BA 3800 Chapter 1. Introduction

Which of the following is an example of a mathematical model?

- E = mc^2 - Profit = Revenue - Costs

Spreadsheet software for management science assists users by

- Providing a familiar environment - Bringing management science tools within reach of managers

The goal of management science is to

- aid managerial decision making

Managers made decisions based upon

- intangible considerations - qualitative factors - input from management scientists

Managers should be able to

- recognize potential applications for management science - Interpret the results of a management science study

If the decision variable in a mathematical model is "x", which of the following constraints will be needed to ensure production is a value from 0 to 100 units?

- x<= 100 - x> = 0

A mathematical model of a business problem does which of the following?

-Describes the essence of the problem -Provides an approximate representation of the problem

Identify the true statement about management science.

-Management scientists won the Nobel Prize for Economics for developing the portfolio selection technique -Portfolio selection models are being used by financial services firms for decades.

When the value "Quantity" represents the total quantity produced and the value "Fixed_Cost" represents the fixed cost of an activity, which of the following Excel formulas will correctly calculate Total Fixed Cost?

=IF(Quantity>0,Fixed_Cost,0)

The first step in a management science investigation is to

Define the problem and gather data

Management science has the lowest level or relationship to which type of analysis from the field of analytics?

Descriptive analytics

Of the three categories of analytics, which is most likely to provide managers with a current status of how their product is selling in the marketplace?

Descriptive analytics

Management science is a

Discipline with a body of knowledge and techniques

To calculate the break-even point,

Divide the fixed cost by the difference of unit revenue and marginal cost.

The cost to lease a production machine does jot change if production volume increases or decreases. The leasing cost is a _____ cost.

Fixed

Classify the following costs as fixed or variable costs.

Fixed costs: Equipment leases. Research and development costs. Variable Costs: Raw materials. Direct labor.

Match the following tasks with either managers or management scientists.

Managers: Make managerial decisions. Use intangible considerations. Management Scientists: Aid in the decision making process. Provide an analysis based on quantitative factors.

Of the three categories of analytics, which is most likely to be used to help managers forecast how a product will sell in a new market?

Predictive analytics

Of the three categories of analytics, which is most likely to help managers make better decisions about ow to improve their market share?

Prescriptive analytics

A new product should only be introduced if

Production and sales volume exceed the break-even point

Management science is mainly concerned with

Quantitative factors

Rapid development of management science started in

The 1940s and 1950s

In a mathematical model, the decision variable represents which of the following?

The choice to be made by the manager

A spreadsheet model of a break-even analysis calculates Total Variable Cost as

The product of marginal costs and production quantity

True or False: Many companies have used management science to save millions of dollars each year.

True

If production volume is zero, variable costs will be

Zero

Modeling does not replace managerial decision making but instead serves as ____ to decision making.

an aid

While management science is a single discipline with a well-defined body of knowledge, _______ includes the multiple disciplines that make up all of quantitative decision sciences.

analytics

Spreadsheet software makes management science available to managers by

completing mathematical calculations in the background.

If a manufacturer only has enough packages to produce 1,000 units of its product, the mathematical model should include a _______ to limit production to 1,000 or fewer units.

constraint

The break-even point occurs when

costs equal revenues

Prior to the widespread use of spreadsheets in business, management science studies were carried out by

management scientists

Managerial decisions are made by

managers

In a graphical break-even analysis, revenues exceed costs when the production quantity is _________ than the break-even quantity.

more

A range name can be defined by typing a name in the

name box

In a mathematical model, the goal of the form (for example, profits or market share) is given by the algebraic expression called the ____ function.

objective

OR/MS is the abbreviation associated with the combination of _____ _____ and management science.

operations research

Factors in a model that cannot be changes (for example, the amount of labor available in a day) are known as

parameters

Management science teams use the _____ method when conducting analysis.

scientific

Direct labor costs change in relation to production volume. Direct labor costs are __________ costs.

variable

An investigation of how a model's recommendations may change if parameter estimates are incorrect is known as a

what-if analysis

if production volume is zero, variable costs will be

zero