Chapter 1 Introduction to Quantitative Analysis

Operations Research is known as

the science of better

All problems can be solved by considering only the quantitative issues. T or F

FALSE

Decision variables may also be called parameters. T or F

FALSE

In the Early 1900s, Henry Ford pioneered the principles of the scientific approach to management T or F

FALSE

Who is credited with pioneering the principles of the scientific approach to management?

Frederick W. Taylor

A set of logical and mathematical operations performed in a specific sequence is called a(n)

algorithm

What Excel feature is an optimization technique that can maximize or minimize a quantity given a set of limitations or constraints?

solver

A controllable variable is also called a ________ variable.

decision

Quantitative analysis is ________.

the scientific approach to managerial decision making

Managers do not need to be familiar with the limitations, assumptions, and/or specific applicability of the quantitative analysis technique to use it for accurate decision making. T or F

FALSE

The Quantitative Analysis Approach consists of six steps. T or F

FALSE

Trying various approaches and picking the one resulting in the best decision is called incomplete enumeration. T or F

FALSE

When a problem is difficult to quantify, it may be necessary to develop unspecific objectives. T or F

FALSE

One problem in using a quantitative model is that the necessary data may be unavailable. T or F

TRUE

What are some possible problems in the quantitative analysis approach.

conflicting viewpoints, ignoring the impact on other departments, poor assumptions, outdated solutions, difficulty matching the textbook approach, trading off model complexity with ease of understanding, poor input data, hard-to-understand mathematics, and having only one answer is limiting.

A controllable variable is also called a

decision variable

A measurable quantity that may vary, or is subject to change, and can be controlled is known as a(n)

decision variable

The break-even point of a simple profit model represents a(n)

decision variable

Trying various approaches and picking the one that results in the best decision is called

the trial and error method

What are the steps of the quantitative analysis approach.

(1) Defining the Problem, (2) Developing a Model, (3) Acquiring Input Data, (4) Developing a Solution, (5) Testing the Solution, (6) Analyzing the Results, and (7) Implementing the Results

What are three potential problems with people (two with management and one with the quantitative analysts themselves) that may hinder successful implementation of a quantitative model.

(1) lack of commitment by management, (2) resistance to change by management, and (3) lack of commitment by quantitative analysts.

Which of the following is not one of the steps in the quantitative analysis approach? A) Defining the Problem B) Developing a Solution C) Observing a hypothesis D) Testing a Solution E) Implementing the Results

C) Observing a Hypothesis

________ models do not involve risk or chance.

Deterministic

Which of the following statement(s) are true regarding the advantages of mathematical modeling? A) Models accurately represent reality. B) Models can help decision makers formulate problems. C) Models can save time. D) Models may be the only way to solve some large and complex problems in a timely manner. E) All of the above

E) All of the above

Stochastic models are synonymous with A) deterministic models B) schematic models. C) qualitative models. D) conceptual models. E) None of the above

E) None of the above

A mathematical model shows the relationship between quantifiable and non-quantifiable information. T or F

FALSE

A parameter is a measurable quantity that may vary or is subject to change. T or F

FALSE

All of the following are real computer applications that perform quantitative analysis except A) Solver in Excel. B) Goal Seek in Excel. C) Excel QM. D) POM-QM for Windows. E) QA for Windows.

QA for Windows

The widespread applicability of operations research methods to business followed which war?

World War II

Expressing profits through the relationship among unit price, fixed costs, and variable costs is an example of

a quantitative analysis model

Evaluating all possible values of a variable in a model is called

complete enumeration

Models that do not involve risk or chance are

deterministic model

What is the formula for the break-even point of a simple profit model?

f / (s-v)

The condition of improper data yielding misleading results is referred to as

garbage in, garbage out

A(n) ________ is a representation of reality or a real-life situation.

model

If input data are accurate to three significant digits, then the solution results can be accurate to how many significant digits?

three

A(n) ________ model is one that is accurate and correctly represents the problem or system under investigation.

valid

As one attempts to develop a model, which of the following problems might she encounter? A) The problem may not fit a textbook approach. B) There will be no data available to test the model. C) Not everyone will understand the problem in the same way. D) All of the above E) None of the above

D) All of the above

Which of the following is not considered a possible problem in the quantitative analysis approach? A) validity of the data B) lack of commitment C) resistance to change D) subjective solutions E) hard-to-understand mathematics

D) subjective solutions

A profit equation is an example of a schematic model. T or F

FALSE

________ models are synonymous with stochastic models.

Probabilistic

A model is a representation of a situation. T or F

TRUE

A sensitivity analysis allows a manager to answer the "what if" questions. T or F

TRUE

A series of steps or procedures that are repeated is known as an algorithm. T or F

TRUE

During World War II, many new scientific and quantitative techniques were developed to assist the military, and these developments were so successful that many companies started using similar techniques in managerial decision making and planning after the war. T or F

TRUE

Interviews, statistical sampling, and company reports provide input data for quantitative analysis models T or F

TRUE

Model variables can be controllable or uncontrollable. T or F

TRUE

Models can help us analyze a problem and sell a decision to those who must implement it. T or F

TRUE

Sensitivity analysis helps us estimate the effect of known and unknown errors in our model. T or F

TRUE

Testing the data and model should be done before the results have been analyzed. T or F

TRUE

What Excel feature allows the user to specify a target or goal and the variable that is desired to change in order to achieve that goal

goal seek

What term is interchangeable with quantitative analysis?

management science

A measurable quantity that is inherent in the problem is called a(n)

parameter

In making a decision, both ________ and quantitative factors must be considered.

qualitative

The break-even point is an example of a

quantitative analysis model

What is a picture, drawing, or chart of reality?

schematic model

The ability to examine the variability of a solution due to changes in the formulation of a problem is an important part of the analysis of the results. This type of analysis is called ________ analysis.

sensitivity

Postoptimality analysis is most closely associated with

sensitivity analysis

Once we have a solution, we should then perform ________ analysis.

sensitivity or postoptimality analysis