Questions and Answers of Quantitative Analysis For Management

Why is the annual purchase (material) cost not considered to be a relevant inventory cost if the EOQ assumptions are met?a. This cost will be zero.b. This cost is constant and not affected by the
A JIT system will usually result ina. a low annual holding cost.b. very few orders per year.c. frequent shutdowns in an assembly line.d. high levels of safety stock.
Manufacturers use MRP whena. the demand for one product is dependent on the demand for other products.b. the demand for each product is independent of the demand for other products.c. demand is
In using marginal analysis, an additional unit should be stocked ifa. MP = ML.b. the probability of selling that unit is greater than or equal to MP/1MP + ML2.c. the probability of selling that unit
In using marginal analysis with the normal distribution, if marginal profit is less than marginal loss, we expect the optimal stocking quantity to bea. greater than the standard deviation.b. less
The inventory position is defined asa. the amount of inventory needed to meet the demand during the lead time.b. the amount of inventory on hand.c. the amount of inventory on order.d. the total of
Give a working definition of inventory and its purposes.
What is the purpose of decoupling?
What is EOQ (economic order quantity)?
List and explain the main assumption of the economic order quantity.
What is the annual ordering cost?
Martin-Pullin Bicycle Corp. (MPBC), located in Dallas, is a wholesale distributor of bicycles and bicycle parts. Formed in 1981 by cousins Ray Martin and Jim Pullin, the firm’s primary retail
Linear programming problems are solved the fastest by the isoprofit line method. How does it work?a. It determines constraints.b. It defines variable.c. It finds an optimal solution.d. None of the
All problems of LP seek to maximize or minimize some quantity, usually profit or cost.a. Trueb. False
An LP problem has a bounded feasible region. If this problem has an equality 1=2 constraint, thena. this must be a minimization problem.b. the feasible region must consist of a line segment.c. the
Which of the following would cause a change in the feasible region?a. Increasing an objective function coefficient in a maximization problemb. Adding a redundant constraintc. Changing the right-hand
If a nonredundant constraint is removed from an LP problem, thena. the feasible region will get larger.b. the feasible region will get smaller.c. the problem would become nonlinear.d. the problem
In the optimal solution to a linear program, there are 20 units of slack for a constraint. From this we know thata. the dual price for this constraint is 20.b. the dual price for this constraint is
What is the essential condition for using the graphical method?a. negative variablesb. integer variablesc. only two decision variablesd. more than three variables
In LP, numbers in the objective and constraints are always known and do not change during the period being studied. This assumption is calleda. proportionality.b. additivity.c. divisibility.d.
In LP, variables do not have to be integer valued and may take on any fractional value. This assumption is calleda. proportionality.b. divisibility.c. additivity.d. certainty.
In solving a linear program, no feasible solution exists.To resolve this problem we mighta. add another variable.b. add another constraint.c. remove or relax a constraint.d. try a different computer
If the feasible region gets larger due to a change in one of the constraints, the optimal value of the objective functiona. must increase or remain the same for a maximization problem.b. must
When alternate optimal solutions exist in an LP problem, thena. the objective function will be parallel to one of the constraints.b. one of the constraints will be redundant.c. two constraints will
If a linear program is unbounded, the problem probably has not been formulated correctly. Which of the following would most likely cause this?a. A constraint was inadvertently omitted.b. An
An unfeasible solution to an LP problem solved by a graphical methoda. satisfies all of the problem’s constraints simultaneously.b. satisfies all of the constraints.c. is a corner point of the
Explain what the constraints represent, and why they have to be carefully considered when determining the objective function in an LP problem.
Enounce all the assumptions required for formulating a linear programming problem. You should be able to mention and synthetically describe at least seven of them.
Among the assumptions for the formulation of an LP problem, there is linearity. What does it mean in practice, and why it is important?
The product mix problem is one of the most common LP applications. In what does it consist?
Explain the limitation in the use of graphical solution for an LP problem. What are its advantages, even when its specific application is not suitable?
Ron Garcia felt good about his first week as a management trainee at Mexicana Wire Winding, Inc. He had not yet developed any technical knowledge about the manufacturing process, but he had toured
It is often said that linear programming is not the most suitable tool for addressing business management problems.a. Trueb. False
LP has application in many fields. The planning of consumer surveys can be a tool in the area ofa. operation analysis.b. media optimisation.c. portfolio risk assessment.d. marketing research.e. none
Using LP to determine the most economical and effective nutritional programme for patients is an application known asa. the transportation problem.b. the product mix.c. the diet problem.d. the
When applying LP to diet problems, the objective function is usually designed toa. maximize profits from blends of nutrients.b. maximize ingredient blends.c. minimize production losses.d. maximize
Data envelopment analysis (DEA) isa. an application of LP.b. a way to measure efficiency in similar operating units.c. used to assess performance of nonprofit entities.d. all of the above.
LP sometimes uses case studies, examples, or tools in specific disciplines. For example, the blending problem is:a. including the diet problem.b. used when mixing resources to produce one or more
With the company expanding into several new markets in the coming months, Cable & Moore was anticipating a large increase in sales revenue. The future looked bright for this provider of
In a transportation problem with an equal number of 4 sources and destinations, the resulting LP will havea. 4 variables/4 constraints.b. 8 variables/8 constraints.c. 16 variables/8 constraints.d. 8
In which way can an assignment problem be defined?a. a special case of a transportation problemb. a problem where all variables are either 0 or 1c. a problem where all RHS values are equal to 1d. all
A company is considering opening one new production facility, and three locations are being considered. For this facility location problem, how many transportation models must be developed and
Four cranes are being assigned to five construction jobs. One of the jobs will be delayed until one of the cranes becomes available after finishing the first job.An assignment model will be used. To
Which type of network model finds the maximum flow of any quantity or substance passing through at a given moment?a. the shortest-route modelb. the maximal-flow modelc. the transhipment modeld. the
Assigning staff to a fast-food restaurant is an example ofa. the shortest-route model.b. the assignment model.c. the maximal-flow model.d. the transportation model.
A large city is planning for the Olympic Games which will be coming in a few years. The transportation system is being evaluated to determine what expansion is needed to handle the large number of
Which type of network model determines the path connecting all the points while minimizing total distance? This model is often used for finding the best way to connect nodes in order to optimize
In facility location problems, how many transportation models need to be developed to determine the best location of a new production facility?
In assignment problems, why are variables always 0 or 1?
If a transportation problem has nine variables, how many sources are being considered?
Describe a business operation problem that can be modelled as a transhipment problem.
If all of the decision variables require integer solutions, the problem isa. a pure integer programming type of problem.b. a simplex method type of problem.c. a mixed-integer programming type of
Which of the following factors apply in a goal programming problem?a. All variables are required to have integer values.b. Some of the variables are required to have integer values.c. More than one
A model containing a linear objective function and linear constraints but requiring that one or more of the decision variables take on an integer value in the final solution is calleda. an integer
An integer programming model is one that has constraints and an objective function identical to that formulated by any LP.a. Trueb. False
Listing all feasible solutions and selecting the best objective function value is called enumeration.a. Trueb. False
One common use of 0–1 variable problems is limiting the number of projects or items that are selected from a group.a. Trueb. False
Goal linear programming is an extension of an LP that aims to optimise, instead of satisfying, what is stated in the objective function.a. Trueb. False
The fixed-charge problem is typically classified asa. a goal programming problem.b. a 0–1 integer problem.c. a quadratic programming problem.d. an assignment problem.
The 0–1 integer programming problema. requires the decision variables to have values between 0 and 1.b. requires that the constraints all have coefficients between 0 and 1.c. requires that the
Goal programminga. requires only that you know whether the goal is direct profit maximization or cost minimization.b. allows you to have multiple goals.c. is an algorithm with the goal of a quicker
Nonlinear programming includes problemsa. in which the objective function is linear but some constraints are not linear.b. in which the constraints are linear but the objective function is not
When do managers have to adopt goal programming instead of using LP?
How many types of integer programming problems are there? Enumerate and explain their importance.
Enumeration is a method sometimes used in integer LP. So why is it generally considered unfeasible and often impossible to solve integer programming problems?
An integer programming solution can never be better than the solution to the same LP problem. Why?
What is the main difference between goal programming and traditional LP problems?
Lei Bing must travel from her hometown to Denver to see her friend Austin. Given the road map of Figure M2.13, what route will minimize the distance that Lei travels? FIGURE M2.13 (for Problem
For avid birdwatchers, the elusive yellow bellied sapsucker is often hard to spot. Scientists at the American Birding Association have determined that there is a higher likelihood of spotting a
Monisha Black’s family owns five parcels of farmland, referred to as the southeast sector, north sector, northwest sector, west sector, and southwest sector. Monisha is involved primarily in
Ji-Hun Li sells CDs that contain 25 software packages that perform a variety of financial functions, including net present value, internal rate of return, and other financial programs typically used
EOM Enterprises owns and operates a small bakery on North Sprigg Street in Cape Girardeau, Missouri. One of their most popular items is Redhawk Rolls, which are baked every Sunday afternoon. Online
Tanaka Construction would like to determine the least expensive way of connecting houses it is building with cable TV. It has identified 11 possible branches or routes that could be used to connect
Morgan Arthur has spent the past few weeks determining inventory costs for Armstrong, a toy manufacturer located near Cincinnati, Ohio. Morgan knows that annual demand will be 30,000 units per year
The University of South Taiwan has had steady enrollments over the past 5 years. The school has its own bookstore, called University Book Store, but there are also three private bookstores in town:
Griffin is studying the length of a particular capacitated queue on the factory floor of Blackhurst Enterprises. He samples the data and makes point estimates of the proportions of going from a
Dileep Tomar receives 5,000 tripods annually from Quality Suppliers to meet the annual demand. Dileep runs a large photographic outlet, and the tripods are used primarily with 35-mm cameras. The
Amir Saber, manager of the Winter Park Hotel, is considering how to restructure the front desk to reach an optimum level of staff efficiency and guest service. At present, the hotel has five clerks
Rithisak Cahnman is the proud owner of a 1955 sports car. On any given day, Rithisak never knows whether the car will start. Ninety percent of the time it will start if it started the previous
The hit Broadway musical Jefferson is playing at the Richard Rodgers Theatre. Its producers have determined that if it is sold out on any one night, then there is a 96% chance that it will be sold
Explain the difference between c-charts and p-charts.
Gustave Lyon is about to buy a compact MP3 player and is currently considering three brands—Sun, Hitek, and Surgo. The important factors to Gustave are the price, color, warranty, size of the unit,
What is a two-person, zero-sum game?
Explain what the Zj value indicates in the simplex tableau.
Explain what the Cj - Zj value indicates in the simplex tableau.
What is the purpose of business analytics?
Southwestern University (SWU), a large state college in Stephenville, Texas, 30 miles southwest of the Dallas/Fort Worth metroplex, enrolls close to 20,000 students. The school is the dominant force
Dape Corporation on East Pythian Street near the Copper Tennis Complex in Springfield, Missouri, is considering three different options for a brick-andmortar location for its very successful online
Right across from the embassies of the Philippines and Peru on the 1600 block of Massachusetts Avenue, NW, in Washington, D.C., Brobeson Technologies is in the process of designing durable magnesium
Annual rainfall plays an important role in corn agriculture. The drought of 2011 literally affected corn prices for years. Given the following data, build a model and predict the harvest for 2023
JVB Electric is an energy company headquartered in the college town of Iowa City, Iowa. JVB operates several compressed air energy storage (CAES) devices next to their colossal wind farm that
Average fuel economy in miles per gallon (MPG) for cars and light trucks has been steadily increasing since about 2004.5 Use the data below to predict average MPG for cars and light trucks in the
The following table gives the average monthly exchange rate between the U.S. dollar and the euro for 2018. It shows that 1 euro was equivalent to 1.22 U.S. dollars in January 2018. Develop a trend
OzDe Distributing, located on Kuhl Road in Erie, Pennsylvania, manages the inventory at all of the retail stores it delivers to. One of the decisions that is made at each of the 21 stores is how much
Goodman Enterprises, located on McCulloch Road in Orlando, Florida, sells officially licensed university T-shirts. The management at Goodman has been tracking sales of their “We Are . . . ”
Hall’s Golf Shop on East Lane Avenue in Columbus, Ohio, specializes in custom fitting woods and irons to best suit a player’s swing and stature. If the number of fittings per week follows a
Across from the Short Stop gas station on Marshbanks Street in Buies Creek, North Carolina, Mostashari Food Distribution (MFD) operates a food delivery service covering the Carolinas and southern
What is a time-series forecasting model?
Sloan Trucking, Inc., headquartered on Mammoth Road in Lowell, Massachusetts, needs to replace its small fleet of new delivery vans. The management at Sloan has narrowed the options down to just two.
Kesia D’Ann (see Problem 1-18) has become concerned that sales may fall, as the team is on a terrible losing streak and attendance has fallen off. In fact, Kesia believes that only 500 programs

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