1. Binary integer programming can be used for:

		A. capital budgeting.
		B. site selection.
		C. scheduling asset divestitures.
		D. assignments of routes.
		E. All of the choices are correct.

2. A firm has prepared the following binary integer program to evaluate a number of potential locations for new warehouses. The firm's goal is to maximize the net present value of their decision while not spending more than their currently available capital.

Max 20x1 + 30x2 + 10x3 + 15x4

s.t. 5x1 + 7x2 + 12x3 + 11x4 21 {Constraint 1}

x1 + x2 + x3 + x4 2 {Constraint 2}

x1 + x2 1 {Constraint 3}

x1 + x3 1 {Constraint 4}

x2 = x4 {Constraint 5}

Which of the constraints enforces a mutually exclusive relationship?

		Constraint 1
		Constraint 2
		Constraint 3
		Constraint 4
		Constraint 5

3. In a BIP problem, 1 corresponds to a yes decision and 0 to a no decision. If project A can be undertaken only if project B is also undertaken then the following constraint needs to be added to the formulation:

		A + B 1
		A + B = 1
		A B
		B A
		None of the choices is correct.

4. A manufacturer has the capability to produce both chairs and tables. Both products use the same materials (wood, nails and paint) and both have a setup cost ($100 for chairs, $200 for tables). The firm earns a profit of $20 per chair and $65 per table and can sell as many of each as it can produce. The daily supply of wood, nails and paint is limited. To manage the decision-making process, an analyst has formulated the following linear programming model:

Max 20x1 + 65x2 100y1 200y2

s.t. 5x1 + 10x2 100 {Constraint 1}

20x1 + 50x2 250 {Constraint 2}

1x1 + 1.5x2 10 {Constraint 3}

My1 x1 {Constraint 4}

My2 x2 {Constraint 5}

Which of the following would be a reasonable value for the variable "M"?

		100
		10
		1
		.1
		.01

5. In a BIP problem with 3 mutually exclusive alternatives, x1, x2, and x3, the following constraint needs to be added to the formulation:

		x1 + x2 + x3 1
		x1 + x2 + x3 = 1
		x1 x2 x3 1
		x1 x2 x3 = 1
		None of the choices is correct.

6. A firm has prepared the following binary integer program to evaluate a number of potential new capital projects. The firm's goal is to maximize the net present value of their decision while not spending more than their currently available capital.

Max 20x1 + 30x2 + 10x3 + 15x4

1. s.t. 5x1 + 7x2 + 12x3 + 11x4 21 {Constraint 1}

2. x1 + x2 + x3 + x4 2 {Constraint 2}

3. x1 + x2 1 {Constraint 3}

4. x1 + x3 1 {Constraint 4}

5. x2 = x4 {Constraint 5}

7. Customers arrive at a video rental desk at the rate of one per minute (exponential interarrival times). Each server can handle 0.4 customers per minute (exponential service times). What is the minimum number of servers needed to achieve an average time in the system of less than three minutes?

		2
		3
		4
		5
		6

8. It is always necessary to test the validity of a simulation model by comparing its results with those of an analytic study.

1. True <-

2. False