Question 1

Each point on the efficient frontier is the maximum possible risk,measured by portfolio variance,for the given return.

Accepted Answer

A) True 
 B)False

Question 2

It is common that components that are referred to as pooled

Accepted Answer

A) are shared by two or more customers. 
B) have common ingredients. 
C) share a storage facility or storage tank. 
D) are interchangeable. 
A) are shared by two or more customers. 
B) have common ingredients. 
C) share a storage facility or storage tank. 
D) are interchangeable.

Question 3

If the coefficient of each squared term in a quadratic function is positive,the function is

Accepted Answer

A) concave. 
B) convex. 
C) elliptical. 
D) sinusoidal. 
A) concave. 
B) convex. 
C) elliptical. 
D) sinusoidal.

Question 4

For a minimization problem,a point is a global minimum if there are no other feasible points with a smaller objective function value.

Accepted Answer

A) True 
 B)False

Question 5

Pacific-Gulf Oil Company is faced with the problem of refining three petroleum components into regular and premium gasoline in order to maximize profit.Components 1 and 2 are pooled in a single storage tank,and component 3 has its own storage tank.Regular and premium gasolines are made from blending the pooled components and component 3.Prices per gallon for the two products and three components,as well as product specifications,are listed below.   ​   ​
The maximum number of gallons available for each of the three components is 4000,8000,and 8000,respectively.Formulate a nonlinear program to determine: (1)what percentages of components 1 and 2 should be used in the pooled mixture and (2)how to make regular and premium gasoline by blending the mixture of components 1 and 2 from the pooling tank with component 3.

Accepted Answer

y₁ = gallons of component 1 in the poolin

Question 6

The Bass model is used to forecast the adoption of a new product.Which of the following is NOT a parameter of this Bass model?

Accepted Answer

A) coefficient of innovation 
B) coefficient of interaction 
C) coefficient of imitation 
D) estimated pool of current adopters 
A) coefficient of innovation 
B) coefficient of interaction 
C) coefficient of imitation 
D) estimated pool of current adopters

Question 7

It is possible for the optimal solution to a nonlinear optimization problem to lie in the interior of the feasible region.

Accepted Answer

A) True 
 B)False

Question 8

Native Customs sells two popular styles of hand-sewn footwear: a sandal and a moccasin.The cost to make a pair of sandals is $18,and the cost to make a pair of moccasins is $24.The demand for these two items is sensitive to the price,and historical data indicate that the monthly demands are given by S = 400 − 10P1 and M = 450 − 15P2,where S = demand for sandals (in pairs),M = demand for moccasins (in pairs),P1 = price for a pair of sandals,and P2 = price for a pair of moccasins.To remain competitive,Native Customs must limit the price (per pair)to no more than $60 and $75 for its sandals and moccasins,respectively.Formulate this nonlinear programming problem to find the optimal production quantities and prices for sandals and moccasins that maximize total monthly profit.

Accepted Answer

Question 9

In the Bass model for forecasting the adoption of a new product,the objective function

Accepted Answer

A) minimizes the sum of forecast errors. 
B) minimizes the sum of squared forecast errors. 
C) maximizes the number of adoptions. 
D) maximizes the number of adoptions and imitations. 
A) minimizes the sum of forecast errors. 
B) minimizes the sum of squared forecast errors. 
C) maximizes the number of adoptions. 
D) maximizes the number of adoptions and imitations.

Question 10

Skooter's Skateboards produces two models of skateboards,the FX and the ZX.Skateboard revenue (in $l000s)for the firm is nonlinear and is stated as (number of FXs)(5 − 0.2 number of FXs)+ (number of ZXs)(7 − 0.3 number of ZXs).Skooter's has 80 labor-hours available per week in its paint shop.Each FX requires two labor-hours to paint,and each ZX requires three labor-hours.Formulate this nonlinear production planning problem to determine how many FX and ZX skateboards should be produced per week at Scooter's.

Accepted Answer

FX = number of FX skateboards

Question 11

The key idea behind constructing an index fund is to choose a portfolio of securities that

Accepted Answer

A) is a mix of growth- and income-oriented stocks. 
B) minimizes risk without sacrificing liquidity. 
C) mimics the performance of a broad market index. 
D) balances short- and long-term investments. 
A) is a mix of growth- and income-oriented stocks. 
B) minimizes risk without sacrificing liquidity. 
C) mimics the performance of a broad market index. 
D) balances short- and long-term investments.

Question 12

Functions that are convex have a single local maximum that is also the global maximum.

Accepted Answer

A) True 
 B)False

Question 13

The measure of risk most often associated with the Markowitz portfolio model is the portfolio

Accepted Answer

A) average return. 
B) minimum return. 
C) variance. 
D) standard deviation. 
A) average return. 
B) minimum return. 
C) variance. 
D) standard deviation.

Question 14

The problem of maximizing a concave quadratic function over a linear constraint set is relatively difficult to solve.

Accepted Answer

A) True 
 B)False

Question 15

When the number of blending components exceeds the number of storage facilities,the number of feasible solutions to the blending problem is

Accepted Answer

A) reduced. 
B) increased. 
C) unchanged. 
D) zero. 
A) reduced. 
B) increased. 
C) unchanged. 
D) zero.

Question 16

An investor can pick the mean-variance tradeoff that he or she is most comfortable with by looking at a graph of the

Accepted Answer

A) feasible region. 
B) pooled components. 
C) rolling horizon. 
D) efficient frontier. 
A) feasible region. 
B) pooled components. 
C) rolling horizon. 
D) efficient frontier.

Question 17

Because most nonlinear optimization codes will terminate with a local optimum,the solution returned by the codes will be the best solution.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is incorrect?

Accepted Answer

A) A global optimum is a local optimum in a nonlinear optimization problem. 
B) A local maximum is a global maximum in a concave nonlinear optimization problem. 
C) A global minimum is a local minimum in a convex nonlinear optimization problem. 
D) A local optimum is a global optimum in a nonlinear optimization problem. 
A) A global optimum is a local optimum in a nonlinear optimization problem. 
B) A local maximum is a global maximum in a concave nonlinear optimization problem. 
C) A global minimum is a local minimum in a convex nonlinear optimization problem. 
D) A local optimum is a global optimum in a nonlinear optimization problem.

Question 19

Many linear programming algorithms such as the simplex method optimize by examining only the extreme points and selecting the extreme point that gives the best solution value.

Accepted Answer

A) True 
 B)False

Question 20

Nonlinear optimization problems can have only one local optimal solution.

Accepted Answer

A) True 
 B)False

Each point on the efficient frontier is the maximum possible risk,measured by portfolio variance,for the given return.

It is common that components that are referred to as pooled

If the coefficient of each squared term in a quadratic function is positive,the function is

For a minimization problem,a point is a global minimum if there are no other feasible points with a smaller objective function value.

The Bass model is used to forecast the adoption of a new product.Which of the following is NOT a parameter of this Bass model?

It is possible for the optimal solution to a nonlinear optimization problem to lie in the interior of the feasible region.

In the Bass model for forecasting the adoption of a new product,the objective function

The key idea behind constructing an index fund is to choose a portfolio of securities that

Functions that are convex have a single local maximum that is also the global maximum.

The measure of risk most often associated with the Markowitz portfolio model is the portfolio

The problem of maximizing a concave quadratic function over a linear constraint set is relatively difficult to solve.

When the number of blending components exceeds the number of storage facilities,the number of feasible solutions to the blending problem is

An investor can pick the mean-variance tradeoff that he or she is most comfortable with by looking at a graph of the

Because most nonlinear optimization codes will terminate with a local optimum,the solution returned by the codes will be the best solution.

Which of the following statements is incorrect?

Many linear programming algorithms such as the simplex method optimize by examining only the extreme points and selecting the extreme point that gives the best solution value.

Nonlinear optimization problems can have only one local optimal solution.

Introduction

An Introduction to Linear Programming

Linear Programming: Sensitivity Analysis and Interpretation of Solution

Linear Programming Applications in Marketing, finance, and OM

Advanced Linear Programming Applications

Distribution and Network Models

Integer Linear Programming

Project Scheduling: Pertcpm

Inventory Models

Waiting Line Models

Simulation

Decision Analysis

Multicriteria Decisions

Time Series Analysis and Forecasting

Markov Processes

Linear Programming: Simplex Method

Simplex-Based Sensitivity Analysis and Duality

Solution Procedures for Transportation and Assignment Problems

Minimal Spanning Tree

Dynamic Programming

Filters

Exam 8: Nonlinear Optimization Models

Each point on the efficient frontier is the maximum possible risk,measured by portfolio variance,for the given return.

It is common that components that are referred to as pooled

If the coefficient of each squared term in a quadratic function is positive,the function is

For a minimization problem,a point is a global minimum if there are no other feasible points with a smaller objective function value.

The Bass model is used to forecast the adoption of a new product.Which of the following is NOT a parameter of this Bass model?

It is possible for the optimal solution to a nonlinear optimization problem to lie in the interior of the feasible region.

In the Bass model for forecasting the adoption of a new product,the objective function

The key idea behind constructing an index fund is to choose a portfolio of securities that

Functions that are convex have a single local maximum that is also the global maximum.

The measure of risk most often associated with the Markowitz portfolio model is the portfolio

The problem of maximizing a concave quadratic function over a linear constraint set is relatively difficult to solve.

When the number of blending components exceeds the number of storage facilities,the number of feasible solutions to the blending problem is

An investor can pick the mean-variance tradeoff that he or she is most comfortable with by looking at a graph of the

Because most nonlinear optimization codes will terminate with a local optimum,the solution returned by the codes will be the best solution.

Which of the following statements is incorrect?

Many linear programming algorithms such as the simplex method optimize by examining only the extreme points and selecting the extreme point that gives the best solution value.

Nonlinear optimization problems can have only one local optimal solution.

Introduction

An Introduction to Linear Programming

Linear Programming: Sensitivity Analysis and Interpretation of Solution

Linear Programming Applications in Marketing, finance, and OM

Advanced Linear Programming Applications

Distribution and Network Models

Integer Linear Programming

Project Scheduling: Pertcpm

Inventory Models

Waiting Line Models

Simulation

Decision Analysis

Multicriteria Decisions

Time Series Analysis and Forecasting

Markov Processes

Linear Programming: Simplex Method

Simplex-Based Sensitivity Analysis and Duality

Solution Procedures for Transportation and Assignment Problems

Minimal Spanning Tree

Dynamic Programming

Filters