MSIS 3223 Final Exam (Ch. 11, 13, 14)

feasible

A _____ solution is a set of values for the decision variables that satisfy all of the constraints. Linear programs generally have an infinite number of feasible solutions.

Local optimum

A _____ solution is one for which all points close by are no better than the solution (an analogy is being at the top of a mountain when the highest peak is on another mountain).

Numerical instability

A poorly scaled model is one that computes values of the objective, constraints, or intermediate results that differ by several orders of magnitude. As a result, Solver may detect or suffer from "_____."

unbounded

A solution is _____ if the value of the objective can be increased or decreased without bound (that is to infinity for a maximization problem or negative infinity for a minimization problem) without violating any of the constraints. This generally indicates an incorrect model, usually when some constraint or set of constraints have been left out.

In-feasible problem

An _____ is one for which no feasible solution exists - that is, when there is no solution that satisfies all constraints simultaneously.

Decision variables An objective to maximize or minimize Constraints

An optimization model has the following elements:

spreadsheet engineering

Building spreadsheet models, often called _____, is part art and part science. Spreadsheets need to be accurate, understandable, and user friendly.

Scarce resoruces

Constraints generally fall into one of the following categories: Limitations usually involve the allocation of _____.

minimum

Constraints generally fall into one of the following categories: Requirements involve the specification of _____ levels of performance.

Proportional relationships

Constraints generally fall into one of the following categories: _____ are often found in problems involving mixtures or blends of materials or strategies.

Simple bounds

Constraints generally fall into one of the following categories: _____ constrain the value of a single variable.

Balance constraints

Constraints generally fall into one of the following categories: _____ essentially state that input = output and ensure that the flow of material or money is accounted for at locations or between time periods.

General integer variables

Decision variables that are forced to be integers are called _____.

Alternative Optimal Solutions

If a model has _____, the objective is maximized (or minimized) by more than one combination of decision variables, all of which have the same objective function value. Solver does not tell you when they exist and reports only one of the many possible solutions.

Linear optimization model

In an _____ model, some or all of the variables are restricted to being whole numbers.

False

In predictive modeling, verification refers to how well a model represents reality (T/F).

Use Automatic Scaling

In the Solver options, you can check the box _____ and Solver will rescale the values of the objective and constraint functions internally to minimize the effects of poor scaling.

Binary variables

Many optimization models require _____, which are variables that are restricted to being either 0 or 1.

Linear optimization

Many types of financial investment problems are modeled and solved using _____.

One way data tables

Multiple outputs may be evaluated using _____. For example, profit and revenue.

Data validation

One useful Excel tool is the _____ feature, which allows you to define acceptable input values in a spreadsheet and provides an error alert if an invalid entry is made. This can help you avoid inadvertent user errors.

Prescriptive Analytics

Optimization is the most important tool in _____.

Error messages

Poor scaling can cause Solver engines to return different _____.

Uncertainty element

Predictive models incorporate the _____.

Time periods

Predictive models usually involve multiple _____.

requirements

Problem statements such as production must be sufficient to meet promised customer orders would be categorized as a ________ constraint.

True

Requirements involve the specifications of minimum levels of performance (T/F).

A unique optimal solution Alternative (multiple) optimal solutions\ An unbounded solution In-feasibility

Solving a linear optimization model can result in 4 possible outcomes:

Optimal solution

The _____ includes any set of decision variables that optimizes the objective function.

Solver Answer Report

The _____ provides basic information about the solution, including the values of the original and optimal objective function and decision variables.

units

The best way to avoid scaling problems is to choose the "_____" implicitly used in your model.

cash balances

The cash budget also shows the monthly _____ and any short term borrowing used to cover cash shortfalls.

Verification

The process of ensuring that a model is accurate and free from logical errors.

Cash budgeting

The process of projecting and summarizing a company's cash inflows and outflows expected during a planning horizon, usually 6 to 12 months.

Optimization

The process of selecting values of decision variables that minimize or maximize some quantity of interest.

Feasible region

The set of feasible solutions is often called the _____. It is the set of points that satisfy all constraints simultaneously.

= Revenue - Variable Cost - Fixed Cost

The spreadsheet model for Profit is =

zero

The value of Integer Tolerance should be _____ in order to find the guaranteed optimal integer solution.

Nonlinear optimization

There are many situations in which the relationship among variables in a model is not linear, thus, making it a _____ model.

False

To find the guaranteed optimal integer solution, Integer Tolerance must be set to 1 (T/F).

systematic mathematical

To guarantee finding an optimal solution, some type of _____ solution procedure is necessary. Fortunately, such a procedure is provided by the Excel Solver tool.

Fixed Cost + Variable Cost * Quantity Produced

Total Cost =

125,000

Use the following information to answer the question(s) below. Cerebro Manufacturing produces four types of structural support fittings-plugs, rails, rivets, and clips-which are machined on two CNC machining centers. The machining centers have a capacity of 250,000 minutes per year. The gross margin per unit and machining requirements are shown in the spreadsheet below. Using the spreadsheet data above, what is the maximum possible production of rails based on the machine capacity?

Unit Variable Cost * Quantity Produced

Variable Cost =

objective

When a model has a unique optimal solution, it means that there is only one solution that will result in the maximum (or minimum) _____.

Solver could not find a feasible solution

When a problem is in-feasible, Solver will report "_____."

Constraints

_____ are limitations, requirements, or other restrictions that are imposed on any solution, either from practical or technological considerations or by management policy.

Nonlinear problems

_____ are notoriously difficult to solve. Solver cannot guarantee that it will find the absolute best solution (called a global optimal solution) for all problems.

Two way data tables

_____ can evaluate only one output variable. To evaluate multiple output variables, you must construct a multiple of these.

Demand

_____ has an influence on profit by predicting how many units of a product will be sold. Quantity produced is a decision option typically based on this.

Optimization models

_____ have been used extensively in operations and supply chains, finance, marketing, and other disciplines.

Solver

_____ is an add-in package with Excel that was developed by Frontline Systems Inc. and can be used to solve many different types of optimization problems.

Integer Tolerance

_____ is the parameter that specifies when the Solver algorithm will terminate an optimization process with integer constraints.

Objective function

_____ is the quantity that is to be minimized or maximized.

Sales

_____ levels are often used to plan inventory levels.

Practical business

_____ models focus on predicting financial performance, customer retention, and product sales.

Predictive

_____ models focus on understanding the future.

Alternate

_____ optimal solutions exist when any of the allowable increase or allowable decrease values for changing cells are zero.