1. are generally independent of the volume of units produced and sold. a. Fixed costs b. Variable costs c. Profits d.

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1 Final Exam Introduction to Management Sciences Instructor: G. V. Johnson December 17, :30 p.m. to 3:30 p.m. Room University Centre Seats Paper No. 492 Model Building: Break-Even Analysis 1. are generally independent of the volume of units produced and sold. a. Fixed costs b. Variable costs c. Profits d. all of the above A Maximization Model Example 2. Non-negativity constraints restrict the decision variables to a. 0 b. positive values c. negative values d. a and b Sensitivity Analysis 3. Mallory furniture buys 2 products for resale: big shelves (b) and medium shelves (m). Each big shelf costs $500 and requires 100 cubic feet of storage space, and each medium shelf costs $300 and requires 90 cubic feet of storage space. The company has $75,000 to invest in shelves this week, and the warehouse has 18,000 cubic feet available for storage. Profit for each big shelf is $300 and for each medium shelf is $150. What is the maximum profit? a. $25,000 b. $35,000 c. $45,000 d. $55,000 A Multiperiod Scheduling Example 4. Defining decision variables is the step in systematic model formulation. a. fourth b. third c. second d. first

2 Page 2 Integer Programming Graphical Solution 5. The linear programming relaxation contains the objective function and of the integer programming problem, but drops all integer restrictions. a. different variables b. slack values c. constraints d. decision variables The Transportation Model 6. In a transportation problem, items are allocated from sources to destinations a. at a maximum cost b. at a minimum cost c. at a minimum profit d. at a minimum revenue 7. Which of the following are assumptions or requirements of the transportation problem? a. Minimum quantities must be shipped. b. Shipping costs per unit do not vary with the quantity shipped. c. There can only be one source. d. all of the above The Shortest Route Problem 8. The first step in the shortest route solution method is to a. select the node with the shortest direct route from the origin b. determine all nodes directly connected to the permanent set nodes c. establish a permanent set with the origin node d. make sure that all nodes have joined the permanent set 9. The last step in the shortest route solution method is to a. select the node with the shortest direct route from the origin b. determine all nodes directly connected to the permanent set nodes c. establish a permanent set with the origin node d. make sure that all nodes have joined the permanent set The Minimal Spanning Tree Problem 10. The minimal spanning tree problem determines the a. minimum amount that should be transported along any one path b. maximum amount that can be transported along any one path c. shortest distance between a source node and a destination node d. minimum total branch lengths connecting all nodes in the network

3 Page The minimal spanning tree problem determines the minimum total branch lengths connecting all in the network. a. nodes b. arcs c. connections d. connectors The Maximal Flow Problem 12. The objective of the maximal flow solution approach is to a. maximize resource allocation b. maximize the total amount of flow from an origin to a destination c. determine the longest distance between an originating point and one or more destination points d. determine the shortest distance between an originating point and one or more destination points The Elements of Project Management 13. Once a project is underway, the project manager is responsible for the a. people b. cost c. time d. all of the above 14. Elements of project planning are a. hire personnel b. divide up the work load c. account for project funds d. define project objectives The Project Network 15. Project management differs from management for more traditional activities mainly because of a. its limited time frame b. its unique set of activities c. a and b d. none of the above 16. is the latest time an activity can start without delaying critical path time. a. EL b. ES c. EF d. LS Forecasting Components 17. Random variations are movements that are a. not predictable b. not following a pattern c. none of the above d. all of the above

4 Page 4 Time Series Methods 18. The closer beta is to, the stronger a trend is reflected. a. -1 / 1 b. -1 c. 0 d. 1 Model Building: Break-Even Analysis 19. A newly opened bed-and-breakfast projects the following: Monthly fixed costs $6000 Variable cost per occupied room per night $20 Revenue per occupied room per night $75 If there are 12 guest rooms available, what percentage of rooms would have to be occupied, on average, to break even? Computer Solution 20. If the original amount of a resource is 8, and the range of feasibility for it can increase by 2, then the amount of the resource can increase to what amount? Sensitivity Analysis 21. Mallory furniture buys 2 products for resale: big shelves (b) and medium shelves (m). Each big shelf costs $500 and requires 100 cubic feet of storage space, and each medium shelf costs $300 and requires 90 cubic feet of storage space. The company has $75,000 to invest in shelves this week, and the warehouse has 18,000 cubic feet available for storage. Profit for each big shelf is $300 and for each medium shelf is $150. What is the storage space constraint? A Marketing Example 22. The owner of Chips etc. produces 2 kinds of chips: Lime (L) and Vinegar (V). He has a limited amount of the 3 ingredients used to produce these chips available for his next production run: 4800 ounces of salt, 9600 ounces of flour, and 200 ounces of herbs. A bag of Lime chips requires 2 ounces of salt, 6 ounces of flour, and 1 ounce of herbs to produce; while a bag of Vinegar chips requires 3 ounces of salt, 8 ounces of flour, and 2 ounces of salt. Profits for a bag of Lime chips are $0.40, and for a bag of Vinegar chips $0.50. For the production combination of 800 bags of Lime and 600 bags of Vinegar, which resource is slack?

5 Page 5 Computer Solution of a Transportation Problem 23. SS DD How many supply-side constraints are there? 24. SS DD What are the demand-side constraints? The Project Network 25. Given the following data for a project network: Events (nodes) Times (weeks) Most Activity Start Finish Optimistic Likely Pessimistic A B C D E F G H What are the estimated expected mean times (in weeks) for activities A- H?

6 Page Given the following data for a project network: Events (nodes) Times (weeks) Most Activity Start Finish Optimistic Likely Pessimistic A B C D E F G H What is the critical path for this project network? Time Series 27. Given the following data on hotel check-ins for a 6-month period: July: 70 rooms August: 105 rooms September: 90 rooms October: 120 rooms November: 110 rooms December: 115 rooms What is the 3-month moving average for January? 28. Given the following data on the number of pints of ice cream sold at a local ice cream store for a 6-period time frame: Period Demand Compute a 3-period moving average for period 4. Forecast Accuracy 29. If the forecast is 33 and the actual value is 44, then the error this period is 30. If the absolute errors were calculated for 5 periods and the sum of the absolute deviation is 60, what is the value of the MAD?

7 Page 7 The Management Science Approach to Problem Solving 31. A management science technique usually applies to a specific model type. Characteristics of Linear Programming Problems 32. Linear programming models have an objective function to be minimized but not maximized. 33. In the graphical approach, once the feasible solution area and the optimal solution point have been determined from the graph, simultaneous equations are solved to determine the values of x1 and x2 at the solution point. Sensitivity Analysis 34. Sensitivity analysis is the analysis of the effect of parameter changes on the optimal solution. A Blend Example 35. The shadow price is the marginal economic value of one additional unit of a resource. Integer Programming Models 36. In a total integer model, some solution values for decision variables are integer and others can be non-integer. Integer Programming Graphical Solution 37. Rounding integer solution values up to the nearest integer value will still result in a feasible solution.

8 Page 8 Network Components 38. Networks are popular because they provide a picture of a system and because a large number of systems can be easily modeled as networks. The Minimal Spanning Tree Problem 39. The third step of the minimal spanning tree solution method is to select the node closest to the starting node to join the spanning tree. 40. In a minimal spanning tree, all nodes in a network are connected. The Maximal Flow Problem 41. The first step of the maximal flow solution method is to arbitrarily select any path in the network from origin to destination. The Shortest Route Problem 42. The shortest route problem is to find the shortest distance between an origin and various destination points. The Elements of Project Management 43. Comparing project schedule objectives is an element of project planning. 44. Identifying activities is an element of project planning. 45. Establishing precedence relationships is an element of project planning.

9 Page Accounting for project funds is an element of project planning. Forecasting Components 47. A trend is a gradual, long-term, up or down movement of demand. 48. Regression methods are the most common type of forecasting method for the long-term strategic planning process. Time Series Methods 49. Time series methods relate the forecast to time as the only factor. 50. Longer-period moving averages react more slowly to recent demand changes than do shorter-period moving averages.