Management Science

The two fundamental decisions that you have to make when controlling inventory are: (1)__________ , and (2) ____________.

(1) How much to order (2) When to order

Determine where the following constraints intersect. a) 5X + 23Y <= 1000 b) 10X + 26Y <= 1600

(108,20)

Consider the linear regression model Y = 389.10 - 14.6X for the time-series-based sales trend of a product. If the r2 value of the regression model is 0.657, what is the correlation coefficient?

0.811

Consider the following: Maximize Revenue = 4X+10Y Subject to: 3X+4Y <= 480 4X+2Y <= 360 all variables >= 0 Feasible corner points: (48,84), (0,120), (0,0) and (90,0). What is the optimum Revenue for this case that will not breach the constraints?

1,200

The annual demand for pH sensors is 1,000 units. The company orders 200 units each time an order is placed. The lead-time is 6 days, and the company has determined that 20 units should be held as a safety stock. There are 250 working days per year. What is the reorder point?

44

The annual demand for Arduino boards has been projected at 2,000 units. This demand is assumed to be constant throughout the year. The ordering cost is $20 per order, and the holding cost is 20 percent of the purchase cost. The purchase cost is $40 per unit. There are 250 working days per year. Currently, the company is ordering 500 units each time an order is placed. Assuming the company uses a safety stock of 20 units resulting in a reorder point of 60 units, what is the expected lead-time for delivery?

5 days

Any time that we have a/an ______ line that is parallel to a constraint, then we have the possibility of multiple solutions.

Isoprofit

Gantt charts contain information about the time taken by each activity, but not about the sequential dependencies of the activities. True False.

True

Mutually exclusive events exist if only one of the events can occur on any one trial. True False

True

Saying that a set of events is mutually exclusive and collectively exhaustive implies that one and only one of the events can occur on any trial. True False

True

Sensitivity analysis enables us to look at the effects of changing the coefficients in the objective function, one at a time. True False

True

The number of bad checks written at a local pharmacy store is an example of a discrete random variable. True False

True

Trend-adjusted exponential smoothing requires selection of two smoothing constants.

True

The probability of getting three heads by tossing a single fair coin three times is: a) 0.5 b) 0.125 c) 0.75 d) none of the above

b. 0.125

The method of least squares which optimizes a regression line is intended to _________ the sum of squared errors. a. maximize b. differentiate c. minimize d. integrate e. None of the above

c. minimize

In linear programming, resource restrictions and limitations are called ____.

constraints

Decomposition is a forecasting process of isolating _______ and _______ to develop more accurate forecasts.

linear trend seasonal factors

The standard deviation of a random variable is equal to the __________ of the variance.

square root

For this set of errors: -1, -4, 0, +2, +3, MAD is _________.

0

If the arithmetic mean of the total sales invoice amount paid for grocery items by 120 customers is PhP1,000.00 and the standard deviation is PhP130.00, then assuming that these sales payments based on invoice are normally distributed, what is the probable number of customers that paid a total invoice amount of: 1. [10 points or nothing] less than PhP870.00 (corresponding to -1 std dev) 2. [10 points or nothing] more than PhP1,130.00 (corresponding to +1 std dev)

1. 19 2. 19

A company manufactures a product in two models; Regular (X) and Deluxe (Y). The following LP formulation is used: Maximize profit= 50X + 60Y Subject to: 8X+ 10Y <= 800 (labor hours) X + Y <= 120 (total demand units) 4X + 5Y <= 500 (raw materials) all variables >= 0 How many units of the Regular model would be produced based on the given formulation, if optimal solution gives X=100, Y=0?

100 Regular model

Historical records of Balay Construction Company (BCC) on single-storey building projects show that mean completion period of this kind is 100 days and std. dev. is 20 days. A client enters an agreement with BCC of project contract completion in 125 days else severe penalty will be imposed. Probability to finish on time is 0.89. However, client says that he is most willing to award the BCC with a PhP500,000.00 bonus should the project be completed in 75 days - a slim probability at around 0.106 probability only. As field manager of BCC designated to handle the project, you wanted to re-negotiate with client to change the 75-day completion to a doable cut-off time, which based on records earliest completion for such type of project is possible at a probability of 0.5596 or around 60% chance. If this re-negotiation succeeds, then you can motivate your workers to finish this project on time without sacrificing quality, and in return, they get prorated bonus each. What is this new doable bonus-inspired cut-off time which you are going to propose in the re-negotiation with client?

103 days

Given an activity's optimistic, most likely, and pessimistic time estimates of 5, 7, and 9 days respectively, compute the PERT expected activity time for this activity.

7 days

Don Trump sells 3,600 electric motors each year. The cost of these is $200 each, and demand is constant throughout the year. The cost of placing an order is $40, while the holding cost is $20 per motor-year. There are 360 working days per year and the lead-time is 5 days. If Don orders 200 motors each time he places an order, what would his total ordering cost be for the year?

720

The mathematical theory behind linear programming states that an optimal solution to any problem will lie at a/an ________ of the feasible region.

Corner Point

Which of the techniques in Project Management is a deterministic analytical tool allowing managers to derive precise times of activities in a project: PERT or CPM? Spell it out.

Critical Path Method

_____________ is the process of isolating linear trend and seasonal factors to develop more accurate forecasts.

Decomposition method

A forecast that uses a number of most recent actual data values in generating a forecast is called ____________.

Exponential Smoothing

An objective function is necessary in a maximization problem but is not required in a minimization problem. True False

False

Given the variability of the activity completion times, the original critical path we identify in our PERT analysis may always be the actual critical path as the project takes place. True False.

False

In a transportation problem, a single source is not allowed to supply something to all destinations.

False

PERT is a probabilistic project management tool. Its Optimistic Time has the greatest estimated amount of time that could be required to complete an activity. True False

False

_________ is a modeling technique that consists of linear relationships representing a business decision, given an objective and a set of resource constraints.

Linear Programming

Customer Age (yrs old) Pedro ? Juan ? Maria 27 Pablo ? George ? Customers' age standard deviation = 0 Required: Given the above condition, what should be the respective ages of Pedro, Juan, Pablo and George?

Pedro 27 Juan 27 Maria 27 Pablo 27 George 27

In Project Management context, spell out PERT.

Program Evaluation and Review Technique

__________ is a component of time series. It refers to short term regular variations related to the calendar or time of day.

Seasonality

In regression analysis, the estimate of the standard deviation of the errors is also called the ____________.

Standard Deviation of the Regression

Which of the following isn't a valid constraint in a linear programming problem? Why? a) X + X*X + Y >= 12 b) X - 2Y <= 20 c) X + 3Y + W <= 48 d) X - Y + Z <=150 e) all of the above f) none of the above.

a) X + X*X + Y >= 12

In trend-adjusted exponential smoothing, the trend-adjusted forecast consists of: a) an exponentially smoothed forecast and a smoothed trend factor. b) an exponentially smoothed forecast and an estimated trend value. c) the old forecast adjusted by a trend factor. d) the old forecast and a smoothed trend factor. e) a moving average and a trend factor.

a) an exponentially smoothed forecast and a smoothed trend factor.

In any regression model, there is an implicit assumption that a relationship exists between the variables. ______ a. True b. Maybe c. False d. Not sure

a. True

When the significance level is small enough in the F-test, then we can reject the null hypothesis that there is no linear relationship. ____ a. True b. Maybe c. False d. Not sure

a. True

Averaging techniques in forecasting context are useful for: a) distinguishing between random and nonrandom variations. b) smoothing out fluctuations in time series. c) eliminating historical data. d) providing accuracy in forecasts. e) nothing

b) smoothing out fluctuation in time series

Maximize 5X + 6Y Subject to: 4X + 2Y <= 420 1X + 2Y <= 120 all variables >= 0 Which of the following points (X,Y) is not a feasible corner point? a) (0,60) b) (105,0) c) (120,0) d) (100,10) e) all of the above f) none of the above

c) (120,0)

The "point at which to reorder" depends directly on which of the following? a) EOQ b) ordering cost c) lead-time d) storage costs e) unit purchasing cost

c) lead-time

Specifically, the objective of an assignment problem solution most often is to ________ the total costs or time of performing the assigned tasks. a) maximize b) quantify c) minimize d) present e) none of the above

c) minimize

In making inventory decisions, the purpose of the basic EOQ model is to a) minimize carrying costs. b) minimize ordering costs. c) minimize the sum of carrying costs and ordering costs. d) minimize customer dissatisfaction. e) minimize stock on hand.

c) minimize the sum of carrying costs and ordering costs.

The __________ indicates the unexplained variability in the dependent variable. This is zero (0) when the coefficient of determination (r2) is 1. a. SSR b. correlation coefficient c. SSE d. SST e. coefficient of determination f. None of the above

c. SSE

The process of reducing the total time that takes to complete a project by expending additional resources is known as _______________.

crashing

Given an actual demand of 59, a previous forecast of 64, and an alpha of 0.3, what would the forecast for the next period be using simple exponential smoothing? a) 36.9 b) 57.5 c) 60.5 d) 62.5 e) 65.5

d) 62.5

What is said to exist when total demand equals total supply in a transportation problem? a) an equalized problem b) an equilibrized problem c) a harmonized problem d) a balanced problem e) this situation can never occur.

d) a balanced problem

A forecast based on the previous forecast plus a percentage of the forecast error is: a) a naive forecast. b) a simple moving average forecast. c) a centered moving average forecast. d) an exponentially smoothed forecast. e) an associative forecast.

d) an exponentially smoothed forecast.

The critical path of a network is the a) shortest time path through the network. b) path with the fewest activities. c) path with the most activities. d) longest time path through the network. e) none of the above.

d) longest time path through the network.

The EOQ model without the instantaneous receipt assumption is commonly called the a) quantity discount model b) safety stock model c) planned shortage model d) production run model e) None of the above

d) production run model

A ________ is a numerical statement about the likelihood that an event will occur. a) mutually exclusive construct b) collectively exhaustive construct c) variance d) probability e) standard deviation f) none of the above

d. probability

Using a general LP model for transportation problems, if there are 8 sources and 7 destinations, which of the following statements is true? a) There are typically 8 decision variables and 7 constraints. b) There are typically 56 decision variables and 56 constraints. c) There are typically 15 decision variables and 15 constraints. d) There are typically 15 decision variables and 56 constraints. e) There are typically 56 decision variables and 15 constraints.

e) There are typically 56 decision variables and 15 constraints.

In the ABC analysis of inventory, the A group items a) are critical to the functioning of the organization. b) are the most expensive class of items. c) typically account for over 70 percent of the company's business in dollars. d) typically account for about 10 percent of a company's inventory items. e) all of the above

e) all of the above

Typical resources in an organization include: a) machinery usage b) labor volume c) warehouse space utilization d) raw material usage e) all of the above f) none of the above

e) all of the above

"The probability of event B, given that event A has occurred" is known as a ________ probability. a) continuous b) marginal c) simple d) joint e) conditional f) none of the above

e) conditional

One of the applications of transportation models may be used when a business firm is trying to decide about a new __________. a) employee shift scheduling b) production mix c) media selection d) portfolio selection e) facility location f) none of the above

e) facility location

Infeasibility in a linear programming problem occurs when: a) there is an infinite solution b) a constraint is redundant c) more than one solution is optimal d) the feasible region is unbounded e) there is no solution that satisfies all the constraints f) none of the above.

e) there is no solution that satisfies all the constraints

Which of the following is not a property of linear programs? a) one objective function b) at least two separate feasible regions c) alternative courses of action d) one or more constraints e) objective function & constraints are linear f) none of the above.

f) none of the above.

A/An _________ is often reflected in PERT diagrams or Gantt charts which highlights an important and a major event in a project.

milestone

A two-variable linear program implies that we are always working in the northeast quadrant of a graph because of ______ of variables in the constraints.

nonnegativity

A transportation problem that uses minimization approach having intermediate points is called a _______ problem

transshipment