BA-545-001 Test #1 JSU (Dr. Lu)

One dietary supplement in Company D&F costs $30 per bottle. Company D&F's annual holding cost percentage is 40%. What is the annual holding cost per bottle?

$12 per bottle [NOTE: (Cost/unit)(Holding cost %/year) = ($30)(0.40) = $12]

Farmer Jones must determine how many acres of corn and wheat to plant this year. An acre of wheat yields 25 bushels of wheat and requires 10 hours of labor per week. An acre of corn yields 10 bushels of corn and requires 4 hours of labor per week. All wheat can be sold at $4 a bushel, and all corn can be sold at $3 a bushel. Seven acres of land and 40 hours per week of labor are available. Government regulations require that at least 30 bushels of corn be produced during the current year. Let x1 = number of acres of corn planted, and x2 = number of acres of wheat planted. Using these decision variables, formulate an LP whose solution will tell Farmer Jones how to maximize the total revenue from wheat and corn. By using Excel Solver, the obtained maximum revenue is $_____ by planting _____ acres of corn and _____ acres of wheat.

370.0; 3.0; 2.8

Billy Penny is trying to determine how many units of two types of lawn mowers to produce each day. One of these is the Standard model, while the other is the Deluxe model. The profit per unit on the Standard model is $60, while the profit per unit on the Deluxe model is $40. The Standard model requires 20 minutes of assembly time, while the Deluxe model requires 35 minutes of assembly time. The Standard model requires 10 minutes of inspection time, while the Deluxe model requires 15 minutes of the inspection time. The company must fill an order for 6 Deluxe models. There are 450 minutes of assembly time and 180 minutes of inspection time available each day. Billy Penny is to determine the best possible combination of Standard model and Deluxe model to manufacture in order to reach the maximum profit. Formulate this as a linear programming problem and find the solution that gives the maximum profit. By using Excel Solver, the obtained maximum profit is $_____ by producing _____ Standard and _____ Deluxe models.

780.0; 9.0; 6.0

The annual demand for a product 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. Currently, the purchase cost is $40 per unit. Currently, the company is ordering 250 units each time an order is placed. What is the total holding cost for the year using this policy? A) $1,000 B) $400 C) $2,000 D) $1,400

A) $1,000

Consider the following linear program: Maximize 30X + 10Y Subject to: 3X + Y ≤ 300 X + Y ≤ 200 X ≤ 100 Y ≥ 50 X,Y ≥ 0 What is the optimal objective value? (You can use either Excel Solver or Graphical method to solve this problem). A) $3,000 B) $3,200 C) $3,400 D) $3,600

A) $3,000

A furniture company is producing two types of furniture. Product A requires 8 board feet of wood and 2 lbs of wicker. Product B requires 6 board feet of wood and 6 lbs of wicker. There are 2000 board feet of wood available for product and 1000 lbs of wicker. Product A earns a profit margin of $30 a unit and Product B earns a profit margin of $40 a unit. Which of these is an appropriate constraint for Wicker? A) 2A + 6B <= 1000 B) 30A + 40B <= 1000 C) 8A + 2B <= 1000 D) 10A + 12B <= 1000

A) 2A + 6B <= 1000

Which of the following is not acceptable as a constraint in a linear programming problem (maximization)? Constraint 1) X + XY + Y ≥ 12 Constraint 2) X - 2Y ≤ 20 Constraint 3) X + 3Y = 48 Constraint 4) X + Y + Z ≤ 150 A) Constraint 1 B) Constraint 3 C) Constraint 2 D) Constraint 4

A) Constraint 1

As a supervisor of a production department, you must decide the daily production totals of a certain product that has two models, the Deluxe and the Special. The profit on the Deluxe model is $12 per unit and the Special's profit is $10. Each model goes through two phases in the production process, and there are only 100 hours available daily at the construction stage and only 80 hours available at the finishing and inspection stage. Each Deluxe model requires 20 minutes of construction time and 10 minutes of finishing and inspection time. Each Special model requires 15 minutes of construction time and 15 minutes of finishing and inspection time. The company has also decided that the Special model must comprise at least 40 percent of the production total. What is an appropriate objective function? A) Maximize 12D + 10S B) Maximize 100D + 80S C) Maximize 2D + 2.5S D) Maximize 4D + 2.5S

A) Maximize 12D + 10S

How many decision variables and constraints were involved in Dr. Lu's Treehouse project?

Around 5 million decision variables and 6 million constraints

As a supervisor of a production department, you must decide the daily production totals of a certain product that has two models, the Deluxe and the Special. The profit on the Deluxe model is $12 per unit and the Special's profit is $10. Each model goes through two phases in the production process, and there are only 100 hours available daily at the construction stage and only 80 hours available at the finishing and inspection stage. Each Deluxe model requires 20 minutes of construction time and 10 minutes of finishing and inspection time. Each Special model requires 15 minutes of construction time and 15 minutes of finishing and inspection time. The company has also decided that the Special model must comprise at least 40 percent of the production total. What is an appropriate constraint for the finishing time? A) 10D + 15S >= 100 B) 10D + 15S <= 80 C) 15D + 10S >= 100 D) 10D + 15S <= 4800

B) 10D + 15S <= 80

Mark Achin 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 unit per year. What is his economic order quantity in units? A) 200 B) 120 C) 60 D) 100

B) 120

Which of the following terms is interchangeable with quantitative analysis? A) Economics B) Management science C) Statistics D) Financial analysis

B) Management science

Which of the following techniques involves the use of optimization methods to provide new and better ways to operate based on specific business objectives? A) Descriptive analytics B) Prescriptive analytics C) Predictive analytics D) Quantitative analysis

B) Prescriptive analytics

Consider the following linear programming problem: Minimize 20X + 30Y Subject to: 2X + 4Y ≤ 800 6X + 3Y ≥ 300 X, Y ≥ 0 What is the optimum solution to this problem (X,Y)? (You can use either Excel Solver or Graphical method to solve this problem). A) (0,0) B) (0,100) C) (50,0) D) (400,0)

C) (50,0)

As a supervisor of a production department, you must decide the daily production totals of a certain product that has two models, the Deluxe and the Special. The profit on the Deluxe model is $12 per unit and the Special's profit is $10. Each model goes through two phases in the production process, and there are only 100 hours available daily at the construction stage and only 80 hours available at the finishing and inspection stage. Each Deluxe model requires 20 minutes of construction time and 10 minutes of finishing and inspection time. Each Special model requires 15 minutes of construction time and 15 minutes of finishing and inspection time. The company has also decided that the Special model must comprise at least 40 percent of the production total. What is an appropriate constraint for the construction time? A) 20D + 15S >= 100 B) 20D + 15S <= 100 C) 20D + 15S <= 6000 D) 20D + 15S >= 6000

C) 20D + 15 S <= 6000

Which of the following factors is NOT included in carrying cost? A) Spoilage B) Obsolescence C) Inspecting incoming inventory D) Cost of capital

C) Inspecting incoming inventory

A furniture company is producing two types of furniture. Product A requires 8 board feet of wood and 2 lbs of wicker. Product B requires 6 board feet of wood and 6 lbs of wicker. There are 2000 board feet of wood available for product and 1000 lbs of wicker. Product A earns a profit margin of $30 a unit and Product B earns a profit margin of $40 a unit. What should the objective function be? A) Maximize 8A + 2A + 6B + 6B B) Maximize 14Wood + 8Wicker C) Maximize 30A + 40B D) Maximize 10A + 12B

C) Maximize 30A + 40B

Which of the following factors is NOT included in ordering cost? A) Purchasing department overhead costs B) Inspecting incoming inventory C) Obsolescence D) Bill paying

C) Obsolescence

Which of the following is NOT an assumption of LP? A) Divisibility B) Certainty C) Simultaneity D) Proportionality

C) Simultaneity

In making inventory decisions, the purpose of the basic EOQ model is to _____. A) minimize ordering costs B) minimize customer dissatisfaction C) minimize the sum of carrying costs and ordering costs D) minimize carrying costs

C) minimize the sum of carrying costs and ordering costs

Andre Candess manages an office supply store. One product in the store is computer paper. Andre knows that 10,000 boxes will be sold this year at a constant rate throughout the year. The cost of placing an order is $30, while the holding cost is $15 per box per year. If he orders in batches of 500 boxes at a time, what is his annual holding cost? A) $3,000 B) $1,500 C) $4,500 D) $3,750

D) $3,750

Andre Candess manages an office supply store. One product in the store is computer paper. Andre knows that 10,000 boxes will be sold this year at a constant rate throughout the year. The cost of placing an order is $30, while the holding cost is $15 per box per year. If he orders in batches of 500 boxes at a time, what is his annual ordering cost? A) $400 B) $800 C) $200 D) $600

D) $600

Consider the following linear programming problem: Maximize 12X + 10Y Subject to: 4X + 3Y ≤ 480 2X + 3Y ≤ 360 All variables ≥ 0 Which of the following points (X,Y) is feasible? A) (10,120) B) (60,90) C) (120,10) D) (30,100)

D) (30,100)

Which of the following functions is NOT linear? A) Z B) 3X + 4Y + Z - 3 C) 5X + 3Z D) 2X + 5YZ

D) 2X + 5YZ

A furniture company is producing two types of furniture. Product A requires 8 board feet of wood and 2 lbs of wicker. Product B requires 6 board feet of wood and 6 lbs of wicker. There are 2000 board feet of wood available for product and 1000 lbs of wicker. Product A earns a profit margin of $30 a unit and Product B earns a profit margin of $40 a unit. Which of these is an appropriate constraint for Wood? A) 8A + 2B <= 2000 B) 2A + 6B <= 2000 C) 30A + 40B <= 2000 D) 8A + 6B <= 2000

D) 8A + 6B <= 2000

Which of the following is a basic assumption of linear programming? A) Divisibility does not exist, allowing only integer solutions B) Independence exists for the activities C) The condition of uncertainty exists D) Proportionality exists in the objective function and constraints

D) Proportionality exists in the objective function and constraints

Which of the following is NOT a use of inventory? A) The decoupling function B) Quantity discounts C) Irregular supply and demand D) The translucent function

D) The translucent function

A(n) _____ is a representation of reality or a real-life situation. A) analysis B) algorithm C) objective D) model

D) model

Operations research is known as _____. A) the science of numerical analysis B) the science of sensitivity analysis C) the science of modeling D) the science of better

D) the science of better

T/F) If the order quantity is large, the EOQ cost dominates the holding cost.

False

T/F) Descriptive analytics is aimed at forecasting future outcomes based on patterns in the past data.

False (DESCRIPTIVE analytics helps a company measure how it has performed in the past and how it is performing now. PREDICTIVE analytics is aimed at forecasting future outcomes based on patterns in the past data)

T/F) Any linear programming problem can be solved using the graphical solution procedure.

False (Graphical solution to an LP program only works when there are just two decision variables)

T/F) In the term linear programming, the word programming comes from the phrase "computer programming."

False (It comes from the phrase, "modeling and solving a problem mathematically")

T/F) Revenue is calculated by subtracting expenses from profit.

False (PROFIT is calculated by subtracting EXPENSES from REVENUE)

T/F) Purchasing department supplies comprise one of the "carrying cost factors."

False (Purchasing department supplies comprise one of the ORDERING cost factors)

T/F) Salaries and wages for warehouse employees would be categorized as ordering cost factors.

False (Salaries and wages for PURCHASING DEPARTMENT employees would be categorized as ordering cost factors. But salaries and wages for WAREHOUSE employees would be categorized as CARRYING cost factors)

T/F) The two fundamental decisions you must make when controlling inventory are "How much to order?" and "What does it cost?"

False (The two fundamental questions are "How much to order?" and "When to order?")

Who said, "All models are wrong, but some are useful?"

George Box

Where is the Shaolin Temple?

Henan

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

True

T/F) A stockout is a situation that occurs when there is no inventory on hand.

True

T/F) An increase in ordering cost will increase the economic order quantity, holding all other factors constant.

True

T/F) Business analytics is a data-driven approach to decision making that allows companies to make better decisions.

True

T/F) Graph-based data mining techniques can apply in marketing campaigns.

True

T/F) If the order quantity is large, the holding cost dominates the EOQ cost.

True

T/F) In the decoupling function, some inventory may be stored between each production process to act as a buffer.

True

T/F) Inventory is the common thread that ties all the functions and departments of the organization together.

True

T/F) Resource restrictions are called constraints.

True

T/F) Spoilage, theft and obsolescence are all considered to be carrying cost factors.

True

T/F) The concept of inventory is applicable to both manufacturing and service organizations.

True

In the function of SUMPRODUCT, why do we need to put a '$' sign for 'B4:C4' (ie: $B$4:$C$4)?

We need absolute reference for B4:C4