Question Question 1 In an unbalanced transportation model supply does not equal demand and one set of constraints uses ? signs. Answer True False Question 2 A cycle is an up and down movement in demand that repeats itself in less than 1 year. Answer True False Question 3 Excel can be used to simulate systems that can be represented by both discrete and continuous random variables. Answer True False Question 4 Validation of a simulation model occurs when the true steady state average results have been reached. Answer True False Question 5 In a total integer model all decision variables have integer solution values. Answer True False Question 6 Adjusted exponential smoothing is an exponential smoothing forecast adjusted for seasonality. Answer True False Question 7 Using the maximin criterion to make a decision you Answer Construct a table of regrets. Look at the maximum regret for each decision. Select the decision with the smallest maximum regret. Look at the worst payoff for each possible decision and select the decision with the largest worst payoff Look at the best payoff for each possible decision and select the decision with the largest best payoff Consult an astrological table to forecast the state of nature Question 8 In linear programming problems multiple optimal solutions occur Answer when constraint lines are parallel to each other. when the objective function is parallel to a constraint line every possible solution point violates at least one constraint when the dual price for a particular resource is very small Question 9 Events that cannot occur at the same time in any trial of an experiment are: Answer exhaustive dependent independent mutually exclusive Question 10 A business owner is trying to decide whether to buy rent or lease office space and has constructed the following payoff table based on whether business is brisk or slow. (chart would not copy/paste) If the probability of brisk business is .40 and for slow business is .60 the expected value of perfect information is: Answer 12 55 57 Question 11 A business owner is trying to decide whether to buy rent or lease office space and has constructed the following payoff table based on whether business is brisk or slow. (chart would not copy/paste) The conservative (maximin) strategy is: Answer Buy Rent Lease Brisk. Question 12 Steinmetz furniture buys 2 products for resale: big shelves (B) and medium shelves (M). Each big shelf costs $100 and requires 100 cubic feet of storage space and each medium shelf costs $50 and requires 80 cubic feet of storage space. The company has $25000 to invest in shelves this week and the warehouse has 18000 cubic feet available for storage. Profit for each big shelf is $85 and for each medium shelf is $75. What is the constraint on money to invest? Answer Max Z = 85B + 75M 100B + 50M ? 25000 100B + 50M ? 25000 100B + 80M = 18000 Question 13 Steinmetz furniture buys 2 products for resale: big shelves (B) and medium shelves (M). Each big shelf costs $100 and requires 100 cubic feet of storage space and each medium shelf costs $50 and requires 80 cubic feet of storage space. The company has $25000 to invest in shelves this week and the warehouse has 18000 cubic feet available for storage. Profit for each big shelf is $85 and for each medium shelf is $75. What is the storage space constraint? Answer Max Z = 75B + 85M 100B + 50M ? 25000 100B + 80M ? 18000 100B + 80M = 18000 Question 14 The production manager for Beer etc. produces 2 kinds of beer: light (L) and dark (D). Two resources used to produce beer are malt and wheat. He can obtain at most 4800 oz of malt per week and at most 3200 oz of wheat per week respectively. Each bottle of light beer requires 12 oz of malt and 4 oz of wheat while a bottle of dark beer uses 8 oz of malt and 8 oz of wheat. Profits for light beer are $2 per bottle and profits for dark beer are $1 per bottle. What is the optimal weekly profit? Answer $1000 $900 $800 $700 Question 15 Given the following linear programming problem that minimizes cost. Min Z = 2x + 8y Subject to 8x + 4y ? 64 2x + 4y ? 32 y ? 2 What is the sensitivity range for the third constraint y ? 2? Answer 0 to 4 2 to 5.33 0 to 5.33 4 to 6.33 Question 16 In a portfolio problem X1 X2 and X3 represent the number of shares purchased of stocks 1 2 an 3 which have selling prices of $15 $47.25 and $110 respectively. The investor has up to $50000 to invest. The investor stipulates that stock 1 must not account for more than 35% of the number of shares purchased. Which constraint is correct? Answer X1 ? 0.35 X1 = 0.35 (50000) X1 ? 0.35(X1 + X2 +.X3) X1 = 0.35(X1 + X2 +.X3) Question 17 In a portfolio problem X1 X2 and X3 represent the number of shares purchased of stocks 1 2 an 3 which have selling prices of $15 $47.25 and $110 respectively. The investor has up to $50000 to invest. An appropriate part of the model would be Answer 15X1 + 47.25X2 +110 X3 ? 50000 MAX Z =15X1 + 47.25X2 + 110X3 X1 + X2 +X3 ? 50000 MAX Z = 50(15)X1 + 50 (47.25)X2 + 50 (110)X3 Question 18 In a capital budgeting problem if either project 1 or project 2 is selected then project 5 cannot be selected. Which of the alternatives listed below correctly models this situation? Answer x1 + x2 + x5 ? 1 x1 + x2 + x5 ?1 x1 + x5 ? 1 x2 + x5 ? 1 x1 – x5 ? 1 x2 – x5 ? 1 Question 19 The Kirschner Company has a contract to produce garden hoses for a customer. Kirschner has 5 different machines that can produce this kind of hose. Write the constraint that indicates they have to use at least three of the five machines in their production. Answer Y1 + Y2 + Y3 + Y4 + Y5 ? 3 Y1 + Y2 + Y3 + Y4 + Y5 = 3 Y1 + Y2 + Y3 + Y4 + Y5 ? 3 none of the above Question 20 The following table represents the cost to ship from Distribution Center 1 2 or 3 to Customer A B or C. (chart would not copy/paste) The constraint that represents the quantity demanded by Customer B is: Answer 6X1B + 2X2B + 8X3B ? 350 6X1B + 2X2B + 8X3B = 350 X1B + X2B + X3B ? 350 X1B + X2B + X3B = 350 Question 21 A professor needs help from 3 student helpers to complete 4 tasks. The first task is grading; the second is scanning; the third is copying and the fourth is organizing student portfolios. The estimated time for each student to do each task is given in the matrix below. (chart would not copy/paste) Which of the following constraints represents the assignment for student A? Answer XA1 +XA2 + XA3 + XA4 = 0 XA1 +XA2 + XA3 + XA4 = 1 XA1 +XA2 + XA3 + XA4 ? 1 XA1 +XA2 + XA3 + XA4 ? 0 Question 22 Assume that it takes a college student an average of 5 minutes to find a parking spot in the main parking lot. Assume also that this time is normally distributed with a standard deviation of 2 minutes. What percentage of the students will take between 2 and 6 minutes to find a parking spot in the main parking lot? Answer 11.13% 47.72% 43.32% 62.47% Question 23 Professor Dewey would like to assign grades such that 15% of students receive As. If the exam average is 62 with a standard deviation of 13 what grade should be the cutoff for an A? (Round your answer.) Answer 75 79 84 88 Question 24 Consider the following graph of sales. (graph would not copy/paste) Which of the following characteristics is exhibited by the data? Answer Trend only Trend plus seasonal Trend plus irregular Seasonal Question 25 __________ moving averages react more slowly to recent demand changes than do __________ moving averages. Answer Longer-period shorter-period Shorter-period longer-period Longer-period longer-period Shorter-period shorter-period Question 26 A bakery is considering hiring another clerk to better serve customers. To help with this decision records were kept to determine how many customers arrived in 10-minute intervals. Based on 100 ten-minute intervals the following probability distribution and random number assignments developed. Number of Arrivals Probability Random numbers 6 .1 .01 – .10 7 .3 .11 – .40 8 .3 .41 – .70 9 .2 .71 – .90 10 .1 .91 – .00 Suppose the next three random numbers were .18 .89 and .67. How many customers would have arrived during this 30-minute period? Answer 23 24 22 25 Question 27 In the Monte Carlo process values for a random variable are generated by __________ a probability distribution. Answer sampling from running integrating implementing Question 28 Suppose that a production process requires a fixed cost of $50000. The variable cost per unit is $10 and the revenue per unit is projected to be $50. Find the break-even point. Answer Question 29 Nixon?s Bed and Breakfast has a fixed cost of $5000 per month and the revenue they receive from each booked room is $200. The variable cost per room is $75. How many rooms do they have to sell each month to break even? (Note: The answer is a whole number. Give the answer as a whole number omitting the decimal point. For instance use 12 for twelve rooms). Answer Question 30 Students are organizing a “Battle of the Bands” contest. They know that at least 100 people will attend. The rental fee for the hall is $200 and the winning band will receive $500. In order to guarantee that they break even how much should they charge for each ticket? (Note: Write your answer with two significant places after the decimal and do not include the dollar ?$? sign. For instance for five dollars write your answer as 5.00). Answer Question 31 Tracksaws Inc. makes tractors and lawn mowers. The firm makes a profit of $30 on each tractor and $30 on each lawn mower and they sell all they can produce. The time requirements in the machine shop fabrication and tractor assembly are given in the table. (chart would not copy/paste) Formulation: Let x = number of tractors produced per period y = number of lawn mowers produced per period MAX 30x + 30y subject to 2 x + y ? 60 2 x + 3y ? 120 x ? 45 x y ? 0 The graphical solution is shown below. (graph would not copy/paste) What is the shadow price for assembly? Write your answers with two significant places after the decimal and do not include the dollar ?$? sign. Answer Question 32 Tracksaws Inc. makes tractors and lawn mowers. The firm makes a profit of $30 on each tractor and $30 on each lawn mower and they sell all they can produce. The time requirements in the machine shop fabrication and tractor assembly are given in the table. (chart would not copy/paste) Formulation: Let x = number of tractors produced per period y = number of lawn mowers produced per period MAX 30x + 30y subject to 2 x + y ? 60 2 x + 3y ? 120 x ? 45 x y ? 0 The graphical solution is shown below. (graph would not copy/paste) What is the shadow price for fabrication? Write your answers with two significant places after the decimal and do not include the dollar ?$? sign. Answer Question 33 Klein Kennels provides overnight lodging for a variety of pets. An attractive feature is the quality of care the pets receive including well balanced nutrition. The kennel?s cat food is made by mixing two types of cat food to obtain the ?nutritionally balanced cat diet.? The data for the two cat foods are as follows: Cat Food Cost/oz protien (%) fat (%) Partner’s Choice $0.20 45 20 Feline Excel $0.15 15 30 Klein Kennels wants to be sure that the cats receive at least 5 ounces of protein and at least 3 ounces of fat per day. What is the optimal cost of this plan? Note: Please write your answers with two significant places after the decimal and do not include the dollar ?$? sign. For instance $9.45 (nine dollars and fortyfive cents) should be written as 9.45 Answer Question 34 Find the optimal Z value for the following problem. Do not include the dollar ?$? sign with your answer. Max Z = x1 + 6×2 Subject to: 17×1 + 8×2 ? 136 3×1 + 4×2 ? 36 x1 x2 ? 0 and integer Answer Question 35 A life insurance company wants to update its actuarial tables. Assume that the probability distribution of the lifetimes of the participants is approximately a normal distribution with a mean of 68 years and a standard deviation of 4 years. What proportion of the plan participants are expected to survive to see their 75th birthday? Note: Round your answer if necessary to two places after the decimal. Please express your answer with two places after the decimal. Answer Question 36 Ms. Hegel is considering four different opportunities A B C or D. The payoff for each opportunity will depend on the economic conditions represented in the payoff table below. Investment Economic Conditions Poor (S1) Average (S2) Good (S3) Excellent (S4) A 80 15 18 47 B 50 75 35 35 C -90 225 -50 12 D 36 25 25 27 Suppose all states of the world are equally likely (each state has a probability of 0.25). What is the expected value of perfect information? Note: Report your answer as an integer rounding to the nearest integer if applicable Answer Question 37 The local operations manager for the IRS must decide whether to hire 1 2 or 3 temporary workers. He estimates that net revenues will vary with how well taxpayers comply with the new tax code. The probabilities of low medium and high compliance are 0.20 0.30 and 0.50 respectively. What are the expected net revenues for the number of workers he will decide to hire? The following payoff table is given in thousands of dollars (e.g. 50 = $50000). Note: Please express your answer as a whole number in thousands of dollars (e.g. 50 = $50000). Round to the nearest whole number if necessary. (chart would not copy/paste) Answer Question 38 The local operations manager for the IRS must decide whether to hire 1 2 or 3 temporary workers. He estimates that net revenues will vary with how well taxpayers comply with the new tax code. The probabilities of low medium and high compliance are 0.20 0.30 and 0.50 respectively. What is the expected value of perfect information? Do not include the dollar ?$? sign with your answer. The following payoff table is given in thousands of dollars (e.g. 50 = $50000). Note: Please express your answer as a whole number in thousands of dollars (e.g. 50 = $50000). Round to the nearest whole number if necessary. (chart would not copy/paste) Answer Question 39 The following sales data are available for 2003-2008 : Year Sales Forecast 2003 7 7 2004 8 8.5 2005 12 10.5 2006 14 13 2007 16 15 2008 18 16 Calculate the MAPD and express it in decimal notation. Please express the result as a number with 4 decimal places. If necessary round your result accordingly. For instance 9.14677 should be expressed as 9.1468 Answer Question 40 Consider the following decision tree. The objective is to choose the best decision among the two available decisions A and B. Find the expected value of the best decision. Do not include the dollar ?$? sign with your answer. (graph would not copy/paste) Answer

# MAT 540/MAT540 Week 11 Final Exam

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