MGMT330

Sample Final Exam

Spring 2008

Time allowed 3 hours Note: Answers to multiple hoi e are mar!ed with an asteris! " Questions 1 22 are based on LP #$ %e a$ '$ $ d$ ision &aria'les tell how mu h or how man( o) something to produ e* in&est* pur hase* hire* et $" represent the &alues o) the onstraints$ measure the o'+e ti&e )un tion$ must exist )or ea h onstraint$

2$ A solution that satis)ies all the onstraints o) a linear programming pro'lem ex ept the nonnegati&it( onstraints is alled a$ optimal$ '$ )easi'le$ $ in)easi'le$" d$ semi,)easi'le$ 3$ Sla ! a$ is the di))eren e 'etween the le)t and right sides o) a onstraint$ '$ is the amount '( whi h the le)t side o) a onstraint is smaller than the right side"$ $ is the amount '( whi h the le)t side o) a onstraint is larger than the right side$ d$ exists )or ea h &aria'le in a linear programming pro'lem$ -$ .hi h o) the )ollowing spe ial ases does not re/uire re)ormulation o) the pro'lem in order to o'tain a solution0 a$ alternate optimalit(" '$ in)easi'ilit( $ un'oundedness d$ ea h ase re/uires a re)ormulation$ 1$ The impro&ement in the &alue o) the o'+e ti&e )un tion per unit in rease in a right,hand side is the a$ sensiti&it( &alue$ '$ dual pri e$" $ onstraint oe))i ient$ d$ sla ! &alue$ 2$ As long as the slope o) the o'+e ti&e )un tion sta(s 'etween the slopes o) the 'inding onstraints a$ the &alue o) the o'+e ti&e )un tion won3t hange$ '$ there will 'e alternati&e optimal solutions$ $ the &alues o) the dual &aria'les won3t hange$" d$ there will 'e no sla ! in the solution$

4$ A a$ '$ $ d$

onstraint that does not a))e t the )easi'le region is a non,negati&it( onstraint$ redundant onstraint$" standard onstraint$ sla ! onstraint$

8$ .hene&er all the onstraints in a linear program are expressed as e/ualities* the linear program is said to 'e written in a$ standard )orm$" '$ 'ounded )orm$ $ )easi'le )orm$ d$ alternati&e )orm$ 5$ 6nl( 'inding onstraints )orm the shape 7'oundaries8 o) the )easi'le region$ True or False0 ANS: F #0$The onstraint 1x# 2x2 0 passes through the point 720* 108$ True or False0 ANS: T ##$Alternati&e optimal solutions o ur when there is no )easi'le solution to the pro'lem$ T or F0 ANS: F #2$9e ause the dual pri e represents the impro&ement in the &alue o) the optimal solution per unit in rease in right,hand side* a dual pri e annot 'e negati&e$ T or F0 ANS: F #3$No matter what &alue it has* ea h o'+e ti&e )un tion line is parallel to e&er( other o'+e ti&e )un tion line in a pro'lem$ T or F0 ANS: T #-$:) a de ision &aria'le is not positi&e in the optimal solution* its redu ed ost is a$ what its o'+e ti&e )un tion &alue would need to 'e 'e)ore it ould 'e ome positi&e$ '$ the amount its o'+e ti&e )un tion &alue would need to impro&e 'e)ore it ould 'e ome positi&e$" $ ;ero$ d$ its dual pri e$ #1$A a$ '$ $ d$ onstraint with a positi&e sla ! &alue will ha&e a positi&e dual pri e$ will ha&e a negati&e dual pri e$ will ha&e a dual pri e o) ;ero$" has no restri tions )or its dual pri e$

#2$The amount '( whi h an o'+e ti&e )un tion oe))i ient an hange 'e)ore a di))erent set o) &alues )or the de ision &aria'les 'e omes optimal is the a$ optimal solution$ '$ dual solution$ $ range o) optimalit($" d$ range o) )easi'ilit($ #4$The range o) )easi'ilit( measures a$ the right,hand side &alues )or whi h the o'+e ti&e )un tion &alue will not hange$ '$ the right,hand side &alues )or whi h the &alues o) the de ision &aria'les will not hange$ $ the right,hand side &alues )or whi h the dual pri es will not hange$" d$ ea h o) the a'o&e is true$ #8$The #00< =ule ompares a$ proposed hanges to allowed hanges$" '$ new &alues to original &alues$ $ o'+e ti&e )un tion hanges to right,hand side hanges$ d$ dual pri es to redu ed osts$ #5$An o'+e ti&e )un tion re)le ts the rele&ant ost o) la'or hours used in produ tion rather than treating them as a sun! ost$ The orre t interpretation o) the dual pri e asso iated with the la'or hours onstraint is a$ the maximum premium 7sa( )or o&ertime8 o&er the normal pri e that the ompan( would 'e willing to pa($" '$ the upper limit on the total hourl( wage the ompan( would pa($ $ the redu tion in hours that ould 'e sustained 'e)ore the solution would hange$ d$ the num'er o) hours '( whi h the right,hand side an hange 'e)ore there is a hange in the solution point$ 20$A se tion o) output )rom The Management S ientist is shown here$ >aria'le ?ower ?imit @urrent >alue Apper ?imit # 20 #00 #20 .hat will happen to the solution i) the o'+e ti&e )un tion oe))i ient )or &aria'le # de reases '( 200 a$ Nothing$ The &alues o) the de ision &aria'les* the dual pri es* and the o'+e ti&e )un tion will all remain the same$ '$ The &alue o) the o'+e ti&e )un tion will hange* 'ut the &alues o) the de ision &aria'les and the dual pri es will remain the same$" $ The same de ision &aria'les will 'e positi&e* 'ut their &alues* the o'+e ti&e )un tion &alue* and the dual pri es will hange$ d$ The pro'lem will need to 'e resol&ed to )ind the new optimal solution and dual pri e$

2#$A se tion o) output )rom The Management S ientist is shown here$ @onstraint 2 ?ower ?imit 2-0 @urrent >alue 300 Apper ?imit -20

.hat will happen i) the right,hand side )or onstraint 2 in reases '( 2000 a$ Nothing$ The &alues o) the de ision &aria'les* the dual pri es* and the o'+e ti&e )un tion will all remain the same$ '$ The &alue o) the o'+e ti&e )un tion will hange* 'ut the &alues o) the de ision &aria'les and the dual pri es will remain the same$ $ The same de ision &aria'les will 'e positi&e* 'ut their &alues* the o'+e ti&e )un tion &alue* and the dual pri es will hange$ d$ The pro'lem will need to 'e resol&ed to )ind the new optimal solution and dual pri e$" 22$ ?et A* 9* and @ 'e the amounts in&ested in ompanies A* 9* and @$ :) no more than 10< o) the total in&estment an 'e in ompan( 9* then whi h o) the )ollowing is the orresponding onstraint0 a$ 9 1 '$ A $19 B @ 0 $ $1A 9 $1@ 0 d$ $1A B $19 $1@ 0" Questions 23 32 are based on PERT/CPM 23$A ti&ities G* C* and = are the immediate prede essors )or a ti&it( .$ :) the earliest )inish times )or the three are #2* #1* and #0* then the earliest start time )or . a$ is #0$ '$ is #2$ $ is #1$" d$ annot 'e determined$ 2-$A ti&ities D* M and S immediatel( )ollow a ti&it( E* and their latest start times are #-* #8* and ##$ The latest )inish time )or a ti&it( E a$ is ##$" '$ is #-$ $ is #8$ d$ annot 'e determined$ 21$.hen a ti&it( times are un ertain* a$ assume the( are normall( distri'uted$ '$ al ulate the expe ted time* using 7a B -m B '8F2$" $ use the most li!el( time$ d$ al ulate the expe ted time* using 7a B m B '8F3$ 22$.hi h o) the )ollowing is alwa(s true a'out a riti al a ti&it(0 a$ ?S G EF$ '$ ?F G ?S$ $ ES G ?S$" d$ EF G ES$

24$ @rashing re)ers to an unanti ipated dela( in a riti al path a ti&it( that auses the total time to ex eed its limit$ ANS: F

Questions 28 32 are based on Inventory Models 28$ Inventory position is de)ined as a$ the amount o) in&entor( on hand in ex ess o) expe ted demand$ '$ the amount o) in&entor( on hand$ $ the amount o) in&entor( on hand plus the amount o) in&entor( on order$" d$ None o) the alternati&es is orre t$ 25$ The e onomi produ tion lot si;e model is appropriate when a$ demand ex eeds the produ tion rate$ '$ there is a onstant suppl( rate )or e&er( period* without pause$ $ ordering ost is e/ui&alent to the produ tion setup ost$" d$ All o) the alternati&es are orre t$

30$ For the E6H model* whi h o) the )ollowing relationships is in orre t0 a$ As the order /uantit( in reases* the num'er o) orders pla ed annuall( de reases$ '$ As the order /uantit( in reases* annual holding ost in reases$ $ As the order /uantit( in reases* annual ordering ost in reases$" d$ As the order /uantit( in reases* a&erage in&entor( in reases$ 3#$ The time 'etween pla ing orders is the lead time$ True or False0 ANS: F 32$ The E6H model is insensiti&e to small &ariations or errors in the ost estimates$ T or F0 ANS: T 33$ Find the omplete optimal solution to this linear programming pro'lem$ Ase a graph to show ea h onstraint and the )easi'le region$ :denti)( the optimal solution point on (our graph$ Min s$t$ 1I B 2J 3I B J #1 I B 2J #2 3I B 2J 2I*J 0

ANS: 1

The omplete optimal solution is

I G 2* J G 3* K G -8* S# G 2* S2 G 0* S3 G 0

3-$ The Sanders Garden Shop mixes two t(pes o) grass seed into a 'lend$ Ea h t(pe o) grass has 'een rated 7per pound8 a ording to its shade toleran e* a'ilit( to stand up to tra))i * and drought resistan e* as shown in the ta'le$ T(pe A seed osts L# and T(pe 9 seed osts L2$ :) the 'lend needs to s ore at least 300 points )or shade toleran e* -00 points )or tra))i resistan e* and 410 points )or drought resistan e* how man( pounds o) ea h seed should 'e in the 'lend0 Formulate the ?C pro'lem to minimi;e the ost o) 'lending$ %o N6T sol&e the pro'lem$ Shade Toleran e Tra))i =esistan e %rought =esistan e T(pe A # 2 2 T(pe 9 # # 1

ANS: ?et A G the pounds o) T(pe A seed in the 'lend ?et 9 G the pounds o) T(pe 9 seed in the 'lend Min s$t$ #A B 29 #A B #9 300 2A B #9 -00 2A B 19 410 A*9 0 !ill "ost li#ely be in "ulti$le %&oi%e 'or"at ta#in( t&e total u$ to 5)*

Questions 35 3

31$ The )ollowing linear programming pro'lem has 'een sol&ed '( The Management S ientist$ Ase the output to answer the /uestions$ 2

LINEAR PROGRAMMING PROBLEM MAX S.T. 1) 2) 4X1+5X2+8X3<1200 9X1+15X2+3X3<1500 25X1+30X2+15X3

OPTIMAL SOLUTION Obje !"#e $%& !"'& ()*%e + ()-")b*e X1 X2 X3 ()*%e 140.000 0.00 0 80.000 4,00.000

Re.% e. /'0! 0.000 10.000 0.000 4%)* P-" e 1.000 2.333

/'&0!-)"&! S*) 12S%-3*%0 1 2 0.000 0.000

OB5E/TI(E /OE$$I/IENT RANGES ()-")b*e X1 X2 X3 L'6e- L"7"! 19.288 N' L'6eL"7"! 8.333 /%--e&! ()*%e 25.000 30.000 15.000 U33e- L"7"! 45.000 40.000 50.000

RIG9T 9AN4 SI4E RANGES /'&0!-)"&! 1 2 a$ '$ $ d$ e$ )$ L'6e- L"7"! 888.88, 450.000 /%--e&! ()*%e 1200.000 1500.000 U33e- L"7"! 4000.000 2,00.000

Gi&e the omplete optimal solution$ .hi h onstraints are 'inding0 .hat is the dual pri e )or the se ond onstraint0 .hat interpretation does this ha&e0 6&er what range an the o'+e ti&e )un tion oe))i ient o) x2 &ar( 'e)ore a new solution point 'e omes optimal0 9( how mu h an the amount o) resour e 2 de rease 'e)ore the dual pri e will hange0 .hat would happen i) the )irst onstraint3s right,hand side in reased '( 400 and the se ond3s de reased '( 3100

ANS: a$ '$ x# G #-0* x2 G 0* x3 G 80* s# G 0* s2 G 0* ; G -400 @onstraints # and 2 are 'inding$ 4

$ d$ e$ )$

%ual pri e 2 G 2$33$ A unit in rease in the right,hand side o) onstraint 2 will in rease the &alue o) the o'+e ti&e )un tion '( 2$33$ As long as 2 -0* the solution will 'e un hanged$ #010 The sum o) per entage hanges is 400F2800 B 73108F7#0108 M # so the solution will not hange$

32$ Ase the )ollowing networ! o) related a ti&ities with their duration times to omplete a row )or ea h a ti&it( under the olumn headings 'elow$

Activity A 9 @ % E F G E ANS:

Immediate Predecessors

Activity Time

ES

LS

EF

LF

Slack

Critical Path?

Activity A 9 @ % E F G E

Precedence Activities ,, ,, 9 A* @ 9 9 %* E F

Time (weeks) 8 2 1 3 4 1 #2 #0

ES 0 0 2 8 2 2 ## 8

LS 0 # 3 8 4 ## #3

EF 8 2 4 ## 5 8 23 #8

LF 8 3 8 ## ## #3 23 23

Slack 0 # # 0 2 1 0 1

Critical Path? Jes

Jes

Jes

@=:T:@A? CATE: A,%,G C=6NE@T @6MC?ET:6N T:ME G 23 34$%emand )or a popular athleti shoe is nearl( onstant at 800 pairs per wee! )or a regional di&ision o) a national retailer$ The ost per pair is L1-$ :t osts L42 to pla e an order* and annual holding osts are harged at 22< o) the ost per unit$ The lead time is two wee!s$ a$ '$ $ d$ .hat is the E6H0 .hat is the reorder point0 .hat is the ( le time0 .hat is the total annual ost0

ANS: a$ '$ $ d$ H" G 4#0$# r G #200 T G 4#0$#F800 G $8842 wee!s or $8842748 G 2$2 da(s T@ G $174#0$#87$22871-8 B 7-#200F4#0$#87428 G 8-31$55

38$ The Fitness Shop is onsidering ordering a spe ial model exer ise ma hine$ Ea h unit will ost the shop L-#0 and it will sell )or L410$ An( units not sold at the regular pri e will 'e sold at the (ear,end model learan e )or L3-0$ Assume that demand )ollows a normal pro'a'ilit( distri'ution with G 20 and G 2$ .hat is the re ommended order /uantit(0 ANS: u G 3-0* o G 40 C7demand H"8 G $8253 H" G 20 B $51728 G 21$4 so order 22 35$ Dellam :mages prints sna ! )ood 'ags on long rolls o) plasti )ilm$ The plant operates 210 da(s a (ear$ The dail( produ tion rate is 2000 'ags* and the dail( demand is 3100 'ags$ The ost to set up the design )or printing is L300$ The holding ost is estimated at 2 ents per 'ag$ a$ '$ .hat is the re ommended produ tion lot si;e0 :) there is a )i&e,da( lead time to set up the line* what is the re ommended reorder point0

ANS: a$ '$ H" G 210*558 #4100