a) Measures are unambiguous quantities, whereas indicators are devised from common sense understandings

Transcription

1 Chapter-1: QUANTITATIVE TECHNIQUES Self Assessment Questions 1. An operational definition is: a) One that bears no relation to the underlying concept b) An abstract, theoretical definition of a concept c) A definition of a concept in terms of specific, empirical measures d) One that refers to opera singers and their work 2. The general conclusion is that decisions are often only weakly based on evidence, either of the situation in question, or of the efficacy of the kind of intervention proposed (a) True (b) False 3. The difference between measures and indicators is that: a) Measures are unambiguous quantities, whereas indicators are devised from common sense understandings b) Indicators have a more direct relationship to the underlying concept than measures c) Measures are intuitively devised and then applied as if they were direct indicators of a concept d) Indicators are unambiguous quantities, whereas measures are subjective and value-laden 4. The split-half method is used as a test of: a) Stability b) Internal reliability c) Inter-observer consistency d) External validity 5. Which of the following is not a form of measurement validity? a) Concurrent validity b) Face validity c) Conductive validity

2 d) Convergent validity 6. Quantitative social researchers rarely claim to have established causality because: a) They are more concerned with publishing the results of their reliability tests b) They do not believe that this is an appropriate goal to be striving for c) They keep forgetting which of the variables they have manipulated d) They tend to use cross-sectional designs, which produce only correlations 7. The mathematical model is in the form of expressions and equations that replicate the problem. (a) True (b) False 8. Quantitative research has been criticised because: a) The measurement process suggests a spurious and artificial sense of accuracy b) The reliance on instruments and procedures makes it high in ecological validity c) It underestimates the similarities between objects in the natural and social worlds d) All of the above 9. The term 'reverse operations' means that: a) The theories we devise will often hinder our attempts to measure concepts b) The measurements we devise can sometimes help to develop a theory c) Techniques such as factor analysis have no place in social research d) Driving instructors always make you practice the most difficult manoeuvre 10. Written accounts of quantitative research rarely include the results of reliability and validity tests because: a) Researchers are more interested in reporting their operational definitions b) Researchers don't really think that these tests are important c) Journal editors have banned these kinds of articles d) Researchers are more interested in reporting their substantive findings 11. Which is the odd one out?

3 Modern qualitative research can generally involve a detailed study of: a. psychological characteristics of interesting individuals. b. media content. c. conversational exchanges between people and interviews. d. text. 12. An interest in qualitative methods has increased in terms of analysis of: a. laboratory experiments. b. categorizations. c. language based data. d. interest in qualitative is actually on the decline. 13. Qualitative research methods can be thought of as: a. methods used to search for the nature of reality. b. a stark alternative to quantitative research. c. parallel with the physical sciences. d. a preliminary stage in the research which can contribute to the development of adequate quantification. 14. What term dominates the qualitative-quantitative debate? a. Metaphysics. b. Critical realism. c. Positivism. d. Theism. 15. What is positivism? a. Positivism holds that knowledge is grounded in religion. b. Positivism refers to statistics and statistical analysis. c. Positivism is a philosophical position on how we go about obtaining knowledge.

4 d. Positivism refers to knowledge about the nature of our being in the world as revealed through theoretical philosophizing. 16. Which of the following statements about the qualitative-quantitative debate is incorrect? a. It became equated with relatively crude and quantified methods. b. Qualitative researchers often fail to recognize positivism as the epistemological basis of their work. c. Positivism applies to quantitative methods. d. Positivism stresses the importance of observable and observed facts in the accumulation of knowledge. 17. Perhaps psychologists, more than some other disciplines, tend to do what? a. Have an allegiance to a theoretical empiricism (virtually the collection and analysis of data for its own sake). b. Still accept the view that "laws of psychology" are possible. c. No longer have the allegiance to the importance of observation. d. They write as if their statements concerning their research findings apply beyond the context in which they are studied. 18. Quantitative Technique is not a scientific approach to managerial decision-making (a) True (b) False 19. The importance of measurement in quantitative research is that: a) It allows us to delineate fine differences between people or cases b) It provides a consistent device or yardstick c) It allows for precise estimates of the degree of relationship between concepts d) All of the above 20. One of the preoccupations of quantitative researchers is with generalization, which is a sign of: a) External validity b) Internal reliability c) External reliability

5 d) Internal validity Answers for Self Assessment Questions 1. (a) 2.(a) 3.(a) 4.(b) 5.(c) 6. (d) 7.(a) 8.(a) 9.(b) 10.(d) 11. (a) 12.(c) 13.(d) 14.(c) 15.(c) 16. (c) 17.(d) 18.(b) 19.(d) 20.(a) Chapter-2: LINEAR PROGRAMMING Self Assessment Questions 1. What is the objective function (Z) to be maximized in this linear programming problem (where Z is total profit in s)? a) Z = 120X + 100Y b) Z = 100X + 120Y c) Z = 2X + 3Y d) Z = 1500X Y 2. Total profits are maximized when the objective function (as a straight line on a graph) is: a) Nearest to the origin and tangent to the feasible region b) Furthest from the origin and tangent to the feasible region c) Furthest from the origin irrespective of the feasible region d) Nearest to the origin irrespective of the feasible region 3. What is the equation of the labour constraint line for the welding department in this linear programme? a) 2X + 3Y = 550 hours b) 3X + 2Y = 550 hours c) 2X + 3Y = 1,500 hours d) 3X + 2Y = 1,500 hours 4. What is the equation of the labour constraint line for the assembly department in this linear programme? a) 2X + 2Y = 1,500 hours

6 b) 3X + 2Y = 1,500 hours c) 1X + 1Y = 1,500 hours d) 1X + 1Y = 550 hours 5. What is the solution to this linear programming problem in terms of the respective quantities of X and Y to be produced if profits are to be maximized? a) X = 400, Y = 150 b) X = 550, Y = 0 c) X = 0, Y = 500 d) X = 150, Y = Which of the following is NOT an assumption of linear programming? a) Diminishing returns to the variable factors of production b) Prices of products remain the same no matter how high the consumer demand c) Constant returns to the variable factors of production d) Prices of factor inputs remain the same no matter how high the firm demand 7. What can we find by using the following formula? Total Fixed Costs Contribution per unit a) Break-Even Output b) Budgeted Profit c) Margin of Safety d) Budgeted Output 8.Budgeted output minus break-even output gives us the: a) Budgeted Profit b) Contribution per unit c) Maximum profit solution d) Margin of Safety 9.In break-even analysis we assume: a) Non-linear relationships b) Non-proportional relationships c) Diminishing returns to the variable factors of production d) Linear relationships 10 If each unit of output can be sold at a price of 5 and incurs variable costs which are constant at 3 per unit, and if the fixed costs already incurred are 15,000, then the break-even output is:

7 a) 3,000 units b) 5,000 units c) 15,000 units d) 7,500 units 11. Unboundedness is usually a sign that the LP problem a) has finite multiple solutions. is degenerate. b) contains too many redundant constraints. c) has been formulated improperly. d) none of the above. 12. Which of the following is a property of all linear programming problems? a) alternate courses of action to choose from b) minimization of some objective c) a computer program d) usage of graphs in the solution e) usage of linear and nonlinear equations and inequalities 13. A point that satisfies all of a problem's constraints simultaneously is a(n) a) maximum profit point. b) corner point. c) intersection of the profit line and a constraint. d) None of the above 14. The first step in formulating an LP problem is a) graph the problem. b) perform a sensitivity analysis. c) identify the objective and the constraints. d) understand the managerial problem being faced. 15. LP theory states that the optimal solution to any problem will lie at the origin. a) a corner point of the feasible region. b) the highest point of the feasible region. c) the lowest point in the feasible region. d) none of the above

8 16. In order for a linear programming problem to have a unique solution, the solution must exist a) at the intersection of the non negativity constraints. b) at the intersection of a non negativity constraint and a resource constraint. c) at the intersection of two or more constraints. d) none of the above 17. Consider the following linear programming problem: Maximize 12X + 10Y Subject to: 4X + 3Y 480 2X + 3Y 360 all variables 0 Which of the following points (X,Y) could be a feasible corner point? a) (40,48) b) (120,0) c) (180,120) d) none of the above 18. Consider the following linear programming problem: Maximize 12X + 10Y Subject to: 4X + 3Y 480 2X + 3Y 360 all variables 0 Which of the following points (X,Y) is feasible? a) (10,120) b) (120,10) c) (30,100) d) none of the above 19. Consider the following linear programming problem: Maximize 5X + 6Y Subject to: 4X + 2Y 420 1X + 2Y 120 all variables 0

9 Which of the following points (X,Y) is in the feasible region? a) (30,60) b) (105,0) c) (100,10) d) none of the above 20. Consider the following linear programming problem: Maximize 5X + 6Y Subject to: 4X + 2Y 420 1X + 2Y 120 all variables 0 Which of the following points (X,Y) is feasible? a) (50,40) b) (30,50) c) (60,30) d) none of the above Answers for Self Assessment Questions 1. (b) 2.(b) 3.(c) 4.(b) 5.(d) 6. (a) 7.(a) 8.(d) 9.(d) 10.(d) 11. (c) 12.(a) 13.(d) 14.(d) 15.(a) 16. (c) 17.(b) 18.(c) 19.(d) 20.(c) Chapter-3: STATISTICAL DECISION THEORY Self Assessment Questions 1. Which of the following refers to the random (chance) occurrences that can affect the outcome of an individual's decision? a) Payoffs b) States of nature (states of the world or events) c) Decision criteria d) None of the above

10 2. A graphical method of representing events and courses of action may be referred to as a a) decision tree. b) decision criterion. c) payoff table. d) course of action. 3. What will you obtain when you sum the profit for each combination of a state and action times the probability of the occurrence of the state? a) Expected monetary value b) Expected opportunity loss c) Expected value of perfect information d) None of the above 4. The utility curve that shows greater utility for larger dollar amounts would best represent a a) risk averter. b) risk-neutral person. c) risk seeker. d) None of the above 5. The utility curve that shows each additional dollar of profit yielding the same value as the previous dollar would best represent a a) risk averter. b) risk-neutral person. c) risk seeker. d) None of the above 6. If a manager calculates her expected profit under uncertainty to be $23,500, and finds out that the expected value of the best alternative is -$3,500, the expected value of perfect information to this manager would be... a) $20,000 b) $27,000 c) $30,000 d) None of the above 7. The term probability of A and B is used to denote the probability of the intersection of A and B.

11 a) marginal b) conditional c) joint d) subjective 8. Which of the following best expresses the addition rule of probabilities? a) P(A B) = P(A) + P(B) b) P(A B) = P(A) + P(B) + P(A B) c) P(A B) = P(A) + P(B) - P(A B) d) None of the above 9. Which of the following would fit the definition of statistical independence of events A and B? a) P(A B) = P(A) + A(B) b) P(A B) = P(A B)/P(A) c) P(A B) = P(A) d) P(A and B) = P(A) 10. Which of the following demonstrates the multiplication rule? a) P(A B) = P(A)P(B) b) P(A B) = P(A)P(B) c) P(A B) = P(A B)P(B) d) P(A B) = P(AB)P(B) 11. A candy bowl contains 8 red M&Ms, 5 blue and 3 yellow. If 2 M&Ms are selected randomly, what is the probability that one will be blue and one will be yellow? a) 5 percent b) 20 percent c) 33.3 percent d) 12.5 percent 12..probability is the proportion of times that an event will occur, assuming that all outcomes in a sample space are equally likely to occur. a) Classical b) Marginal c) Joint d) Subjective

12 13. If the outcome of event A is not affected by event B, then events A and B are said to be a) mutually exclusive. b) statistically independent c) collectively exhaustive. d) None of the above 14. The collection of all possible events is called a) a probability. b) a sample space. c) a joint probability. d) the empty set. 15. A sample mean is a estimate and we do not know how close it is to the population mean. a) point b) distribution c) confidence d) sample 16. Consider the following data to answer the next three questions. You have the following sample data; a sample size of 7, a mean of 8 and a standard deviation of 4.2. From this, what is the standard error? a) 2.65 b) 2.05 c) 1.58 d) Considering the same sample, convert the score of 10 to a z-score. a) b) 0.48 c) d) It is not possible to convert these figures into z-scores. 18. Finally, you still have the same data (a sample size of 7, a mean of 8 and a standard deviation of 4.2) plus the standard error and you know how to calculate the 95% confidence interval. Thus what is the 95% confidence interval?

13 a) 2.80 to b) 4.90 to c) 3.36 to d) 3.98 to If you have a negative z-score it will be below the mean. a) True b) False 20. In another study you have a standard deviation of 12, a mean of 20 and a sample size of 50. What is the standard error? a) b) c) 1.70 d) Answers for Self Assessment Questions 1. (b) 2.(a) 3.(a) 4.(c) 5.(b) 6. (b) 7.(c) 8.(c) 9.(c) 10.(d) 11. (d) 12.(a) 13.(b) 14.(b) 15.(c) 16. (c) 17.(b) 18.(b) 19.(a) 20.(c) Chapter-4: EXPECTED VALUE OF PERFECT INFORMATION Self Assessment Questions 1) Regression is: a) exactly the same as the correlation coefficient; b) a harder way to do correlation c) can be used on the same data as the correlation coefficient d) none of these. 2) The predictor variable is:

14 a) a) the known variable b) b) the y-variable c) the vertical axis d) all of these. 3) The criterion variable is: a) the inverse square b) the x-variable c) the horizontal axis d) none of these. 4) If one wishes to predict performance in tennis finals from performance in semi-finals: a) performance in semi-finals is the predictor variable b) performance in the finals is the criterion variable c) there must be a correlation between semi-final and final performances d) all of these are true. 5) The regression line is: a) a) the best fitting straight line through the points in the scattergram b) the best fitting straight line through the points in the scattergram which maximises the deviations from the lines c) the best fitting straight line through the points in the scattergram which minimises the squared deviations from the points d) usually curved. 6. The point at which the regression line cuts the vertical axis is: a) always zero b) is always the average score on the predictor variable

15 c) sometimes positive, sometimes negative d) irrelevant to making the prediction. 7) The point at which the vertical axis is cut by the regression line: a) is a constant; b) only exists for a positive correlation c) is the confidence interval d) is the standard error. 8) The slope of the regression line: a) may be positive or negative b) is the same as the correlation coefficient c) is indeterminate d) all of these. 9. A Pearson product-moment correlation coefficient can be calculated to examine: a) The linear relationship between two categorical variables b) The linear relationship between two continuous variables c) The linear relationship between a continuous variable and a categorical variable d) All of the above 10. A correlation coefficient is: a) Always < 0 b) Always > 0 and < 1 c) Always > 0 d) Always > -1 and < 'The number of words correctly recalled varied significantly according to age'. What kind of relationship is described here? a) Cannot be determined from this description b) A negative correlation c) A positive correlation

16 12. 'A significant relationship was found between neuroticism scores and scores on the happiness scale: those with higher neuroticism scores gained lower scores on the happiness scale'. What kind of relationship is described here? a) A positive correlation b) Cannot be determined from this description c) A negative correlation 13. Find the value of the first-order derivative of the function when x = 9. a) 0.5 b) 1.5 c) 1 d) 0 e) Which one of the following statements describes the shape of the graph of the function? f(x) = 2x 5-3x 4 + 2x 2-17x + 31, at the point, x = -1? a) Tangent is horizontal b) Tangent slopes upwards and graph bends downwards c) Tangent slopes downwards and graph bends downwards d) Tangent slopes upwards and graph bends upwards 15. If the consumption function is C = 0.02Y Y + 25 find the value of Y when MPS = a) 13 b) 26 c) 14 d) Consider the supply equation P = 7 + 2Q2

17 By evaluating the price elasticity of supply at the point P = 105, estimate the percentage increase in supply when the price rises by 7%. a) 4% b) 3.25% c) 3.75% d) 3.5% 17. Which of the following expressions represent the second-order derivative of the function?? a) b) c) d) 18. Differentiation is the process of calculating derivatives, and as you may have already found, using the difference quotient by hand to do these can be a long and involved process. (a) True (b) False 19. The derivative of the product of two functions is the product of their derivatives. (a) True (b) False 20. If and b = 3x 4 y, simplify. a) 6x 3 y 7 b) 3x 3 y 7 c) 6x 5/2 y -3 d) 6x 7/2 y 4 Answers for Self Assessment Questions

18 1. (c) 2.(a) 3.(d) 4.(d) 5.(c) 6. (c) 7.(a) 8.(a) 9.(b) 10.(d) 11. (a) 12.(c) 13.(b) 14.(d) 15.(a) 16. (c) 17.(c) 18.(a) 19.(b) 20.(b) Chapter-5: DECISION THEORY Self Assessment Questions 1. Selling price/unit minus the fixed cost is the a) loss/unit when sales are below the break-even point. b) break-even profit. c) contribution. d) none of the above 2. If fixed costs were to be reduced by half, the break-even point would be a) doubled. b) halved. c) decreased by a factor of 4. d) cannot tell from the information given. 3. Which of the following is not among the reasons for complexity of decisions? a) Decisions have immediate, short-term impact. b) There are many criteria for making choices. c) The manager faces many decisions. d) Experts offer contradictory advice. 4. In our model of decision making under different conditions, what is the difference between risk and uncertainty? a) Under risk, choices are clear and the chances of different outcomes can be measured; under uncertainty, neither applies. b) Under risk, there is a well defined problem; under uncertainty, the definition is unclear. c) Under risk, probabilities can be measured; under uncertainty, they cannot. d) All of the above are correct.

19 5. What most often is the limitation when assessing return using cost benefit analysis: A) Clear identification of the key stakeholders B) Difficulty in quantification C) Identifying objectives of the strategy D) Difficulties in establishing the timescales to be applied 6. Feasibility concerns: A) Whether an organization has the resources to deliver a strategy B) Whether an organization has the competences to deliver a strategy C) Whether an organization has the resources and competences to deliver a strategy D) Whether a strategy meets the expectations of key stakeholders 7. Two useful approaches to assess feasibility in financial terms are: A) Funds flow and break-even analyses B) Ratio analyses and investment appraisal C) Resource deployment and funds flow analyses D) Break-even and ratio analyses 8. An example of information to support tactical management is: a) Electronic Document management system. b) Spreadsheet model of income projections. c) Business intelligence systems. 9. Which type of software is focused on supporting communication, collaboration and coordination? a) E-business software. b) SCM software. c) Groupware. d) None of the above.

20 10. An application used in an organization which runs on a managed server external to the company is best known as: a) bespoke software. b) object-oriented software. c) all of the above. d) an application Service Provider solution. e) packaged software 11. A common assumption about the players in a game is that a) neither player knows the payoff matrix. b) the players have different information about the payoff matrix. c) only one of the players pursues a rational strategy. d) the specific identity of the players is irrelevant to the play of the game. 12. In a zero-sum game, a) what one player wins, the other loses. b) the sum of each player s winnings if the game is played many times must be zero. c) the game is fair each person has an equal chance of winning. d) long-run profits must be zero. 13. The Prisoners Dilemma is not a constant sum game because a) some outcomes are better than others for both players. b) the prisoners sentences are necessarily non-zero. c) the game does not have a Nash equilibrium. d) the sum of the prisoners sentences in non-zero. 14. A payoff matrix specifies the probable value of different alternatives, depending on different possible outcomes associated with each (a) True (b) False 15. A sub game perfect equilibrium is a Nash equilibrium that a) cannot persist through several periods. b) involves only credible threats. c) consists only of dominant strategies. d) is unique. 16. Which of the following is not among the reasons for complexity of decisions?

21 a) The manager faces many decisions. b) Individuals have different risk propensities. c) Experts offer contradictory advice. d) Decisions have immediate, short-term impact. 17. In our model of decision making under different conditions, what is the difference between risk and uncertainty? a) Under risk, probabilities can be measured; under uncertainty, they cannot. b) Under risk, information is reliable; under uncertainty, it is not. c) Under risk, choices are clear and the chances of different outcomes can be measured; under uncertainty, neither applies. d) All of the above are correct. 18. A price leader in the Stackelberg model is assumed to know a) the market demand curve. b) its own cost function. c) its rival s reaction function. d) all of the above. 19. A special DM called nature will be used as a universal way to model uncertainties. (a) True (b) False 20. Which of the following is not an assumption of the classical decision model? a) Objectives are clear and agreed in advance. b) Evaluation criteria are drawn from objectives and the definition of the problem. c) Decision makers behave logically. d) Choice is made once sufficient information on alternatives is available. Answers for Self Assessment Questions 1. (c) 2.(b) 3.(a) 4.(a) 5.(b) 6. (c) 7.(a) 8.(b) 9.(c) 10.(d) 11. (d) 12.(a) 13.(a) 14.(a) 15.(b) 16. (d) 17.(c) 18.(d) 19.(a) 20.(d)

22 Chapter-6: ASSIGNMENT PROBLEMS Self Assessment Questions 1. Which of the following can be modeled as variants of the standard transportation problem? A) The sum of the supplies exceeds the sum of demands. B) A destination has a minimum and maximum demand. C) a. and b. only. D) All can be modeled as a variation of the transportation problem. 2. An assignment problem: A) will always have an integer solution. B) has all supplies and demands equal to 0. C) always has the demand greater than the supply. D) All of the above. 3. Which of the following is an assumption of assignment problems? A) The number of assignees and the number of tasks are the same B) The objective is to minimize the number of assignments not made. C) Each task is to be performed by exactly one assignee. D) a. and c. only. 4. The Hungarian Method is an algorithm used to solve assignment problems. A) True B) False 5. When demand and supply are not equal in a transportation problem then the problem can be reformulated and solved. A) True

23 B) False 6. It is possible to adjust the transportation simplex method to maximize profit instead of minimize cost. A) True B) False 7. Which of the following is needed to use the transportation model? A) Capacity of the sources. B) Demand of the destinations. C) Unit shipping costs. D) All of the above. 8. Which method usually gives a very good solution to the assignment problem? A. northwest corner rule B. Vogel's approximation method C. MODI method D. stepping-stone method E. none of the above 9. In applying Vogel's approximation method to a profit maximization problem, row and column penalties are determined by: A. finding the largest unit cost in each row or column. B. finding the smallest unit cost in each row or column. C. finding the sum of the unit costs in each row or column. D. finding the difference between the two highest unit costs in each row and column. 10. The northwest corner rule requires that we start allocating units to shipping routes in the: middle cell. A. Lower right corner of the table. B. Upper right corner of the table. C. highest costly cell of the table. D. Upper left-hand corner of the table.

24 11. In a transportation problem, when the number of occupied routes is less than the number of rows plus the number of columns -1, we say that the solution is: A. Unbalanced. B. Infeasible. C. Degenerate. D. impossible. 12. The only restriction we place on the initial solution of a transportation problem is that: A. we must have nonzero quantities in a majority of the boxes. B. all constraints must be satisfied. C. demand must equal supply. D. we must have a number (equal to the number of rows plus the number of columns minus one) of boxes which contain nonzero quantities. E. None of the above 13. Which of the following is used to come up with a solution to the assignment problem? A. MODI method B. stepping-stone method C. Hungarian method D. none of the above 14. In converting a greater-than-or-equal constraint for use in a simplex table, we must add A. an artificial variable. B. a slack variable. C. a slack and an artificial variable. D. a surplus and an artificial variable. 15. In converting an equal constraint for use in a simplex table, we must add A. a surplus variable. B. a slack variable. C. a surplus and a slack variable. D. an artificial variable. 16. For a minimization problem using a Simplex table, we know we have reached the optimal solution when the Cj - Zj row A. has no numbers in it.

25 B. has no positive numbers in it. C. has no negative numbers in it. D. has no nonzero numbers in it. E. none of the above 17. In a Simplex table, the pivot row is computed by A. dividing every number in the pivot row by the corresponding number in the profit row. B. dividing every number in the profit row by the pivot number. C. dividing every number in the net profit row by the corresponding number in the gross profit row. D. none of the above. 18. If, when we are using a Simplex table to solve a maximization problem, we find that the ratios for determining the pivot row are all negative, then we know that the solution is A. unbounded. B. infeasible C. degenerate. D. none of the above. 19. A feasible solution requires that all artificial variables is A. greater than zero. B. less than zero. C. equal to zero. D. there are no special requirements on artificial variables; they may take on any value. E. none of the above 20. Iterate between row assignments and column assignments until you have made as many unique assignments as impossible (a) True (b) False

26 Answers for Self Assessment Questions 1. (d) 2.(a) 3.(d) 4.(a) 5.(a) 6. (a) 7.(d) 8.(b) 9.(d) 10.(d) 11. (c) 12.(b) 13.(c) 14.(d) 15.(d) 16. (c) 17.(b) 18.(a) 19.(c) 20.(b) Chapter-7: ASSIGNMENT PROBLEM II Self Assessment Questions 1. There can be no feasible solutions to a problem when the constraints are too restrictive. A) True B) False 2. Interior-point algorithms have unlimited capabilities for what-if analysis. A) True B) False 3. A linear programming problem may not have: A) no optimal solutions. B) exactly two optimal solution. C) as many optimal solutions as there are decision variables. D) None of the above. 4. In a linear programming problem, when the objective function is parallel to one of the constraints, then: A) the solution is not optimal. B) multiple optimal solutions may exists. C) a single corner point solution exists.

27 D) None of the above. 5. If a maximization problem has an objective function of 8x1 + 6x2, which of the following corner points is the optimal solution? A) (0,2). B) (0,3). C) (3,3). D) (4,1). 6. If a minimization problem has an objective function of 2x1 + 5x2, which of the following corner points is the optimal solution? A) (0,2). B) (0,3). C) (3,3). D) (2,0). 7. The simple method does not include which of the following components? A) An initialization step. B) An optimality test. C) A trial step. D) a. and b. only. 8. What is the nature of costs of goods manufactured? A. It is the total manufacturing cost of materials, labor, and overhead incurred during the period. B. It is the total manufacturing cost of materials, labor, and overhead completed during the period. C. It is the total manufacturing cost of materials, labor, and overhead completed and sold during the period. D. It is the total manufacturing cost of materials, labor, and overhead accumulated in work in process inventories at the end of a period.

28 9. If ending Work-in-Process Inventory is understated, A. Finished Goods Inventory will be understated. B. Cost of Goods Sold will be overstated. C. Manufacturing Overhead will be overapplied. D. Cost of Goods Manufactured will be overstated. 10. Which of the following would NOT appear on a Cost of Goods Manufactured statement? A. Raw materials purchased B. Ending work-in-process inventory C. Depreciation on factory D. Finished goods inventory 11. Which one of the following correctly represents the inventory accounts that appear on the balance sheet? A. Raw Materials, Work in Process, Manufacturing Overhead B. Cost of Goods Sold, Work in Process Inventory, Raw Materials Inventory, C. Direct Materials, Work in Process Inventory, Finished Goods D. Work in Process, Finished Goods, Raw Materials 12. The amount transferred from the Work-in-Process Inventory account to Finished A. Goods Inventory is equal to the cost of goods A. Sold during the period B. Completed during the period C. Completed and sold during the period D. Placed in production during the period 13. When the cost of factory supplies is used and an actual cost system is used, which account increases? A. Work-in-process B. Manufacturing overhead C. Supplies expense D. Raw materials 14. Applying a generic minimum cost flow algorithm on this network gives us a solution from which we can derive an optimal assignment. (a) True (b) False

29 15. Tests of an implementation of the described algorithm showed quickly that there are instances of the constrained assignment problem where the algorithm will cycle. (a) True (b) False 16. Which one of the following is the same amount as cost of goods manufactured on the cost of goods manufactured schedule? A. The amount transferred out of Finished Goods Inventory during the year B. The amount transferred out of Raw Materials and the Manufacturing Overhead accounts into Work in Process Inventory during the year C. The amount transferred from Work in Process Inventory to Finished Goods during the period D. The total of direct material, direct labor, and manufacturing overhead which are added to Work in Process during the year 17. Which one of the following would most likely use a process cost system? A. A company which produces television shows B. A home builder which builds custom homes C. The company that produces Chicken of the Sea tuna D. The company that installs security systems in homes 18. Which of the following include manufacturing overhead as a component? A. Work in process, cost of goods sold, finished goods B. Cost of goods sold, raw materials, finished goods C. Finished goods, work in process, raw materials D. Only work in process 19. What does the transfer of direct materials to the production area cause? A. The generation of a purchase order B. An increase in the raw materials account C. An increase to work in process D. A sales invoice to be sent to the customer 20. Which one of the following companies would most likely use process costing? A. Boeing Company B. Chris Craft Boat Company C. Anheuser-Busch Incorporated

30 D. Atlantic Home Builders Answers for Self Assessment Questions 1. (a) 2.(b) 3.(b) 4.(b) 5.(c) 6. (d) 7.(c) 8.(b) 9.(d) 10.(d) 11. (d) 12.(b) 13.(a) 14.(a) 15.(a) 16. (c) 17.(b) 18.(a) 19.(c) 20.(c) Chapter-8: DEMAND FORCASTING Self Assessment Questions 1. Which one of the following does not fall under qualitative forecasting method? a) Moving average methods b) Life cycle analogy c) Delphi method d) Market research 2. For which of the following situation(s) is the market research method of forecasting suitable? a) When a firm is working with stable technology b) When a firm is planning moderate changes on product innovations c) When a firm is market testing one of its new offerings d) when a firm is working with stable technology, planning moderate changes on product innovations or market testing one of its new offerings. 3. Which of the following forecasting method is suitable for launching new products? a) Exponential smoothing b) Judgmental methods c) Causal models d) Moving average methods 4. Which of the following method(s) is(are) suitable for forecasting the demand of a product? a) Delphi method b) Market research c) Judgmental methods d) Delphi method and judgmental method

31 5. What is the measure of forecast error which calculates the average forecast error over n time periods known as? a) Mean-square error b) Mean absolute deviation c) Mean absolute percentage error d) Mean error 6. The measure of forecast error which calculates the average of absolute differences between the actual and the forecast demand over n time periods is known as: a) mean absolute deviation b) mean error c) mean absolute percentage error d) mean-square error 7. The measure of forecast error which calculates the average of square of the forecast errors is known as: a) mean absolute deviation b) mean error c) mean-square error d) mean absolute percentage error 8. Adjustment factor is calculated by taking difference of two chain indices of first month or quarter and dividing it by number of months or number of quarters. (a) True (b) False 9. A six-month moving average forecast is better than a three-month moving average forecast if demand a). is rather stable b). has been changing due to recent promotional efforts c). follows a downward trend d). follows an upward trend 10. Increasing the number of periods in a moving average will accomplish greater smoothing, but at the expense of a) manager understanding b) accuracy

32 c) stability d) responsiveness to changes 11. Which of the following statements comparing the weighted moving average technique and exponential smoothing is true? a) Exponential smoothing is more easily used in combination with the Delphi method. b) More emphasis can be placed on recent values using the weighted moving average. c) Exponential smoothing is considerably more difficult to implement on a computer. d) Exponential smoothing typically requires less record-keeping of past data. 12. Which time series model uses past forecasts and past demand data to generate a new forecast? a) naive b) moving average c) weighted moving average d) exponential smoothing 13. Which is not a characteristic of exponential smoothing? a) smoothes random variations in the data b) easily altered weighting scheme c) weights each historical value equally d) has minimal data storage requirements 14. Which of the following smoothing constants would make an exponential smoothing forecast equivalent to a naive forecast? a) 0 b). 1 divided by the number of periods c) 0.5 d) Qualitative forecasting consists of gathering opinions from a variety of people, then applying their own judgment. (a) True (b) False 16. Log linear and Power function models are often encountered when working with economic and financial data. (a) True (b) False

33 17. Which of the following is not a characteristic of simple moving averages? a) it smoothes random variations in the data b) it has minimal data storage requirements c) it weights each historical value equally d) it smoothes real variations in the data 18. Which time series model below assumes that demand in the next period will be equal to the most recent period's demand? a).naive approach b) moving average approach c) weighted moving average approach d) none of the above 19. The trend line is not worked out by fitting a trend equation to time series data with the aid of an estimation method. (a) True (b) False 20. The measure of forecast error which calculates the average of absolute forecast errors as a percentage of the actual demand is known as: a) mean absolute deviation b) mean absolute percentage error c) mean-square error d) mean error Answers for Self Assessment Questions 1. (a) 2.(d) 3.(b) 4.(d) 5.(c) 6. (c) 7.(c) 8.(b) 9.(a) 10.(d) 11. (d) 12.(d) 13.(d) 14.(c) 15.(a) 16. (a) 17.(b) 18.(a) 19.(b) 20.(b)

34 Chapter-9: INVENTORY MODEL Self Assessment Questions 1. Which of the following is a function of inventory? a. to decouple or separate parts of the production process b. to provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts d. all of the above are functions of inventory 2. Which of the following would not generally be a motive for a firm to hold inventories? a. to decouple or separate parts of the production process b. to provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts d. to minimize holding costs 3. All of the following statements about ABC analysis are true except a. inventory may be categorized by measures other than dollar volume b. it categorizes on-hand inventory into three groups based on annual dollar volume c. it is an application of the Pareto principle d. it states that all items require the same degree of control 4. ABC analysis is based upon the principle that a. all items in inventory must be monitored very closely b. there are usually a few critical items, and many items which are less critical

35 c. an item is critical if its usage is high d. the safety stock in terms of volume should be higher for A items than for C items 5. ABC analysis divides on-hand inventory into three classes, generally based upon a. item quality b. unit price c. the number of units on hand d. annual dollar volume 6. Cycle counting a. is a process by which inventory records are verified once a year b. provides a measure of inventory accuracy c. provides a measure of inventory turnover d. assumes that all inventory records must be verified with the same frequency 7. Among the advantages of cycle counting is that it a. does not need to be performed for less expensive items b. does not require the detailed inventory records necessary when annual physical inventory is used c. does not require highly trained people d. allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory 8. The two most basic inventory questions answered by the typical inventory model are a. timing and cost of orders b. quantity and cost of orders c. timing and quantity of orders d. order quantity and service level

36 9. A certain type of computer costs $1,000, and the annual holding cost is 25%. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity? a. 70 b. 110 c. 250 d. 12, Most inventory models attempt to minimize a. the likelihood of a stock out b. the number of items ordered c. total inventory based costs d. the number of orders placed 11. Which would be the most appropriate method of controlling stock in a retail shop? a. Order Point b. Materials Requirements Planning c. Periodic Review d. Two-Bin System 12. The EOQ model with quantity discounts attempts to determine a. what is the lowest amount of inventory necessary to satisfy a certain service level b. what is the lowest purchasing price c. whether to use fixed-quantity or fixed period order policy d. how many units should be ordered 13. An inventory decision rule states "when the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered." Which of the following statements is true?

37 a. 100 is the reorder point, and 14 is the order quantity. b. 14 is the reorder point, and 100 is the order quantity. c. The number 100 is a function of demand during lead time. d. 14 is the safety stock, and 100 is the reorder point. 14. Which of the following statements regarding the Production Order Quantity model is true? a. It applies only to items produced in the firm's own production departments. b. It relaxes the assumption that all the order quantity is received at one time. c. It relaxes the assumption that the demand rate is constant. d. It minimizes the total production costs The Production Order Quantity model a. relaxes the assumption of known and constant demand b. uses Ordering Cost, not Setup Cost, in its formula c. is appropriate when units are sold/used as they are produced d. results in larger average inventory than an equivalent EOQ model 16. When quantity discounts are allowed, the cost-minimizing order quantity a. minimizes the sum of holding and ordering costs b. minimizes the unit purchase price c. may be a quantity below that at which one qualifies for that price d. minimizes the sum of holding, ordering, and product costs 17. The emphasis of ABC analysis technique is that the management should concentrate its energy in controlling those items that mostly affect the organizational objects. (a) True (b) False 18. A warehouse may have more than one locator. Each Locator has up to five user-defined dimensions such as aisle, bin, rack, level, bay, etc. (a) True (b) False

38 19. is that material which cannot be easily identified and related with a particular product, job, and process. Stores and material are used interchangeably. a. Indirect material b. Product material c. Product catalog d. None of these 20. Shortage costs is the components of determine portability. (a) True (b) False Answers for Self Assessment Questions 1. (d) 2.(d) 3.(d) 4.(b) 5.(d) 6. (b) 7.(d) 8.(c) 9.(b) 10.(c) 11. (c) 12.(d) 13.(b) 14.(b) 15.(c) 16. (d) 17.(a) 18.(a) 19.(a) 20.(a) Chapter-10: SIMULATION Self Assessment Questions 1. Which of the following are advantages of simulation? a) Simulation allows "what-if?" type of questions. b) Simulation can usually be performed by hand or using a small calculator. c) Simulation does not interfere with the real-world system. d) (a)and (c) only 2. The first step in simulation is to a) set up possible courses of action for testing. b) construct a numerical model. c) validate the model. d) define the problem. 3. Which of the following are disadvantages of simulation?

39 a) inability to analyze large and complex real-world situations b) "time compression" capability c) is not usually easily transferable to other problems d) all of the above 4. The first step in the Monte Carlo simulation process is to a) generate random numbers. b) set up cumulative probability distributions. c) establish random number intervals. d) set up probability distributions. 5. Cumulative probabilities are found by a) summing all the probabilities associated with a variable. b) simulating the initial probability distribution. c) summing all the previous probabilities up to the current value of the variable. d) none of the above 6. If we are going to simulate an inventory problem, we must a) run the simulation for many days. b) run the simulation for many days many times, i.e., using multiple sets of random numbers. c) run the simulation many times, i.e., using multiple sets of random numbers. d) none of the above 7. From a practical perspective, if we have a waiting line problem for which the Poisson and negative exponential distributions do not apply, and we desire a reasonably accurate solution, we should a) modify the queuing equations to make them appropriate for our problem. b) use simulation. c) use the simple queuing equations even though we realize they are inappropriate. d) none of the above 8. All of the following are various ways of generating random numbers except a) table of random numbers b) spin of roulette wheel c) computer-generated random numbers d) Fibonacci series

40 9. The three types of mathematical simulation models are a) operational gaming, Monte Carlo, systems simulation. b) Monte Carlo, queuing, maintenance policy. c) Monte Carlo, systems simulation, computer gaming. d) none of the above 10. Simulation should be thought of as a technique for a) increasing one's understanding of a problem. b) obtaining a relatively inexpensive solution to a problem. c) obtaining an optimal solution to a problem. d) none of the above 11. One use of inventory is a) to decouple production and distribution processes b) to provide a hedge against inflation c) to enable an organization to take advantage of quantity discounts d) all of the above are uses of inventory 12. ABC analysis divides an organization's on-hand inventory into three classes based upon a) unit price b) the number of units on hand c) annual demand d) annual dollar values 13. Cycle counting a) provides a measure of inventory turnover b) assumes that all inventory records must be verified with the same frequency c) is a process by which inventory records are periodically verified d) all of the above 14. The major advantage of cycle counting is a) accurate inventory b) dispensing with the annual physical inventory c) the audit activity that accompanies cycle counting d) ABC analysis

41 15.The difference(s) between the basic EOQ model and the production order quantity model is (are) that a) the production order quantity model does not require the assumption of known, constant demand b) the EOQ model does not require the assumption of known, constant lead time c) the production order quantity model does not require the assumption of instantaneous delivery d) all of the above 16.Extra units that are held in inventory to reduce stockouts are called [Hint] a) reorder point b) safety stock c) just-in-time inventory d) all of the above 17. Inventory record accuracy can be improved by [Hint] a) cycle counting b) reorder points c) ABC analysis d) all of the above 18. The two most important inventory-based questions answered by the typical inventory model are [Hint] a) when to place an order and what is the cost of the order b) when to place an order and how many of an item to order c) how many of an item to order and what is the cost of this order d) how many of an item to order and with whom the order should be placed 19. An appropriate technique for the control of inventory in services is [Hint] a) good personnel selection, training and discipline b) tight control of incoming shipments c) effective control of all goods leaving the facility d) all of the above 20. In the probabilistic model, increasing the service level will [Hint] a) reduce the cost of the inventory policy

42 b) increase the cost of the inventory policy c) have no impact on the cost of the inventory policy d) cannot be determined Answers for Self Assessment Questions 1. (d) 2.(d) 3.(c) 4.(d) 5.(c) 6. (b) 7.(b) 8.(d) 9.(a) 10.(a) 11. (d) 12.(d) 13.(c) 14.(b) 15.(c) 16. (b) 17.(d) 18.(b) 19.(d) 20.(b)