques. Which of the following steps is shared between them?

A) observation
B) problem definition
C) model construction
D) implementation

Question 65

The College Coffee Café receives a profit of $1.25 for each cup of house tea that they sell, $1.40 for each cup of the premium brand, and $1.50 for each cup of their special blend. Develop an objective that maximizes profit.

Question 66

A business analyst describes his company's profit function as 3x2 + 6x - 200. If x is the output volume, what statements can you make about the price, fixed cost, and variable cost?

Question 67

The limits of the problem and the degree to which it pervades other units in the organization must be included during the ________ step of the management science process.

A) observation
B) definition
C) solution
D) implementation

Question 68

A manager of the cereal bar at the college campus has determined that the profit made for each bowl of Morning Buzz cereal sold, x, is equal to: Z = $4x - 0.5x. Each bowl of Morning Buzz weighs 6 ounces, and the manager has 12 lbs (192 ounces) of cereal available each day, which can be written as the constraint, 6x ≤ 192. What maximum profit will be made from Morning Buzz if it is all sold in one day?

Question 69

A manufacturer buys peas for vegetable pies from two cooperatives. The price per unit is $6 from cooperative A and $5.50 per unit from cooperative B. Define variables that would tell how many units to purchase from each source.

Question 70

A script writer has received an advance against royalties of $10,000. The royalty rate is $2 for every performance in the U.S., and $3 for every performance outside the U.S. Write an expression that could be used to compute the number of performances in order to cover the advance.

Question 71

The processes of problem observation

A) cannot be done until alternatives are proposed.
B) requires consideration of multiple criteria.
C) is the first step of decision making.
D) is the final step of problem solving.

Question 72

Students are organizing a "Battle of the Bands" contest. They know that at least 100 people will attend. The rental fee for the hall is $150 and the winning band will receive $500. In order to guarantee that they break even, how much should they charge for each ticket?

Question 73

A manufacturer buys peas for vegetable pies from two cooperatives. The price per unit is $6 from cooperative A and $5.50 per unit from cooperative B. The manufacturer needs at least 12,000 units of peas. Cooperative A can supply up to 8000 units, and cooperative B can supply at least 6000 units. Develop constraints for these conditions.

Question 74

Which of the following is incorrect with respect to the use of models in decision making?

A) They improve understanding of the problem.
B) They promote subjectivity in decision making.
C) They are generally easy to use.
D) They provide a systematic approach to problem solving.

Question 75

A manufacturer buys peas for vegetable pies from two cooperatives. The price per unit is $6 from cooperative A and $5.50 per unit from cooperative B. Develop an objective function that would minimize the total cost.

Question 76

A popular performer is scheduled to appear at a major city. The promoter is deciding between two venues, the larger of which costs $20,000 to rent and the smaller of which costs $12,000 to rent. Ticket prices for the smaller venue are $20, but the promoter is unsure what to charge per ticket for the larger venue. If exactly 1000 customers arrive, what percentage change in ticket prices would make the profit at the large venue identical to that of the smaller venue?

Question 77

The College Coffee Café buys tea from three suppliers. The price per pound is $15.00 from supplier A, $17.50 from supplier B, and $21.00 from supplier C. They have budgeted $175 to purchase the tea. The café needs at least 12 pounds of tea, and supplier C can supply no more than 4 pounds. Develop constraints for these conditions.

Question 78

What are some different types of decision support systems?

Question 79

The steps of the management science process are:

A) problem definition, model construction, observation, model solution, implementation.
B) observation, problem definition, model construction, model solution, implementation.
C) model construction, problem definition, observation, model solution, implementation.
D) observation, implementation, problem definition, model construction, model solution.

Question 80

A model is a functional relationship that includes:

A) variables.
B) parameters.
C) equations.
D) all of the above