Exam 1

The new owner of a beauty shop is trying to decide whether to hire one, two or thee beauticians l. She estimates that profits next year (in thousands of dollars) will vary with demand for her services and she has estimated demand in three categories, low, medium, and high. Low. Medium. High 1. 40. 80. 90 2. 20. 100. 150 3 -50. 50. 200 If she feels the chances of low, medium, and high demand are 50 percent, 20 percent and 30 percent respectively, what are the expected annual profits for the number of beauticians she will decide to hire? A. $80,000 B. $75,000 C. $135,000 D. $55,000 E. $54,000

$75,000- given these likelihoods, this is the EMV for the best choice.

The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which she could then sell for $6 each. Per unit variable cost would be $3. What would the profit be if she were to produce and sell 5,000 rosebushes? A. $9,000 B. $0 C. $10,000 D. $15,000 E. $30,000

$9,000 total revenue would be $3,000. Total cost (fixed=$6,000, variable= $15,000) would be $21,000

An electrical applicable will not work unless component QK does. Current component QK's reliability is .95. Every other part of the appliance is 100 percent reliable. What would the reliability of the appliance be if an additional backup QK were added with a reliability if .90? A. .95 B. .9975 C. 90 D. .995 E. .9025

.995- the reliability is .95+[(1-.95)*.90]

A local bagel shop produces two products: bagels (B) and croissants (C). Each bagel requires 6 ounces of flour, 1 gram of yeast, and 2 tablespoons of sugar. A croissant requires 3 ounces of flour, 1 gram of yeast, and 4 tablespoons of sugar. The company has 6,600 ounces of flour, 1,400 grams of yeast, and 4,800 tablespoons of sugar available for today's production run. Bagel profits are 25 cents each, and croissant profits are 35 cents each. What is the objective function? A. 0.25C+0.25C B. 0.25B+0.35C C. .35B+.25C D. 35B+25C

0.25B+0.35C

Suppose a three period weighted average is being used to forecast demand. Weights for the periods are as follows: Wt-3= 0.2, Wt-2= 0.3 & Wt-1=0.5. Demand observed in the previous three(3) periods was as follows: At-3=2,200, At-2= 1,950 & At-1= 2,050. What will be the demand forecast for period t? A. 1,980 B. 2,000 C. 2,095 D. 2,050 E. 1,875

2,050 the forecast for will be (.2*2,200)+(.3*1,950)+(.5*2,050)= 2,050

If a line is balanced with 75 percent efficiency, the "balance delay" will be: A. Depends on the next operation B. Unknown, since balance delay is not relation to efficiency C. 80 percent D. 100 percent E. 25 percent

25 percent- efficiency equals 100 percent minus balance delay

A company is designing a product layout for a new product. It olabs to use this production line eight hours a day to meet projected demand of 480 units per day. The tasks necessary to produce this product are: Task. Time. Immediate Predecessor U. 30. None V. 30. U W. 6. U C. 12. W Y. 54. X Z. 30. V,y If the company wants the output rate to be equal yo demand, what i/ the minimum number of workstations needed? A. 6 B. 3 C. 4 D. 5 E. 7

3- per divide the summed tasks times by the minimum necessary cycle time. Round up to find the theoretical minimum

A production line is to be designed for a job with three tasks. The task times are 3.2 minutes, 3.4 minutes and 2.7 minutes. The minimum cycle time in minutes is: A. 3.2 B. 2.7 C. 1 D. 3.4 E. 9.3

3.4 the longest task time equals the minimum cycle

What is the break even quantity for the following situation? FC= $1,400 per week VC= $2 per ynit Rev= $6 per unit A. 100 B. 1,400 C. 600 D. 250 E. 350

350. A volume of 350 units leads to $1,400 in margin to offset fixed costs.

A manager used the following equation to predict monthly receipts: Yt= 40,000+150t. What id the forecast for July if t=0 in April of this year? A. 42,400 B. 42,250 C. 40,600 D. 40,450 E. 42,100

40,450 July would be period 3 so the forecast would be 40,000+150(3)

The production for Fine Coffees Inc. produces two coffee blends: American (A) and British (B). Two of his resources are constrained: Colombia beans, of which he can get at most 399 pounds (4,800 ounces) per week; and Dominican beans, of which he can get at most 200 pounds (3,200 ounces) per week. Each pound of American bean coffee requires 12 ounces of Colombian beans and 4 ounces of Dominican beans, while a pound of British blend coffee uses 8 ounces of each type of bean. Profits for the American blend are $2.00 per pound, and profits for the British blend are $1.00 per pound. Which of the following is not feasible production combination? A. 400 A and 400 B B. 0 A and 400 B C. 200 A and 300 B D. 0 A and 0 B E. 400 A and 0 B

400 A and 400 B- this is not feasible

The production planner for Fine Coffees, Inc., produces two coffee blends: American (A) and British (B). Two of his resources are constrained: Columbia beans, of which he can get at most 300 pounds (4,800 ounces) per week; and Dominican beans, of which he can get at most 200 pounds (3,200 ounces) per week. Each pound of American blend coffee requires 12 ounces of Colombian beans and 4 ounces of Dominican beans, while a pound of British blend coffee uses 8 ounces of each type of bean. Profits for the American blend are $2.00 per pound, and profits are the British blend are $1.00 per pound. What is Dominican bean constraint? A. 4A+8B <= 3,200 B. 12A+8B <= 4,800 C. 8A+4B <= 3,200 D. 12A+8A <= 3,300

4A+8B <= 3,200

The owner of a greenhouse and nursery is considering whether to send $6,000 to acquire the licensing rights to grow a new variety of rosebush, which ehe could then sell for $6 each. Per unit variable cost would be $3. How many rosebushes would she have to produce and sell in order to make a profit of $9,000? A. 4,000 B. 6,000 C. 5,000 D. 1,000 E. 3,000

5,000 add the desired profit of $9,000 to the fixed cost, then divide the sum by the per unit contribution margin.

The logistics/operations manager of a mail order house purchases two products for resale: king beds(K) and queen beds (Q). Esch king bed costs $600 and requires 159 cubic feet of storage space, and each queen bed costs $400 and requires 90 cubic feet of storage space. The manager has $100,000 to invest in beds this week and her warehouse has 20,000 cubic feet available for storage. Profit for each king bed is $500 and for each queen bed is $250. What is the objective function? A. 500Q+250K B. 500K+250Q C. 600K+400Q D. 400K+600Q

500K+250Q

Given an actual demand of 59, a previous forecast of 64, and an alpha of .3, what would the forecast for the next period be using simple exponential smoothing? A. 62.5 B. 36.9 C. 57.5 D. 65.5 E. 60.5

62.5- multiply the previous periods forecast error (-5) by alpha and then add to previous periods forecast.

The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. He figures it will cost an additional $100 per cord to purchase and split wood with his machine while he can sell each cord of split wood for $125. If for this machine design capacity is 60 cord per day, effective capacity is 50 cord per day, and actual output is anticipated to be 49 cords per day, what would be its utilization? Round your answer to closest 2 decimal places. A. 83 percent B. 0 percent C. 75 percent D. 67 percent E. 100 percent

67 percent divide actual output by design capacity

Given the following historical data, what is the simple three period moving average forecast for period 6? Period Value 1 73 2 68 3 65 4 72 5 67 A. 68.67 B. 115 C. 67 D. 69 E. 68

68- average demand from periods 3-5

Drone sales for a New York based firm over the last 4 years are depicted in the table below: Week Unit Sales 1. 700 2. 724 3. 720 4. 728 What is the equation of the trend line and the predicted sales for week 6? A. 734+10t and 774 B. 698+8t and 746 C. 718+10t and 798 D. 730+8t and 778

698+8t and 746

Given the following information, what would efficiency be? Effective capacity= 80 units per day Design capacity= 100 units per day Utilization= 68 percent A. 78 percent B. 65 percent C. 85 percent D. 75 percent E. 68 percent

85 percent If utilization is 68 percent then actual output must have been 68 units

Suppose a given control unit fails, on average 10,000 hours. It takes an average of 700 hours to repair and reboot this unit. The repair/reboot procedures for this unit are being reconfigured. By how much would average repair/reboot time need to be reduced to increase availability by 5 percent (assuming the control unit's average life remains unchanged)? A. More than 600 hours but not more than 700 hours B. More than 400 hours but not more than 500 hours C. More than 700 hours D. More than 500 hours but not more than 600 hours E. Not more than 400 hours

A 5 percent improvement in availability would result in availability being approximately 98.5 percent. To achieve such availability assuming MTBF remains unchanged would mean MTTR would have to be reduced by approximately 544 hour.

Efficiency is defined as the ration of: A. Design capacity to effective capacity. B. Effective capacity ti actual output C. Actual output to design capacity D. Design capacity to actual output E. Actual output to effective capacity.

Actual output to effective capacity. Efficiency measures the usage of effective capacity

A system consists of two components, each of which must activate if the system is to activate. One component has the reliability of .99. The other has a reliability of .97. The components are independent of one another with respect to reliability. What is the overall system reliability? A. Approximately .90 B. Approximately .99 C. Cannot be determined with this information D. Approximately .96 E. Approximately.94

Approximately.96- the system reliability is the product of the two component reliabilities.

Excel Solver does not allow for the inclusion of greater than or equal to, less than or equal nomenclature as Excel will not recognize these. T/F

False

Excel Solver is the only method that one can utilize for automated linear programming solutions. T/F

False

LP problems must have multiple goals or objectives specified. T/F

False - an LP problem must have a single objection function.

MAD is equal to the square root of MSE, which is why we calculate the easier MSE and then calculate the more difficult MAD. T/F

False MAD is the mean absolute deviation

The percentage of idle time in an assembly line is called cycle rate. T/F

False this is called balance day

Utilization is defined as the ratio of effective capacity to design capacity. T/F

False utilization is the ratio of output to design capacity

The Laplace approach involves choosing the alternative with the highest payoff. T/F

False- Laplace involves choosing the option with the best average

The maximax approach is a strategy for the risk adverse. T/F

False- maximax is a risk taker strategy.

Given the following data for make or buy decision: Alternative. FC. VC Buy $0 per year. $8 per unit Make. $100,00. $4 For what range of output would you prefer to make? A. More than 100,00 B. More than 25,000 C. More than 50,000 D. More than 10,000

More than 25,000

Consider the following scenario: Small. Large Buy. 30. 60 Rent. 50. 80 Lease. 20. 60 *PV for profits represented in ($000) If p(high) is .60, the choice for maximum expected value would be: A. Rent B. Lease C. Low D. High E. Buy

Rent- given this likelihood, rent's EMV would be best

Consider the following decision scenario: Small. Large Buy. 30. 60 Rent. 50. 80 Lease. 20. 60 *PV for profits represented in ($000) The maximax strategy would be: A. Low B. Buy C. Rent D. Lease E. High

Rent- rent had the bedt payoff scenario

The time between failures for an electrical appliance is exponentially distributed with a mean of 40 months. What is the probability that the next failure will not occur before 4 years have elapsed? Hint: convert years to months. A. In excess of .6 B. Not in excess of .2 C. In excess of .3 but jot in excess of .4 D. In excess of .2 but jot in excess of .3 E. In excess of .4 but not in excess of .6

T/MTBF is 1.2. From the chart, the reliability is 0.3012

At break-even point: A. Variable cost equals fixed cost B. Total cost equals total revenue C. Output equals capacity D. Total cost equals profit E. Variable cost equals total revenue

Total cost equals total revenue- at the break even point total profit (total revenue minus total cost) is zero.

An advantage of a weighted moving average is that recent actual results can be given more importance than what occurred a while ago. T/F

True a weighted moving averages can be adjusted to make more recent data more important in setting the forecast

An idle percentage of zero means a line is perfectly balanced. T/F

True all workstations would be occupied 100 percent of the time

The capacity refers to the maximum quantity an operating unit can process over a given period of time. T/F

True an operation's capacity is defined as the maximum rate if output possible

Reliability is the probability that a product or system will function when activated. T/F

True- the higher the probability, the more reliable the product or system.