Question 1

In the ExxonMobil case study, the approach taken was to find individual solutions to routing, transportation, scheduling, and inventory management, and select the best solution for one of the variables.

Accepted Answer

The approach taken in the ExxonMobil case study was to develop an integrated system that addressed all aspects of the supply chain simultaneously, rather than finding individual solutions for each variable separately. This allowed them to optimize the overall system and improve efficiency across the entire supply chain.

Question 2

Linear programming seeks to optimally allocate resources among competing activities and is likely the best known optimization model.

Accepted Answer

This statement accurately describes linear programming and its purpose.

Question 3

Most managerial problems can be properly evaluated and solved using a single goal, such as profit maximization.

Accepted Answer

While profit maximization is an important goal for many businesses, it is not the only goal. Other important goals may include customer satisfaction, employee satisfaction, social responsibility, and sustainability. Proper evaluation and solution of managerial problems requires consideration of all relevant goals and factors.

Question 4

The trend is towards developing and using Web tools and software to access and run modeling software.

Accepted Answer

With the advancements in technology, more and more modeling software is being made available online and accessible through web-based tools and software. This trend is expected to continue in the future.

Question 5

In order to be effective, analysts must use models to solve problems with no regard to the organizational culture to find optimal results.

Accepted Answer

This statement is false. Analysts must consider the organizational culture when using models to solve problems in order to ensure that their solutions are feasible and acceptable within the context of the organization. Ignoring the organizational culture may lead to solutions that are not practical or sustainable in the long term.

Question 6

Using data cubes in OLAP systems opens the data up to analysis by more classes of models.

Accepted Answer

The answer of Using data cubes in OLAP systems opens...

Question 7

The analytic hierarchy process incorporates both qualitative and quantitative decision making criteria.

Accepted Answer

The analytic hierarchy process (AHP) is a decision-making tool that incorporates both quantitative and qualitative criteria to help users make more informed decisions. It involves breaking down a decision into multiple criteria and alternatives, and then evaluating and comparing these criteria and alternatives through a process of pairwise comparisons. This allows users to consider both objective and subjective factors, such as cost, time, risk, personal values, and preferences, in a systematic and structured manner. By doing so, the AHP can help users identify the most suitable option based on their priorities and constraints, and minimize the risk of making biased or irrational decisions.

Question 8

In the Harrah's Cherokee Casino and Hotel case study, the revenue management system modified room prices based on demand and offered the same price/availability to all customers at any one time.

Accepted Answer

The revenue management system at Harrah's Cherokee Casino and Hotel adjusted room prices based on demand, but it did not offer the same price/availability to all customers at any one time. Instead, it used dynamic pricing strategies to optimize revenue.

Question 9

AHP can be used effectively for optimization with problems containing a small number of alternatives.

Accepted Answer

AHP is effective for problems with a small number of alternatives as it becomes increasingly complex as the number of alternatives increase.

Question 10

Sensitivity analysis seeks to assess the impact of changes in the input data and parameters on the proposed solution.

Accepted Answer

Sensitivity analysis is a technique used to study the effects of changes in the input data or parameters on the model's output or solution. It helps to understand the model's behavior and the robustness of the solution when the input data or parameters are varied. Therefore, the proposed statement is true.

Question 11

Taking a decision under risk is different from taking the decision under uncertainty.

Accepted Answer

Taking a decision under risk involves knowing the probability of outcomes, while taking a decision under uncertainty involves not knowing the probability of outcomes.

Question 12

If linear programming can be successfully applied a problem, the output is usually optimal.

Accepted Answer

Linear programming is designed to find the optimal solution for a problem, so if it can be successfully applied, it will find the optimal solution. However, if the problem is not properly modeled or if there are errors in the input data, the output may not be optimal.

Question 13

Goal seeking is roughly the opposite of "what-if" analysis.

Accepted Answer

Goal seeking involves setting a specific target and calculating the inputs required to achieve that goal, while "what-if" analysis involves testing different scenarios and their potential outcomes. Therefore, they are opposite approaches.

Question 14

Modeling can be viewed as a science in its entirety.

Accepted Answer

Modeling is not a science in its entirety; it is a tool used within various scientific disciplines to represent, analyze, and predict phenomena.

Question 15

Using expected value (EV) with decision trees is totally appropriate for situations where one outcome could lead to an immense loss for the company.

Accepted Answer

Expected Value (EV) does not account for the variability or risk associated with outcomes, especially when one outcome could lead to an immense loss. It averages out the outcomes, potentially underestimating the impact of highly negative scenarios.

Question 16

When using Excel's Solver, we can have multiple constraints and multiple objective cells.

Accepted Answer

In Excel's Solver, you can have multiple constraints, but you are limited to a single objective cell that you want to optimize.

Question 17

In the Midwest ISO opening vignette, the solution provided by the model's output determined the best output level to be produced by each power plant.

Accepted Answer

In the Midwest ISO vignette, the model's output indeed determined the optimal level of production for each power plant to meet the demand efficiently and cost-effectively.

Question 18

In the U.S. HUD case study, the use of AHP brought standards and coherence to project selection, resulting in a 10% decrease in project requests from 1999 levels.

Accepted Answer

The use of AHP (Analytic Hierarchy Process) in the U.S. HUD (Department of Housing and Urban Development) case study did not result in a decrease in project requests; instead, it helped in prioritizing projects based on a set of criteria, making the selection process more efficient and transparent. The statement about a 10% decrease in project requests is not directly related to the outcomes of implementing AHP for project selection.

Question 19

Spreadsheets are the second most popular tool for modeling.

Accepted Answer

Spreadsheets, particularly Microsoft Excel, are actually the most popular tool for modeling due to their versatility, user-friendly interface, and widespread availability.

Question 20

Another name for result variables is independent variables.

Accepted Answer

Result variables are also known as dependent variables, while independent variables are the variables that are manipulated or controlled in an experiment.

Quiz 9: Model-Based Decision Making: Optimization and Multi-Criteria Systems