Formative Assessment

In the Erlang loss model, system A has 5 servers and an implied utilization of 125 percent, while system B has 15 servers and an implied utilization of 125 percent. Which of the following statements is true? -System A has the higher utilization because it has fewer servers relative to the potential demand. -The two systems have the same utilization because they have the same implied utilization. -System B has a higher utilization because the fraction of lost demand is lower in that system. -More information is needed to determine which system has the higher utilization.

-System B has a higher utilization because the fraction of lost demand is lower in that system.

Starting in 2018, the United States moved to a territorial system with a corporate tax rate of:

21%

In the Erlang loss model, which of the following most likely increases lost demand? -An increase in the average interarrival time -An increase in the average processing time -An increase in the number of servers -A decrease in implied utilization

An increase in the average processing time

At the Millbrook High School cafeteria, students proceed along a series of stations in a single line: (1) get tray and utensils, (2) choose food, (3) select beverage, (4) pay. The school is concerned that students are taking too long to get their meal. The school has analyzed the capacities of each of the four steps in isolation and found there exists sufficient capacity at each resource in isolation. Which of the following is most likely to be causing the congestion? -The bottleneck is probably at the last station because capacity is reduced the most when the bottleneck is at the end of the process. -The implied utilization of the bottleneck is too low. -Due to variability in processing times, both blocking and starving could be occurring. -The process must be demand-constrained. The stations have similar utilizations.

Due to variability in processing times, both blocking and starving could be occurring.

If capacity exceeds demand, then all flow units are served.

False

In the Erlang loss model, pooling is an effective strategy because it always increases implied utilization.

False

The financial statement of cash flows shows the increases and decreases in cash corresponding to which of the following activities?

Financing Investing Operating

Which of the following most directly expresses the motivation behind the expression "buffer or suffer"?

If there is variability in the arrival process or in processing times, make sure there is sufficient inventory between stages; otherwise, capacity will be reduced.

In the Erlang loss model, which best describes the relationship between implied utilization and utilization? -Implied utilization is always greater than utilization. -Implied utilization is only greater than utilization when implied utilization is greater than 100 percent. -Implied utilization, like utilization, does not exceed 100 percent. - Implied utilization is the same as utilization.

Implied utilization is always greater than utilization

In the Erlang loss model, which of the following is a benefit of reducing the variability of processing times? -The denial of service probability decreases. -The flow rate increases. -Implied utilization increases. -Utilization increases. -All of the choices are correct. None of the choices are correct.

None of the choices are correct.

The denial of service probability decreases if more servers are added and nothing else changes.

True

True or false: There are advantages to holding a reservoir of cash for smaller firms, who may face higher costs to raise funds on short notice.

True

Which of the following items is a current liability on the balance sheet?

accounts payable

When long-term financing more than covers the cumulative capital requirement, the firm has a surplus of _____ available for short-term financing

cash

Net working capital is equal to

current assets minus current liabilities

_________ is the practice of sending demand away from a system when the system can not serve it.

diversion

The predictions made by the Erlang loss model ______ depend on variability in the processing time.

do not

If the firm is a short-term borrower

long-term financing is less than the cumulative capital requirement

Understanding the flow rate of the system helps a manager understand its ______.

revenues

When financial managers forecast future sources and uses of cash they must first create a _____ forecast

sales

The denial of ______ probability is the likelihood that a flow unit is not served.

service

If 100 customers arrive per hour and Pm = 10% then ______ customers are denied service per hour because all the servers are occupied.

ten/ 10