Name:___________________ Section:___________________

Exam I BA 301 Spring 2002 S.K. Norman

WHITE

Exam I Select the best answer. 2 Points each. 1.

Spring 2002

What combination of x and y will yield the optimum for this problem? Maximize $ x ! $1"y# sub$ect to %1& 2x ! 'y ( 12 and %2& "x ! 2y ( 1). %*ou do +,- need to .raph this in order to answer.& a. x / 2# y / ) b. x / )# y / c. x / )# y / ) d. x / 1# y / " e. none of the abo0e 1n linear pro.rammin.# a statement such as 2Maximize contribution2 becomes a%n& a. constraint b. slac3 0ariable c. ob$ecti0e function d. 0iolation of linearity e. decision 0ariable 4ustomers of 5ell 4omputers can order their computers on6line. ,nce the order is placed# 5ell starts to assemble the computer. 5ell has recently reduced the time it ta3es to assemble a computer from 1) hours to 7 hours. -his is an example of competin. by a. low6cost b. differentiation c. response d. 8uality e. none of the abo0e Mass customization has been de0eloped to produce a. hi.h60olume# hi.h60ariety products b. low60olume# hi.h60ariety products c. hi.h60olume# low60ariety products d. low60ariety products at either hi.h6 or low60olume e. hi.h60olume products of either hi.h6 or low60ariety -he li3elihood that a decision ma3er will e0er recei0e a payoff precisely e8ual to the expected 0alue when ma3in. any one decision is a. hi.h %near 1))9& b. low %near )9& c. dependent upon the number of alternati0es d. dependent upon the number of states of nature e. none of the abo0e 1n sensiti0ity analysis# a zero shadow price for a resource ordinarily means that a. the resource has not been used up b. the resource is scarce c. the resource constraint was redundant d. somethin. is wron. with the problem formulation e. none of the abo0e Which one of the followin. products is most li3ely made in a $ob6shop en0ironment? a. .raphite pencils b. personal computers c. ci.arettes d. Mc5onald<s hambur.ers e. custom furniture

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Exam I

Spring 2002

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=n operations mana.er is not li3ely to be in0ol0ed in a. the identification of customers< wants and needs b. the desi.n of products and ser0ices to satisfy customers< wants and needs c. the 8uality of products and ser0ices to satisfy customers< wants and needs d. wor3 schedulin. to meet the due dates promised to customers e. forecastin. sales -he re.ion which satisfies all of the constraints in linear pro.rammin. is called the a. optimum solution space b. profit maximization re.ion c. feasible re.ion d. re.ion of optimality e. re.ion of non6ne.ati0ity 5ecision trees a. .i0e more accurate solutions than decision tables b. .i0e less accurate solutions than decision tables c. are rarely used because one needs specialized software to .raph them d. are especially powerful when a se8uence of decisions must be made e. are too complex to be used by decision ma3ers -he fundamental purpose for the existence of any or.anization is described by its a. policies b. procedures c. strate.y d. mission e. bylaws Which of the followin. industries is li3ely to ha0e low e8uipment utilization? a. auto manufacturin. b. machine6tool shop c. beer ma3in. d. paper manufacturin. e. chemical processin. Which of the followin. is not an operations decision? a. schedulin. b. layout desi.n c. price d. 8uality e. in0entory ?orecasts used for new product plannin.# capital expenditures# facility location or expansion# and @A5 typically utilize a a. lon.6ran.e time horizon b. medium6ran.e time horizon c. short6ran.e time horizon d. nai0e method# because there is no data history e. all of the abo0e

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Exam I

Spring 2002

1". 4onsider forecastin. methods. Method = has a M=5 of 1)."B Method C has a Mad of 1 .:B and method 4 has a M=5 of >.;. Which method should be chosen for the .reatest accuracy? a. Method = b. Method C c. Method 4 d. 1t depends on which 0alue of is selected. e. +one of the abo0e 1:. = continuous process is commonly used to produce a. hi.h60olume# hi.h60ariety products b. low60olume# hi.h60ariety products c. hi.h60olume# low60ariety products d. low60ariety products at either hi.h6 or low60olume e. hi.h60olume products of either hi.h6 or low60ariety 1;. -he dilemma# in the PrisonerDs 5ilemma is a. whether to confess or not to confess b. that if both players confess then they both win c. that if both players follow their best strate.y they will be worse off than if they cooperate d. whether to follow a strate.y or play randomly e. none of the abo0e 17. 1n decision theory# an occurrence or situation o0er which the decision ma3er has no control is called a%n& a. decision tree b. state of nature c. alternati0e d. decision under uncertainty e. none of the abo0e 1>. 1n which sta.e of the product life cycle should product strate.y focus on impro0ed cost control? a. introduction b. .rowth c. maturity d. decline e. none of the abo0e 2). Which of the followin. is not a typical attribute of .oods? a. output can be in0entoried b. often easy to automate c. hi.h customer interaction d. output can be resold e. production and consumption are separate

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Exam I

Spring 2002

Problems E each problems is labeled with its point 0alue.

21. % pts& -he decision tree abo0e represents a decision problem. Fow many states of nature are in this problem?

a. b. c. d. e. 22.

,ne -wo -hree Six +one of the abo0e

%' pts& -he decision with the hi.hest expected 0alue is a. = b. C c. 4 d. = A C e. = A 4

2 . %' pts& 4ompute the M=5 for the forecast belowG

Quarter 1 2 ' a. b. c. d. e. ' units per 8uarter 2 units per 8uarter E2 units per 8uarter 7.79 none of the abo0e Actual Demand '2 '7 "> Forecast ') '" ") ""

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Exam I

Spring 2002

Crenda Helly runs a specialty s3i clothin. shop outside of 5uran.o# 4,. She must place her order for s3i $ac3ets well in ad0ance of the s3i season because the manufacturer produces them durin. the summer months. Crenda needs to determine wither to place a lar.e# medium # or small order for $ac3ets. -he number sold will depend lar.ely on whether the area recei0es a hea0y# normal# or li.ht amount of snow durin. the s3i season. -he followin. table summarizes the payoff Crenda expects under each scenario.

Amount of snow Size of order Heavy Normal Light Large 10 7 3 Medium 8 8 Small ! ! ! "ayoffs #in $1000s%

2'. a. b. c. d. e. 2".

%2 pts& 5etermine the best decision usin. the optimistic approach. Iar.e Medium Small +ot enou.h information +one of the abo0e

%' pts& = local psychic claims that she has correctly predicted the amount of snowfall for the last > out of 1) years. Crenda is tempted. What is the maximum that Crenda should be willin. to pay for a snowfall prediction? a. $'2)) b. $ ;)) c. $"") d. $")) e. +one of the abo0e %' pts& Crenda estimates that the probability of a hea0y snowfall is ).2"# the probability of a normal snowfall is ).:)# and the probability of a li.ht snowfall is ).1". What is the best decision and expected payoff usin. the expected 0alue approach? a. Iar.e# $;1") b. Medium# $72)) c. Medium# $;;)) d. Small# $')))

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2;. a. b. c. d. e.

+one of the abo0e

% pts& 5etermine the best decision usin. the conser0ati0e approach. Iar.e Medium Small +ot enou.h information +one of the abo0e

Exam I

Spring 2002

27. %' pts& ?or the spreadsheet below# determine the 0alue that will be printed in cell J". a. '.) b. ".: c. ;.) d. 2).) e. +one of the abo0e

-he ,utdoor ?urniture 4ompany manufactures two products# benches and picnic tables. -he firm has two main resourcesG its carpenters %labor force& and a supply of redwood. 5urin. the next production cycle# 1#2)) hours of labor are a0ailable under a union a.reement. -he firm also has a stoc3 of #")) board feet of 8uality redwood. Jach bench re8uires ' labor6hours and 1) board6feet of redwoodB each picnic table ta3es : labor6hours and " board6feet. 4ompleted benches will yield a profit of $> each# and tables will result in a profit of $2) each. ?ormulate an IP to determine the number of tables and benches to produce in order to optimize profit. =nswer the followin. 8uestions re.ardin. the IP formulation. Iet C represent the number of benches and - represent the number of tables. 2>. %' pts& -he ob$ecti0e function is a. M=K >C ! 2)b. /sumproduct%>C ! 2)-& c. M=K >C ! 2)- ")) d. 1)C ! "- ")) e. +one of the abo0e ). a. b. c. d. e. %' pts& -he labor6hour constraint is C ! - 12)) 'C ! 1)- 12)) 'C ! :- 12)) 1)C ! "- ")) +one of the abo0e

Exam I

Spring 2002

MS= 4omputer 4orporation manufactures two models of minicomputers# the =lpha ' and Ceta ". -he firm employs " technicians# wor3in. 1:) hours each per month# on its assembly line. Mana.ement insists that full employment %that is# =II 1:) hours of time& be maintained for J=4F wor3er durin. next monthDs operations. 1t re8uires 2) labor6hours to assemble each =lpha ' computer and 2" labor6hours to assembly each Ceta " model. MS= wants to produce at least 1) =lpha 's and at least 1" Ceta "s. =lpha 's .enerate $12)) profit per unit# and Ceta "s yield $17)) each. -his problem has been formulated as an IP and sol0ed usin. Jxcel sol0er. Lse the answer and sensiti0ity reports below to answer the next 2 8uestions.
Microsoft Excel 9.0 Answer Report &arget 'ell #Ma(% Cell Name Original Value Final Value $)$1* "rofit &otal "rofit 0 ++*00

Ad,usta-le 'ells Cell Name $.$10 Num-er of /om0uter Al0ha ! $'$10 Num-er of /om0uter .eta +

Original Value Final Value 0 10 0 *!

'onstraints Cell Name $)$! La-or1hours 2sed $)$+ Al0ha ! Min 2sed $)$ .eta + Min 2sed

Cell Value Formula Status Slac 800 $)$!34$5$! .inding 0 10 $)$+64$5$+ .inding 0 *! $)$ 64$5$ Not .inding 7

Microsoft Excel 9.0 Sensiti!it" Report Ad,usta-le 'ells Final Re#uce# O$%ecti!e Allowa$le Allowa$le Cell Name Value Cost Coefficient &ncrease 'ecrease $.$10 Num-er of /om0uter Al0ha ! 10 0 1*00 *!0 15830 $'$10 Num-er of /om0uter .eta + *! 0 1800 15830 300 'onstraints Cell Name $)$! La-or1hours 2sed $)$+ Al0ha ! Min 2sed $)$ .eta + Min 2sed Final S(a#ow Constraint Allowa$le Allowa$le Value )rice R.*. Si#e &ncrease 'ecrease 800 7* 800 15830 **+ 10 1*!0 10 119*+ 10 *! 0 1+ 7 15830

Exam I

Spring 2002

1. a. b. c. d. e. 2.

%' pts& What is the optimal product mix for MS= computers? =lpha ' / )B Ceta " / ) =lpha ' / )B Ceta " / > =lpha ' / 1)B Ceta " / 2' =lpha ' / 7))B Ceta " / > +one of the abo0e

%' pts& =n additional assembler can be hired full6time %1:) hours&. 1f the wa.e6rate for assemblers is $1"Mhour should this additional assembler be hired? a. +o# $1" exceeds the shadow price. b. *es# the shadow price is lar.er than $1"Mhours. c. +o# we are not within the allowable ran.e. d. +ot enou.h information. +eed to re6run the model. e. +one of the abo0e %' pts& Small Wonder# an amusement par3# experiences seasonal attendance. 1t has collected attendance data by season. -he annual attendance for next year has been forecasted to be 1"2" %in thousands&. Quarter Park Attendance (thousands) ?all "2 Winter 1": Sprin. "17 Summer 1' 5etermine the forecast for next Sprin.. a. 12> b. "17 c. ">1 d. 2 "7 e. none of the abo0e

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Exam I

Spring 2002

An internet bookstore that sells retail books had the following historical demand. Use the following information to answer the next 4 uestions.
Year Book Sales 1 * 3 ! + 7 8 7731 83*7 7177 1030 11+*! 1*381 1* 88 13177

-he forecast in the ei.hth year was 12#1>7. -he company uses / ).1). = re.ression analysis was performed on the 7 years of data usin. Jxcel. -he output is below.

S2MMA:; <2&"2& Regression Statistics Multi0le : : S=uare Ad,usted : S=uare Standard 5rror <-servations AN<>A df :egression :esidual &otal Coefficients ?nter/e0t ;ear 87197+ 8!*97 1 + SS 87 +19 8 *0+8 137971 Standard Error 37797 70917 t Stat 18918 1*901 P-value 0900 0900 Lower 95% +700917 *9++ Upper 95% 78!3933 10*3938 MS 13773093! F 1!!9*+ Significance F 0900 1787 !8 90! 1787 !8 90! 097831 097 + 097+78 37193877 7

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% pts& 4ompute the 6year mo0in. a0era.e forecast for the > th year. %1+-J@+JC,,HS-,@J& a. ;#; 1 b. >#1>> c. 7#'2) d. 12#1>7 e. 12#;'> % pts& 4ompute the exponential smoothin. forecast for the > th year. %1+-J@+JC,,HS-,@J& a. ;#; 1 b. 12#2>: c. 12#;'> d. 1 #771 e. +one of the abo0e

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Exam I

Spring 2002

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%2 pts& 4ompute the nai0e forecast for the >th year. %1+-J@+J- C,,HS-,@J& a. ;#; 1 b. 12#2>: c. 1 #1;> d. 1 #771 e. +one of the abo0e %' pts& 4ompute the re.ression analysis forecast for the > th year. %1+-J@+JC,,HS-,@J& a. ;#; 1 b. 1)#2; c. 1'#'"7 d. 1;#)"' e. +one of the abo0e

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