Deck 5: Advanced Linear Programming Applications

Question 1

For a two-person, zero-sum, mixed-strategy game, it is necessary to solve the LP for each player in order to learn both players' optimal strategies.

Answer 1

False

Question 2

Revenue management methodology was originally developed for the banking industry.

Answer 2

False

Question 3

Revenue management methodology was originally developed for

A)a cruise line.
B)an airline.
C)a car rental company.
D)a hotel chain.

Answer 3

B

Question 4

The composite unit in DEA

A)has as output a weighted average of the outputs of the individual units.
B)has as input a weighted average of the inputs of the individual units.
C)has outputs greater than or equal to the outputs of any individual unit.
D)All of the alternatives are correct.

Question 5

For a two-person, zero-sum, mixed-strategy game, each player selects its strategy according to

A)what strategy the other player used last.
B)a fixed rotation of strategies.
C)a probability distribution.
D)the outcome of the previous game.

Question 6

It is possible for DEA to show all operating units to be relatively inefficient.

Question 7

For a two-person, zero-sum, mixed-strategy game, it is necessary to solve the LP for only one of the players to learn the optimal strategies for both players.

A)1.
B)the number of operating units.
C)100.
D)any arbitrary value.

Question 8

If it is optimal for both players in a two-person, zero-sum game to select one strategy and stay with that strategy regardless of what the other player does, the game

A)has more than one equilibrium point.
B)will have alternating winners.
C)will have no winner.
D)has a pure strategy solution.

Question 9

The goal of portfolio models is to create a portfolio that provides the best balance between risk and return.

Question 10

Modern revenue management systems maximize revenue potential for an organization by helping to manage

A)pricing strategies.
B)reservation policies.
C)short-term supply decisions.
D)All of the alternatives are correct.

Question 11

DEA does not necessarily identify the operating units that are relatively efficient.

Question 12

A linear programming application used to measure the relative efficiency of operating units with the same goals and objectives is

A)game theory.
B)asset allocation.
C)data envelopment analysis.
D)revenue management.

Question 13

DEA is used to measure the relative efficiency of two (or more) units in different industries, such as a bank and a school.

Question 14

A DEA linear programming model involving 4 input measures and 3 output measures will have

A)7 constraints.
B)8 constraints.
C)12 constraints.
D)13 constraints.

Question 15

To develop a portfolio that provides the best return possible with a minimum risk, the linear programming model will have an objective function which

A)minimizes the maximum risk.
B)minimizes total risk.
C)maximizes return and minimizes risk.
D)maximizes the minimum return.

Question 16

In general, every DEA linear programming model will include a constraint that requires the weights for the operating units to sum to

A)1.
B)the number of operating units.
C)100.
D)any arbitrary value.

Question 17

If the inputs of the composite unit in DEA are greater than the inputs for an individual unit, then the composite is more efficient.

Question 18

DEA will show all but one operating unit to be relatively inefficient in the case where an operating unit producing the most of every output and also consumes the least of every input.

Question 19

In data envelopment analysis, the percentage of an individual operating unit's resources that are available to the composite operating unit is the

A)efficiency index.
B)saddle point.
C)maximin.
D)minimax.

Question 20

The overall goal of portfolio models is to create a portfolio that provides the best balance between

A)short-term and long-term investments.
B)gains and losses.
C)risk and return.
D)liquidity and stability.

Question 21

If a pure strategy solution exists for a two-person, zero-sum game, it is the optimal solution to the game.

Question 22

Revenue management methodology can be applied in the case of nonperishable assets.

Question 23

In a two-person, zero-sum, pure-strategy game, there is no advantage to either player to switch from its strategy even if one of the players discovers the other player's strategy in advance.

Question 24

In portfolio models, risk is minimized by diversification.