Deck 17: Optimization Models with Uncertainty

Question 1

Use the table below to answer the following question(s).
The Atlas Movies Theater has repriced their ticket rates to maximize revenues.They have three classes of tickets: Classic, Silver, and Gold.The table below provides information on the average ticket sales, revenue and price elasticity on demand.They have a total seating capacity of 300.The table also provides the new price for the three classes obtained using Solver.

Assume the distributions of elasticities for three classes of tickets are uniform with minimum and maximum values equal to 75% and 125% of their estimated values, respectively.Under this assumption, use Monte Carlo simulation to answer the following questions.The model is simulated for 10,000 trials.
Which of the following cells is defined as the output cell?

A)E16
B)E18
C)F17
D)F18

Answer 1

B

Question 2

Use the table below to answer the following question(s).
Below is a spreadsheet for Stone Age Surfboards.

Assume that the finishing time for a pair of Rockwell surfboards is triangular with a minimum value of 1.4, a most likely value of 1.5, and a maximum value of 1.8 and that finishing time for a pair of Limestone surfboards is also triangular with a minimum value of 1.8, a most likely value of 2.0, and a maximum value of 2.4.The number of trials per simulation is equal to 5000.
What is the mean absolute deviation obtained from the simulation results?

A)1)25
B)0)65
C)0)24
D)0)99

Answer 2

D

Question 3

Use the table below to answer the following question(s).
The Atlas Movies Theater has repriced their ticket rates to maximize revenues.They have three classes of tickets: Classic, Silver, and Gold.The table below provides information on the average ticket sales, revenue and price elasticity on demand.They have a total seating capacity of 300.The table also provides the new price for the three classes obtained using Solver.

Assume the distributions of elasticities for three classes of tickets are uniform with minimum and maximum values equal to 75% and 125% of their estimated values, respectively.Under this assumption, use Monte Carlo simulation to answer the following questions.The model is simulated for 10,000 trials.
What is the value of mean obtained from the simulation results?

A)450
B)300
C)400
D)250

Answer 3

B

Question 4

Use the table below to answer the following question(s).
Below is the spreadsheet for an economic order quantity model.

Assume that the distribution of demand is normal with a mean of 20,000 and standard deviation of 2,000.
What is the coefficient of variation obtained from the simulation results?

A)0)28
B)0)10
C)0)45
D)0)60

Question 5

Use the table below to answer the following question(s).
Below is a spreadsheet for Stone Age Surfboards.

Assume that the finishing time for a pair of Rockwell surfboards is triangular with a minimum value of 1.4, a most likely value of 1.5, and a maximum value of 1.8 and that finishing time for a pair of Limestone surfboards is also triangular with a minimum value of 1.8, a most likely value of 2.0, and a maximum value of 2.4.The number of trials per simulation is equal to 5000.
What is the coefficient of variation obtained from the simulation results?

A)0)098
B)0)134
C)0)047
D)0)020

Question 6

Use the table below to answer the following question(s).
The Atlas Movies Theater has repriced their ticket rates to maximize revenues.They have three classes of tickets: Classic, Silver, and Gold.The table below provides information on the average ticket sales, revenue and price elasticity on demand.They have a total seating capacity of 300.The table also provides the new price for the three classes obtained using Solver.

Assume the distributions of elasticities for three classes of tickets are uniform with minimum and maximum values equal to 75% and 125% of their estimated values, respectively.Under this assumption, use Monte Carlo simulation to answer the following questions.The model is simulated for 10,000 trials.
Which of the following cells are defined to be uniformly distributed?

A)B7:B9
B)C7:C9
C)D7:D9
D)B15:B17

Question 7

Use the table below to answer the following question(s).
Below is the spreadsheet for an economic order quantity model.

Assume that the distribution of demand is normal with a mean of 20,000 and standard deviation of 2,000.
What is the value of standard deviation obtained from the simulation results?

A)35.01
B)49.01
C)56.01
D)41.01

Question 8

Use the table below to answer the following question(s).
Below is a spreadsheet for Stone Age Surfboards.

Assume that the finishing time for a pair of Rockwell surfboards is triangular with a minimum value of 1.4, a most likely value of 1.5, and a maximum value of 1.8 and that finishing time for a pair of Limestone surfboards is also triangular with a minimum value of 1.8, a most likely value of 2.0, and a maximum value of 2.4.The number of trials per simulation is equal to 5000.
Which of the following cells is defined as the uncertain output cell?

A)D15
B)D16
C)D19
D)D22

Question 9

Use the table below to answer the following question(s).
Below is the spreadsheet for an economic order quantity model.

Assume that the distribution of demand is normal with a mean of 20,000 and standard deviation of 2,000.
What is the increase in total cost?

A)$ 280
B)$ 590
C)$ 355
D)$ 450

Question 10

Use the table below to answer the following question(s).
Below is the spreadsheet for an economic order quantity model.

Assume that the distribution of demand is normal with a mean of 20,000 and standard deviation of 2,000.
What is the mean absolute deviation obtained from the simulation results?

A)39.10
B)24.56
C)58.75
D)46.36

Question 11

Use the table below to answer the following question(s).
Below is the spreadsheet for an economic order quantity model.

Assume that the distribution of demand is normal with a mean of 20,000 and standard deviation of 2,000.
What is the value of mean obtained from the simulation results?

A)473.0
B)520.0
C)456.0
D)490.0

Question 12

Use the table below to answer the following question(s).
Below is the spreadsheet for an economic order quantity model.

Assume that the distribution of demand is normal with a mean of 20,000 and standard deviation of 2,000.
What is the reorder point required to attain a 95% service level?

A)460.0
B)750.5
C)571.0
D)640.5

Question 13

Use the table below to answer the following question(s).
Below is a spreadsheet for Stone Age Surfboards.

Assume that the finishing time for a pair of Rockwell surfboards is triangular with a minimum value of 1.4, a most likely value of 1.5, and a maximum value of 1.8 and that finishing time for a pair of Limestone surfboards is also triangular with a minimum value of 1.8, a most likely value of 2.0, and a maximum value of 2.4.The number of trials per simulation is equal to 5000.
How often will overtime be needed if 4.5 Rockwell and 9.0 Limestone surfboards, the optimal solution, are scheduled each day?

A)more than 60%
B)more than 87%
C)more than 75%
D)more than 52%

Question 14

Use the table below to answer the following question(s).
Below is the spreadsheet for an economic order quantity model.

Assume that the distribution of demand is normal with a mean of 20,000 and standard deviation of 2,000.
Which of the following cells is defined as the uncertain output cell?

A)B13
B)C15
C)C19
D)B22

Question 15

Use the table below to answer the following question(s).
Below is a spreadsheet for Stone Age Surfboards.

Assume that the finishing time for a pair of Rockwell surfboards is triangular with a minimum value of 1.4, a most likely value of 1.5, and a maximum value of 1.8 and that finishing time for a pair of Limestone surfboards is also triangular with a minimum value of 1.8, a most likely value of 2.0, and a maximum value of 2.4.The number of trials per simulation is equal to 5000.
What is the value of standard deviation obtained from the simulation results?

A)1)21
B)2)50
C)3)80
D)5)00

Question 16

Use the table below to answer the following question(s).
The Atlas Movies Theater has repriced their ticket rates to maximize revenues.They have three classes of tickets: Classic, Silver, and Gold.The table below provides information on the average ticket sales, revenue and price elasticity on demand.They have a total seating capacity of 300.The table also provides the new price for the three classes obtained using Solver.

Assume the distributions of elasticities for three classes of tickets are uniform with minimum and maximum values equal to 75% and 125% of their estimated values, respectively.Under this assumption, use Monte Carlo simulation to answer the following questions.The model is simulated for 10,000 trials.
What is the value of standard deviation obtained from the simulation results?

A)5
B)4
C)8
D)10

Question 17

Use the table below to answer the following question(s).
Below is a spreadsheet for Stone Age Surfboards.

Assume that the finishing time for a pair of Rockwell surfboards is triangular with a minimum value of 1.4, a most likely value of 1.5, and a maximum value of 1.8 and that finishing time for a pair of Limestone surfboards is also triangular with a minimum value of 1.8, a most likely value of 2.0, and a maximum value of 2.4.The number of trials per simulation is equal to 5000.
Which of the following cells is defined with a triangular distribution?

A)B6
B)D6
C)B7
D)D7

Question 18

Use the table below to answer the following question(s).
Below is the spreadsheet for an economic order quantity model.

Assume that the distribution of demand is normal with a mean of 20,000 and standard deviation of 2,000.
Which of the following cells is defined to be normally distributed using the function = PsiNormal(20000,2000)?

A)B5
B)B6
C)B7
D)B12

Question 19

Use the table below to answer the following question(s).
Below is a spreadsheet for Stone Age Surfboards.

Assume that the finishing time for a pair of Rockwell surfboards is triangular with a minimum value of 1.4, a most likely value of 1.5, and a maximum value of 1.8 and that finishing time for a pair of Limestone surfboards is also triangular with a minimum value of 1.8, a most likely value of 2.0, and a maximum value of 2.4.The number of trials per simulation is equal to 5000.
What is the value of mean obtained from the simulation results?

A)15.65
B)25.91
C)20.78
D)30.42

Question 20

Use the table below to answer the following question(s).
Below is the spreadsheet for an economic order quantity model.

Assume that the distribution of demand is normal with a mean of 20,000 and standard deviation of 2,000.
What is the value of safety stock?

A)45
B)71
C)120
D)95

Question 21

Use the table below to answer the following question(s).
Below is the spreadsheet for a newsvendor model.

Answer the following question(s)using multiple parameterized simulations.The range of the historical data is 40 to 51.
Which of the following is the best purchase quantity to maximize the expected profit?

A)42
B)45
C)48
D)51

Question 22

Use the table below to answer the following question(s).
Below is the spreadsheet for a portfolio allocation model.

Assume that the distributions of life insurance annual return is uniform distribution with minimum 4% and maximum 6%, bond mutual funds annual return is normal with mean 7% and standard deviation 1%, stock mutual funds annual return is lognormal with mean 11% and standard deviation 4%.
What is the value of the mean obtained from the simulation results for maximizing the total expected return? [Hint: Choose the approximate value.]

A)$ 5,876.28
B)$ 6,570.42
C)$ 7,257.45
D)$ 5,178.84

Question 23

Use the table below to answer the following question(s).
Below is a spreadsheet for a hotel overbooking model.

Answer the following question(s)using multiple parameterized simulations.The range of the historical data is 400-430.
What is the number of reservations that will generate a net revenue of $59,000?

A)400
B)410
C)420
D)430

Question 24

Use the table below to answer the following question(s).
Below is the spreadsheet for a portfolio allocation model.

Assume that the distributions of life insurance annual return is uniform distribution with minimum 4% and maximum 6%, bond mutual funds annual return is normal with mean 7% and standard deviation 1%, stock mutual funds annual return is lognormal with mean 11% and standard deviation 4%.
What is the coefficient of variation obtained from the simulation results for maximizing the total expected return? [Hint: Choose the approximate value.]

A)1)2451
B)0)4865
C)0)8917
D)0)1268

Question 25

Use the table below to answer the following question(s).
Below is the spreadsheet for a portfolio allocation model.

Assume that the distributions of life insurance annual return is uniform distribution with minimum 4% and maximum 6%, bond mutual funds annual return is normal with mean 7% and standard deviation 1%, stock mutual funds annual return is lognormal with mean 11% and standard deviation 4%.
What is the value of mode obtained from the simulation results for maximizing the total expected return? [Hint: Choose the approximate value.]

A)$ 6,553.02
B)$ 5,848.24
C)$ 5,281.79
D)$ 7,025.86

Question 26

Use the table below to answer the following question(s).
Below is the spreadsheet for a project selection model.

What is the mean absolute deviation obtained from the simulation results? [Hint: Choose the approximate value.]

A)$ 141,901
B)$ 104,786
C)$ 188,995
D)$ 232,673

Question 27

Use the table below to answer the following question(s).
Below is the spreadsheet for a newsvendor model.

Answer the following question(s)using multiple parameterized simulations.The range of the historical data is 40 to 51.
Which of the following values of purchase quantity shows the least mean profit?

A)42
B)45
C)48
D)51

Question 28

Use the table below to answer the following question(s).
The Atlas Movies Theater has repriced their ticket rates to maximize revenues.They have three classes of tickets: Classic, Silver, and Gold.The table below provides information on the average ticket sales, revenue and price elasticity on demand.They have a total seating capacity of 300.The table also provides the new price for the three classes obtained using Solver.

Assume the distributions of elasticities for three classes of tickets are uniform with minimum and maximum values equal to 75% and 125% of their estimated values, respectively.Under this assumption, use Monte Carlo simulation to answer the following questions.The model is simulated for 10,000 trials.
What is the mean absolute deviation obtained from the simulation results?

A)3
B)6
C)8
D)10

Question 29

Use the table below to answer the following question(s).
The Atlas Movies Theater has repriced their ticket rates to maximize revenues.They have three classes of tickets: Classic, Silver, and Gold.The table below provides information on the average ticket sales, revenue and price elasticity on demand.They have a total seating capacity of 300.The table also provides the new price for the three classes obtained using Solver.

Assume the distributions of elasticities for three classes of tickets are uniform with minimum and maximum values equal to 75% and 125% of their estimated values, respectively.Under this assumption, use Monte Carlo simulation to answer the following questions.The model is simulated for 10,000 trials.
What is the probability that more than 300 tickets will be sold?

A)approximately 0.75
B)approximately 0.40
C)approximately 0.60
D)approximately 0.50

Question 30

Use the table below to answer the following question(s).
Below is a spreadsheet for a hotel overbooking model.

Answer the following question(s)using multiple parameterized simulations.The range of the historical data is 400-430.
If there are 425 reservations and 5 overbooked customers, what is the net revenue generated?

A)$ 58,000
B)$ 58,500
C)$ 59,000
D)$ 59,500

Question 31

Use the table below to answer the following question(s).
Below is the spreadsheet for a project selection model.

What is the coefficient of variation obtained from the simulation results? [Hint: Choose the approximate value.]

A)0)386
B)0)589
C)0)415
D)0)665

Question 32

Use the table below to answer the following question(s).
Below is the spreadsheet for a portfolio allocation model.

Assume that the distributions of life insurance annual return is uniform distribution with minimum 4% and maximum 6%, bond mutual funds annual return is normal with mean 7% and standard deviation 1%, stock mutual funds annual return is lognormal with mean 11% and standard deviation 4%.
What is the value of standard deviation obtained from the simulation results for maximizing the total expected return? [Hint: Choose the approximate value.]

A)$ 1,346.78
B)$ 1,890.25
C)$833.19
D)$ 1,578.64

Question 33

Use the table below to answer the following question(s).
Below is the spreadsheet for a project selection model.

What is the value of mean obtained from the simulation results? [Hint: Choose the approximate value.]

A)$ 405,897
B)$ 358,138
C)$ 266,603
D)$ 452,785

Question 34

Use the table below to answer the following question(s).
Below is the spreadsheet for a newsvendor model.

Answer the following question(s)using multiple parameterized simulations.The range of the historical data is 40 to 51.
What is the value of mean profit if the purchase quantity is equal to 45?

A)$ 252.0
B)$ 234.0
C)$ 216.0
D)$ 222.0

Question 35

Use the table below to answer the following question(s).
Below is the spreadsheet for a portfolio allocation model.

Assume that the distributions of life insurance annual return is uniform distribution with minimum 4% and maximum 6%, bond mutual funds annual return is normal with mean 7% and standard deviation 1%, stock mutual funds annual return is lognormal with mean 11% and standard deviation 4%.
What is the mean absolute deviation obtained from the simulation results for maximizing the total expected return? [Hint: Choose the approximate value.]

A)$ 887.25
B)$ 735.86
C)$ 643.69
D)$ 967.36

Question 36

Use the table below to answer the following question(s).
Below is a spreadsheet for a hotel overbooking model.

Answer the following question(s)using multiple parameterized simulations.The range of the historical data is 400-430.
What is the number of reservations that will generate the least revenue?

A)400
B)410
C)420
D)430

Question 37

Use the table below to answer the following question(s).
The Atlas Movies Theater has repriced their ticket rates to maximize revenues.They have three classes of tickets: Classic, Silver, and Gold.The table below provides information on the average ticket sales, revenue and price elasticity on demand.They have a total seating capacity of 300.The table also provides the new price for the three classes obtained using Solver.

Assume the distributions of elasticities for three classes of tickets are uniform with minimum and maximum values equal to 75% and 125% of their estimated values, respectively.Under this assumption, use Monte Carlo simulation to answer the following questions.The model is simulated for 10,000 trials.
What is the coefficient of variation obtained from the simulation results?

A)0)086
B)0)120
C)0)014
D)0)048

Question 38

Use the table below to answer the following question(s).
Below is the spreadsheet for a project selection model.

Which of the following cells is defined as the output cell?

A)B16
B)G16
C)G17
D)G18

Question 39

Use the table below to answer the following question(s).
Below is the spreadsheet for a project selection model.

What is the value of standard deviation obtained from the simulation results? [Hint: Choose the approximate value.]

A)$ 89,236
B)$ 177,334
C)$ 236,745
D)$ 107,892

Question 40

Use the table below to answer the following question(s).
Below is a spreadsheet for a hotel overbooking model.

Answer the following question(s)using multiple parameterized simulations.The range of the historical data is 400-430.
Which of the following is the best number of reservations to accept?

A)400
B)410
C)420
D)430

Question 41

What is a value at risk constraint?

Question 42

Use the table below to answer the following question(s).
Below is the spreadsheet for a project selection model.

A service level is a constraint that represents the probability that demand can be satisfied.

Question 43

Use the table below to answer the following question(s).
Below is the spreadsheet for a project selection model.

A value at risk measure is more conservative in nature than a conditional value at risk measure.

Question 44

Define a chance constraint.

Question 45

Use the table below to answer the following question(s).
Below is the spreadsheet for a project selection model.

A value at risk measure considers the magnitude of the violation when the constraint is not satisfied.

Question 46

Below is the spreadsheet for an economic order quantity model.

Assume that the distribution of demand is normal with a mean of 20,000 and standard deviation of 2,000.The increase in total cost is calculated by adding the holding cost and the ordering cost.

Question 47

What is a conditional value at risk constraint?

Question 48

Use the table below to answer the following question(s).
Below is the spreadsheet for a project selection model.

A chance constraint is one that specifies the fraction of trials in a simulation that must satisfy a constraint.

Question 49

What is a service level?

Question 50

What are multiple parameterized simulations?