Deck 1: Introduction

Question 1

The process of decision making is more limited than that of problem solving.

Answer 1

True

Question 2

Problem definition

A)includes specific objectives and operating constraints.
B)must occur prior to the quantitative analysis process.
C)must involve the analyst and the user of the results.
D)each of the above is true.

Answer 2

D

Question 3

The terms 'stochastic' and 'deterministic' have the same meaning in quantitative analysis.

Answer 3

False

Question 4

The quantitative analysis approach requires

A)the manager's prior experience with a similar problem.
B)a relatively uncomplicated problem.
C)mathematical expressions for the relationships.
D)each of the above is true.

Question 5

In a multicriteria decision problem

A)it is impossible to select a single decision alternative.
B)the decision maker must evaluate each alternative with respect to each criterion.
C)successive decisions must be made over time.
D)each of the above is true.

Question 6

Inputs to a quantitative model

A)are a trivial part of the problem solving process.
B)are uncertain for a stochastic model.
C)are uncontrollable for the decision variables.
D)must all be deterministic if the problem is to have a solution.

Question 7

Identification and definition of a problem

A)cannot be done until alternatives are proposed.
B)is the first step of decision making.
C)is the final step of problem solving.
D)requires consideration of multiple criteria.

Question 8

George Dantzig is important in the history of management science because he developed

A)the scientific management revolution.
B)World War II operations research teams.
C)the simplex method for linear programming.
D)powerful digital computers.

Question 9

Problem solving encompasses both the identification of a problem and the action to resolve it.

Question 10

Management science and operations research both involve

A)qualitative managerial skills.
B)quantitative approaches to decision making.
C)operational management skills.
D)scientific research as opposed to applications.

Question 11

The field of management science

A)concentrates on the use of quantitative methods to assist in decision making.
B)approaches decision making rationally, with techniques based on the scientific method.
C)is another name for decision science and for operations research.
D)each of the above is true.

Question 12

Decision criteria

A)are the choices faced by the decision maker.
B)are the problems faced by the decision maker.
C)are the ways to evaluate the choices faced by the decision maker.
D)must be unique for a problem.

Question 13

The volume that results in marginal revenue equaling marginal cost is called the break-even point.

Question 14

Decision alternatives

A)should be identified before decision criteria are established.
B)are limited to quantitative solutions
C)are evaluated as a part of the problem definition stage.
D)are best generated by brain-storming.

Question 15

A physical model that does not have the same physical appearance as the object being modeled is

A)an analog model.
B)an iconic model.
C)a mathematical model.
D)a qualitative model.

Question 16

When the value of the output cannot be determined even if the value of the controllable input is known, the model is

A)analog.
B)digital.
C)stochastic.
D)deterministic.

Question 17

The volume that results in total revenue being equal to total cost is the

A)break-even point.
B)marginal volume.
C)marginal cost.
D)profit mix.

Question 18

The first step in problem solving is

A)determination of the correct analytical solution procedure.
B)definition of decision variables.
C)the identification of a difference between the actual and desired state of affairs.
D)implementation.

Question 19

A model that uses a system of symbols to represent a problem is called

A)mathematical.
B)iconic.
C)analog.
D)constrained.

Question 20

The decision making process includes implementation and evaluation of the decision.

Question 21

To find the choice that provides the highest profit and the fewest employees, apply a single-criterion decision process.

Question 22

Explain the relationship among model development, model accuracy, and the ability to obtain a solution from a model.

Question 23

Explain the difference between quantitative and qualitative analysis from the manager's point of view.

Question 24

The first step in the decision making process is to identify the problem.

Question 25

The most critical component in determining the success or failure of any quantitative approach to decision making is problem definition.

Question 26

The relationship d = 5000 - 25p describes what happens to demand (d) as price (p) varies. Here, price can vary between $10 and $50.
a.How many units can be sold at the $10 price? How many can be sold at the $50 price?
b.Model the expression for total revenue.
c.Consider prices of $20, $30, and $40.Which price alternative will maximize total revenue? What are the values for demand and revenue at this price?

Question 27

Frederick Taylor is credited with forming the first MS/OR interdisciplinary teams in the 1940's.

Question 28

All uncontrollable inputs or data must be specified before we can analyze the model and recommend a decision or solution for the problem.

Question 29

The most successful quantitative analysis will separate the analyst from the managerial team until after the problem is fully structured.

Question 30

A company seeks to maximize profit subject to limited availability of man-hours. Man-hours is a controllable input.

Question 31

Explain the relationship between information systems specialists and quantitative analysts in the solution of large mathematical problems.

Question 32

Uncontrollable inputs are the decision variables for a model.

Question 33

What are three of the management science techniques that practitioners use most frequently? How can the effectiveness of these applications be increased?

Question 34

What steps of the problem solving process are involved in decision making?

Question 35

A snack food manufacturer buys corn for tortilla chips from two cooperatives, one in Iowa and one in Illinois. The price per unit of the Iowa corn is $6.00 and the price per unit of the Illinois corn is $5.50.
a.Define variables that would tell how many units to purchase from each source.
b.Develop an objective function that would minimize the total cost.
c.The manufacturer needs at least 12000 units of corn.The Iowa cooperative can supply up to 8000 units, and the Illinois cooperative can supply at least 6000 units.Develop constraints for these conditions.

Question 36

There is a fixed cost of $50,000 to start a production process. Once the process has begun, the variable cost per unit is $25. The revenue per unit is projected to be $45.
a.Write an expression for total cost.
b.Write an expression for total revenue.
c.Write an expression for total profit.
d.Find the break-even point.

Question 37

Should the problem solving process be applied to all problems?

Question 38

Give three benefits of model development and an example of each.

Question 39

The value of any model is that it enables the user to make inferences about the real situation.

Question 40

The feasible solution is the best solution possible for a mathematical model.

Question 41

Organizers of an Internet training session will charge participants $150 to attend. It costs $3000 to reserve the room, hire the instructor, bring in the equipment, and advertise. Assume it costs $25 per student for the organizers to provide the course materials.
a.How many students would have to attend for the company to break even?
b.If the trainers think, realistically, that 20 people will attend, then what price should be charged per person for the organization to break even?

Question 42

As part of their application for a loan to buy Lakeside Farm, a property they hope to develop as a bed-and-breakfast operation, the prospective owners have projected:
a.Write the expression for total cost per month.Assume 30 days per month.
b.Write the expression for total revenue per month.
c.If there are 12 guest rooms available, can they break even? What percentage of rooms would need to be occupied, on average, to break even?

Question 43

In this portion of an Excel spreadsheet, the user has given values for selling price, the costs, and a sample volume. Give the cell formula for
a.cell E12, break-even volume.
b.cell E16, total revenue.
c.cell E17, total cost.
d.cell E19, profit/loss. $\begin{array}{|l|c|c|c|c|c|}\hline & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \\\hline 1 & & & & & \\\hline 2 & & & & & \\\hline 3 & & & & \\\hline 4 &\text { Break-even calculation } & & & \\\hline 5 & & & & \\\hline 6 &&\text { Selling price per unit }&&&10\\\hline 7 & & & & & \\\hline 8 && \text { Costs } \\\hline 9 &&\text { Fixed cost }& & &8400 \\\hline 10 & &\text { Variable cost per unit }& & &4.5 \\\hline 11 & & & & & \\\hline 12 & &\text { Break-even volume } & & & \\\hline 13 & & & & & \\\hline 14 & &\text { Sample calculation } & & & \\\hline 15 & & \text { volume }& & &2000 \\\hline 16 & &\text { Total revenue } & & & \\\hline 17 & &\text { Total cost } & & & \\\hline 18 & & & & & \\\hline 19 & & \text { Profit loss }& & & \\\hline\end{array}$

Question 44

To establish a driver education school, organizers must decide how many cars, instructors, and students to have. Costs are estimated as follows. Annual fixed costs to operate the school are $30,000. The annual cost per car is $3000. The cost per instructor is $11,000 and one instructor is needed for each car. Tuition for each student is $350. Let x be the number of cars and y be the number of students.
a.Write an expression for total cost.
b.Write an expression for total revenue.
c.Write an expression for total profit.
d.The school offers the course eight times each year.Each time the course is offered, there are two sessions.If they decide to operate five cars, and if four students can be assigned to each car, will they break even?

Question 45

A university schedules summer school courses based on anticipated enrollment. The cost for faculty compensation, laboratories, student services, and allocated overhead for a computer class is $8500. If students pay $420 to enroll in the course, how large would enrollment have to be for the university to break even?

Question 46

An author has received an advance against royalties of $10,000. The royalty rate is $1.00 for every book sold in the United States, and $1.35 for every book sold outside the United States. Define variables for this problem and write an expression that could be used to calculate the number of books to be sold to cover the advance.

Question 47

As computer service center has the capacity to do 400 jobs per day. The expected level of jobs demanded per day is 250 per day. The fixed cost of renting the computer process is $200 per day. Space rents for $100 per day. The cost of material is $15 per unit of work and $.35 cents of labor per unit. What is the break-even level of work?

Question 48

A small firm builds television antennas. The investment in plan and equipment is $200,000. The variable cost per television antenna is $500. The price of the television antenna is $1000. How many television antennas would be needed for the firm to break even?

Question 49

A manufacturer makes two products, doors and windows. Each must be processed through two work areas. Work area #1 has 60 hours of available production time. Work area #2 has 48 hours of available production time. Manufacturing of a door requires 4 hours in work area #1 and 2 hours in work area #2. Manufacturing of a window requires 2 hours in work area #1 and 4 hours in work area #2. Profit is $8 per door and $6 per window.
a.Define decision variables that will tell how many units to build (doors and windows).
b.Develop an objective function that will maximize profits.
c.Develop production constraints for work area #1 and #2.