SCM4385 Part 2

A transportation problem with three sources and four destinations will have seven variables in the objective function.

False

In a transportation problem, excess supply will have a positive dual price in the linear programming solution.

False

In transportation problems, the three sets of input numbers that are required are capacities, demands and flows.

False

Integer programming (IP) models are optimization models in which all of the variables must be integers.

False

Nonlinear optimization problems can have only one local optimal solution.

False

A nonlinear optimization problem is any optimization problem in which at least one term in the objective function or a constraint is nonlinear.

True

In the basic economic order quantity (EOQ) model, the annual ordering cost and the annual holding cost are always equal.

True

Uncertainty about lead time in a probabilistic inventory model adds to the uncertainty about the safety stock required to maintain a service level.

True

Which of the following situations may lead to a higher level of safety stock? a. greater variability in demand b. desire to maintain higher service level c. decreased cost of shortages d. decreased ordering cost e. all of the above

a. greater variability in demand b. desire to maintain higher service level

Which of the following is NOT true regarding the linear programming formulation of a transportation problem? a. Costs appear only in the objective function. b. The constraints' left-hand-side coefficients are either 0 or 1. c. The number of constraints is calculated as number of origins times number of destinations. d. The number of variables is calculated as number of origins times number of destinations.

c. The number of constraints is calculated as number of origins times number of destinations.

The main differences between linear and non-linear optimization includes all of the following except: a. non-linear solvers cannot determine a shadow price b. linear solvers are guaranteed to find an optimal solution c. non-linear problems cannot have linear constraints d. linear problems cannot have non-linear objective functions e. all of the above are true

c. non-linear problems cannot have linear constraints

Which of the following is a reason that motivates a company to carry as little inventory as possible? a. the fixed cost of ordering b. the desire not to run out of products that cusotmers demand c. the lead time to process an order d. interest costs e. all of the above are reasons to minimize the amount of inventory

d. interest costs

For an Economic Order Quantity policy, how would the number of orders per year change if setup cost increased? a. the number would increase in proportion to the square root of cost b. the number would decrease in proportion to the cost c. the number would decrease in proportion to the square root of cost d. the number would decrease in proportion to the inverse of the square root of cost e. the number would increase in proportion to the cost f. the number would not change g. the number would increase in proportion to the inverse of the square root of cost

d. the number would decrease in proportion to the inverse of the square root of cost

When using the GRG algorithm to solve non-linear problems one should try multiple starting points because . a. If two different starting points return the same solution, that solution is optimal. b. the solution returned is always near the starting point. c. a random element of GRG requires multiple starting points. d. the solution returned depends upon the starting point.

d. the solution returned depends upon the starting point.

Modeling a fixed cost problem as an integer linear program requires

using binary variables.

For all routes with positive flows in an optimized transportation problem, the reduced cost will be:

zero