1. If all the variables in a model are under the control of the decision maker, then the model is considered to be (Points : 3)

probabilistic

random

mathematical

schematic

deterministic

2. A decision model has the following input variables: Historical sales data; and historical advertising budget. This model is considered to be probabilistic. (Points : 3)

True

False

3. If all the values of the input variables in a decision model are known with certainty, then the model is considered to be deterministic. (Points : 3)

True

False

4. Which of the following variables is considered to be qualitative? (Points : 3)

annual sales

earnings per share

age

method of payment (e.g., cash or credit card)

price

5. Suppose that the breakeven point (BEP) for a given product is 200 units. This means that if 198 units are produced, then this product is not profitable. (Points : 3)

True

False

6. Determining how much the solution will change if there are changes in the input data is part of (Points : 3)

model formulation

model solution

model interpretation

model development

model assessment

7. The ABC Corporation is considering introducing a new product, which will require buying new equipment for a monthly payment of $5,000. Each unit produced can be sold for $20.00. ABC incurs a variable cost of $10.00 per unit. Suppose that ABC would like to realize a monthly profit of $50,000. How many units must they sell each month to realize this profit? (Points : 3)

500 units

450 units

4500 units

5000 units

5500 units

8. Which of the following is an equation to determine the break-even point (BEP) in units? (Points : 3)

BEP = Fixed cost/Selling price per unit - Variable cost per unit

BEP = Fixed cost/(Selling price per unit - Variable cost per unit)

BEP = Variable cost/(Selling price per unit - Fixed cost)

BEP = Variable cost/(Fixed cost - selling price per unit)

BEP = Fixed cost/Selling price per unit + Variable cost per unit

9. Which of the following is an equation to determine the break-even point in dollars? (Points : 3)

(BEP) * (total variable cost)

(BEP) * (variable cost per unit)

(BEP) / (selling price)

(BEP) * (selling price) / (variable cost per unit)

(BEP) * (selling price)

10. Which of the following variables is considered random or probabilistic? (Points : 3)

future interest rates

last year's advertising budget

last week's sales data

historical stock prices

historical interest rates

11. If a decision model has one variable with a certain/deterministic input value and another variable with a random/probabilistic input, then the outcome of this model which is based on both variables will be probabilistic. (Points : 3)

True

False

12. Suppose that the breakeven point (BEP) for a product is 300 units. This means if 310 units are produced, then this product is profitable. (Points : 3)

True

False

13. At the Breakeven Point (BEP), total profit is typically greater than zero. (Points : 3)

True

False

14. Acquiring input data is part of (Points : 3)

model solution

model formulation

model interpretation

model testing

model identification

15. An isoprofit line represents a line whereby all profits are the same along the line. (Points : 3)

True

False

16. Refer to Figure 1. What cell reference designates the Target Cell in "Solver"?

Figure 1:

(Points : 3)

E4

B3

C3

D8:D10

E8:E10

17. If an isoprofit line can be moved outward such that the objective function value can be made to reach infinity, then this problem has an unbounded solution. (Points : 3)

True

False

18. When using Solver, the parameter Changing Cells is typically associated with the objective function. (Points : 3)

True

False

19. Consider the following linear programming model:

Max X12 + X2 + 3X3

Subject to:

X1 + X2 3

X1 + X2 1

X1, X2 0

This problem violates which of the following assumptions? (Points : 3)

certainty

proportionality

divisibility

linearity

integrality

20. When using Solver, the parameter Set Target Cell is typically associated with decision variables. (Points : 3)

True

False

21. Consider the following linear programming model

Max 2X1 + 3X2

Subject to:

X1 + X2 4

X1 2

X1, X2 0

This linear programming model has (Points : 3)

redundant constraints

infeasible solution

alternate optimal solution

unique solution

unbounded solution

22. A linear programming model generates an optimal solution with fractional values. This solution satisfies which basic linear programming assumption? (Points : 3)

certainty

divisibility

proportionality

linearity

non-negativity

23. If a linear programming problem has alternate optimal solutions, then the objective function value will vary according to each alternate optimal point (Points : 3)

True

False

24. It is possible to solve graphically a linear programming model with 4 decision variables. (Points : 3)

True

False

25. The constraint for a given resource is given by the following equation:

2X1 + 3X2 20

If X1 = 5 and X2 = 4 how many units of this resource are unused? (Points : 3)

20

2

22

0

9

26. A linear programming model has the following two constraints: X1 3 and X1 4. This model has a redundant constraint. (Points : 3)

True

False

27. Consider the following linear programming model:

Min 2X1 + 3X2

Subject to:

X1 + 2X2 1

X2 1

X1 0, X2 0

This problem violates which of the following assumptions? (Points : 3)

additivity

divisibility

non-negativity

proportionality

linearity

28. In a multi-period production scheduling application, the decision variables typically designate (Points : 3)

the number of units to produce in a given period

minimizing inventory and production costs

the number of units held in inventory in a given period

the number of inventory units to produce in a given period

number of units to produce in a given period, along with the number of units to hold in inventory at the end of each period

29. Consider the following linear programming problem and its associated spreadsheet model.

Which equation should be entered in cell F8 to compute the amount by which the minimal requirement of constraint #3 has been exceeded? (Points : 3)

=SUMPRODUCT(B2:C2,D3:E3)

D8 - E8

E8 - D8

F8 - E8

E8 - F8

30. Production, inventory, and demand are typical decision variables in a production scheduling, multi-period linear programming application. (Points : 3)

True

False

31. The "Transportation" problem involves determining the amount of goods to be transported from a number of origins to a number of destinations. (Points : 3)

True

False

32. Alternate optimal solutions are not common in linear programming applications. (Points : 3)

True

False

33. A company produces two products, X1, and X2. The constraint that illustrates the consumption of a given resource in making the two products is given by: 2X1+3X2 10. This relationship implies that each unit of X1 consumes 3 units of that resource. (Points : 3)

True

False

34. The non-negativity constraint can be specified in "Solver" by (Points : 3)

checking the "Assume Non-Negative" check box in the "Options" tab.

creating a separate constraint to ensure that all the decision variables are greater than or equal to zero.

checking the "Assume Linear Model" option.

a and b only

all of these

35. The "Sinking Fund" problem can be classified as a multi-period linear programming application. (Points : 3)

True

False

36. The "Portfolio Selection" problem may be viewed as a "product mix" application. (Points : 3)

True

False

37. Which of the following linear programming applications can be viewed as a generalized product mix problem? (Points : 3)

media selection

portfolio selection

make-buy decision problem

media selection and portfolio selection only

all of these

38. Consider the following constraint: X140. This implies that at most 40 units of product X1 can be produced. (Points : 3)

True

False

39. When setting up linear programming models in Excel, the right-hand side of constraints may include decision variables and constants. (Points : 3)

True

False

40. In a multi-period production scheduling application, the decision choices in later periods are directly dependent on the decision made in earlier periods. (Points : 3)

True

False

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