Deck 4: Linear Programming Applications

Question 1

It is improper to combine manufacturing costs and overtime costs in the same objective function.

Answer 1

False

Question 2

Media selection problems can maximize exposure quality and use number of customers reached as a constraint, or maximize the number of customers reached and use exposure quality as a constraint.

Answer 2

True

Question 3

Let A, B, and C be the amounts invested in companies A, B, and C.If no more than 50% of the total investment can be in company B, then

A)B < 5
B)A - .5B + C < 0
C).5A - B - .5C < 0
D)-.5A + .5B - .5C < 0

Answer 3

D

Question 4

Let P_ij = the production of product i in period j.To specify that production of product 1 in period 3 and in period 4 differs by no more than 100 units,

A)P₁₃ - P₁₄ < 100; P₁₄ - P₁₃ < 100
B)P₁₃ - P₁₄ < 100; P₁₃ - P₁₄ > 100
C)P₁₃ - P₁₄ < 100; P₁₄ - P₁₃ > 100
D)P₁₃ - P₁₄ > 100; P₁₄ - P₁₃ > 100

Question 5

To study consumer characteristics, attitudes, and preferences, a company would engage in

A)client satisfaction processing.
B)marketing research.
C)capital budgeting.
D)production planning.

Question 6

Production constraints frequently take the form:
beginning inventory + sales - production = ending inventory

Question 7

If an LP problem is not correctly formulated, the computer software will indicate it is infeasible when trying to solve it.

Question 8

Let M be the number of units to make and B be the number of units to buy.If it costs $2 to make a unit and $3 to buy a unit and 4000 units are needed, the objective function is

A)Max 2M + 3B
B)Min 4000 (M + B)
C)Max 8000M + 12000B
D)Min 2M + 3B

Question 9

Media selection problems usually determine

A)how many times to use each media source.
B)the coverage provided by each media source.
C)the cost of each advertising exposure.
D)the relative value of each medium.

Question 10

An LP model for a large-scale production scheduling problem involving numerous products, machines, and time periods can require thousands of decision variables and constraints.

Question 11

To properly interpret dual prices, one must know how costs were allocated in the objective function.

Question 12

Department 3 has 2500 hours.Transfers are allowed to departments 2 and 4, and from departments 1 and 2.If A_i measures the labor hours allocated to department i and T_ij the hours transferred from department i to department j, then

A)T₁₃ + T₂₃ - T₃₂ - T₃₄ - A₃ = 2500
B)T₃₁ + T₃₂ - T₂₃ - T₄₃ + A₃ = 2500
C)A₃ + T₁₃ + T₂₃ - T₃₂ - T₃₄ = 2500
D)A₃ - T₁₃ - T₂₃ + T₃₂ + T₃₄ = 2500

Question 13

For the marketing research problem presented in the textbook, the research firm's objective is to conduct the market survey so as to meet the client's needs at a minimum cost.

Question 14

The dual price for a constraint that compares funds used with funds available is .058.This means that

A)the cost of additional funds is 5.8%.
B)if more funds can be obtained at a rate of 5.5%, some should be.
C)no more funds are needed.
D)the objective was to minimize.

Question 15

If a real-world problem is correctly formulated, it is not possible to have alternative optimal solutions.

Question 16

If P_ij = the production of product i in period j, then to indicate that the limit on production of the company's three products in period 2 is 400,

A)P₂₁ + P₂₂ + P₂₃ < 400
B)P₁₂ + P₂₂ + P₃₂ < 400
C)P₃₂ < 400
D)P₂₃ < 400

Question 17

For a portfolio selection problem with the objective of maximizing expected return, the dual price for the available funds constraint provides information about the

A)proportion of the portfolio that is invested in a particular investment type
B)return from additional investment funds
C)degree of portfolio diversification that is optimal
D)cost of an additional unit of a particular investment type

Question 18

A marketing research application uses the variable HD to represent the number of homeowners interviewed during the day.The objective function minimizes the cost of interviewing this and other categories and there is a constraint that HD > 100.The solution indicates that interviewing another homeowner during the day will increase costs by 10.00.What do you know?

A)the objective function coefficient of HD is 10.
B)the dual price for the HD constraint is 10.
C)the objective function coefficient of HD is -10.
D)the dual price for the HD constraint is -10.

Question 19

The objective function for portfolio selection problems usually is maximization of expected return or

A)maximization of investment types
B)minimization of cost
C)minimization of risk
D)maximization of number of shares

Question 20

Portfolio selection problems should acknowledge both risk and return.

Question 21

A constraint with non-zero slack will have a positive dual price, and a constraint with non-zero surplus will have a negative dual price.