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Theory: B - B B B
Theory: B - B B B
A. The least cost path. C. The path with the most slack. 12.A quantitative technique used for selecting the combination of
B. The longest path through the network. D. The shortest path resources that maximize profits or minimize costs is
through the network. A. Curvilenear analysis C. Linear programming
B. Dynamic programming D. Queuing theory
9. Of these statements, which is the least pertinent to the concept of
“slack” in relation to the Project Evaluation and Review Technique 13.Linear programming is used most commonly to determine the
(PERT)? A. Fastest timing.
A. The less the amount of slack time, the more critical an activity B. Most advantageous prices.
or path. C. Best use of scarce resources.
B. Slack time information is useful for planning and continuous D. Mix of variables that will result in the largest quantity.
monitoring.
C. It is computed by subtracting the earliest expected time from 14.AB Woods Co. is planning to expand its production facilities, which
the earliest allowable time. is at present, a constraint. You are asked to review the linear
D. If not exceeded, non-critical activities can be delayed without programming model. Among the items in the model, which will not
delaying the project’s completion time. be found?
A. Networks.
B. Constraints.
C. Slack variables.
10.In a Program Evaluation and Review Technique (PERT) system, D. Independent and dependent variables.
activities along the critical path:
A. have a slack of zero
B. follow the line of best fit 15.Linear programming models are mathematical techniques in which
C. may be delayed without affecting completion time an objective function is maximized or minimized subject to
D. intersect at a corner point described by the feasible area constraints. These constraints must be fully specified before a
linear programming problem can be solved, and generally
11.The process of adding resources to shorten selected activity times described:
on the critical path in project scheduling is called A. Costs. C. Inefficiencies.
A. A branch-and-bound solution. C. Material-requirements B. Dependent variables. D. Resources.
planning.
B. Crashing. D. The Delphi technique. 16.In a linear programming maximization problem for business
problem solving, the coefficient of the objective function usually are
Linear Programming A. Variable costs.
7. What is the expected profit? 11.The conditional profit per game of having 4,000 pretzels available
A. $6,000 C. $6,300 but only selling 3,000 pretzels is
B. $6,150 D. $6,450 A. $1,800 C. $2,800
B. $2,100 D. $3,500
8. How much would the company be willing to pay before investing in
the project to learn in advance which of the three scenarios
12.The conditional profit per game of having 4,000 pretzels available
(optimistic, pessimistic, or most likely) would actually occur?
and selling all 4,000 pretzels is
A. $0 C. $300
A. $800 C. $2,100
B. $150 D. $550
B. $1,200 D. $2,800
Questions 9 through 13 are based on the following information.
The College Honor Society sells hot pretzels at the home football
games. The pretzels are sold for $1.00 each, and the cost per pretzel
is $0.30. Any unsold pretzels are discarded because they will be stale 13.The conditional profit (loss) per game of having 4,000 pretzels
before the next home game. available but being able to sell 5,000 pretzels if they had been
The frequency distribution of the demand for pretzels per game is available is
presented below. A. $(1,225). C. $3,500.
Unit Sales Volume Probability B. $2,800. D. $4,025.
2,000 pretzels .10
3,000 pretzels .15 Questions 14 through 18 are based on the following information.
4,000 pretzels .20
Gleason Co. has two products, a frozen dessert and ready-to-bake
5,000 pretzels .35
breakfast rolls, ready for introduction. However, plant capacity is
6,000 pretzels .20
limited, and only one product can be introduced at present. Therefore,
9. The estimated demand for pretzels at the next home football game
Gleason has conducted a market study, at a cost of $26,000, to
using an expected value approach is
determine which product will be more profitable. The results of the
A. 4,000 pretzels. C. 5,000 pretzels.
study follow.
B. 4,400 pretzels. D. 6,000 pretzels.
Sales of Desserts at $1.80/unit Sales of Rolls at $1.20/unit
Volume Probability Volume Probability
10.The estimated demand for pretzels at the next home football game
250,000 .30 200,000 .20
using a determinate approach based on the most likely outcome is
300,000 .40 250,000 .50
A. 4,000 pretzels. C. 5,000 pretzels.
350,000 .20 300,000 .20
B. 4,400 pretzels. D. 6,000 pretzels.
400,000 .10 350,000 .10
MSQ-11 – QUANTITATIVE METHODS Page 5 of 10
MANAGEMENT ADVISORY SERVICES HILARIO TAN
The costs associated with the two products have been estimated by 17.In order to recover the costs of production tooling and advertising
Gleason's cost accounting department and are shown as follows. for the breakfast rolls, Gleason's sales of the breakfast rolls would
Dessert Rolls have to be
Ingredients per $.40 $.25 A. 37,500 units. C. 100,000 units.
unit B. 60,000 units. D. Some amount other than
Direct labor per .35 .30 those given.
unit
Variable overhead .40 .20 18.The advertising expense estimated by Gleason for the introduction
per unit of the new products is an example of a(n)
Production 48,000 25,000 A. Conversion cost. C. Discretionary cost.
tooling* B. Committed cost. D. Opportunity cost.
Advertising 30,000 20,000
*Gleason treats production tooling as a current operating expense Decision tree
rather than capitalizing it as a fixed asset. 19.Ron Bagley is contemplating whether to investigate a labor
14.According to Gleason's market study, the expected value of the efficiency variance in the Assembly Department. It will cost $6,000
sales volume of the breakfast rolls is to undertake the investigation and another $18,000 to correct
A. 125,000 units. C. 275,000 units. operations if the department is found to be operating improperly. If
B. 260,000 units. D. Some amount other than the department is operating improperly and Bagley fails to
those given. investigate, operating costs from the various inefficiencies are
expected to amount to $33,000. Bagley will be indifferent between
15.Applying a deterministic approach, Gleason's revenue from sales of investigating and not investigating the variance if the probability of
frozen desserts would be improper operation is
A. $216,000. C. $549,000. A. 0.29 C. 0.60
B. $540,000. D. Some amount other than B. 0.40 D. 0.71
those given.
20.Under favorable weather conditions, the management of Flesher
16.The expected value of Gleason's operating profit directly traceable Farms expects its raspberry crop to have a $120,000 market value.
to the sale of frozen desserts is An unprotected crop subject to frost has an expected market value
A. $120,250. C. $198,250. of $80,000. If Flesher protects the raspberries against frost, the
B. $150,250. D. Some amount other than market value of the crop is still expected to be $120,000 under
those given. frost-free conditions and $180,000 if a frost occurs. What must be
the probability of a frost for Flesher to be indifferent to spending
$20,000 for tents to provide frost protection? What is the probability that an employee will arrive on time the
A. 0.167 C. 0.250 fourth day if they arrived on time the first day?
B. 0.200 D. 0.333 A. .575 C. .61
B. .583 D. .7
Questions 21 and 22 are based on the following information:
Superior Craft is evaluating the launching of a new product. If the
product becomes successful, the present value of future cash flows Learning curve
(excluding investment) is estimated at P2,000,000. If the product is not 24.Hennepin Co. used 30 hours to produce the first batch of units. The
successful, the present value of this flow is estimated at P400,000. second batch took an additional 18 hours. How many total hours
The required investment is P1,000,000. will the first four batches require?
21.What are the probabilities that would have to be assigned to the A. 61.44 hours. C. 96.2 hours.
events “success” and “not success” to make Superior Craft B. 76.8 hours. D. 120.0 hours.
indifferent between the two actions “invest” and “do not invest”?
A. B. C. D. 25.Lake Corporation manufactures specialty components for the
Probability of 37.5% 40% 45.5% 50% electronics industry in a highly labor intensive environment. Are
success Electronics has asked Lake to bid on a component that Lake made
Probability of not 62.5% 60% 54.5% 50% for Arc last month. The previous order was for 80 units and
success required 120 hours of direct labor to manufacture. Arc would now
like 240 additional components. Lake experiences an 80% learning
22.If Superior Craft thinks the probability of “success” is 60%, how curve on all of its jobs. The number of direct labor hours needed for
much higher would be the expected value of the act “invest” over Lake to complete the 240 additional components is
the expected value of the act “do not invest”? A. 187.2 C. 307.2
A. P360,000 C. P600,000 B. 256.0 D. 360.0
B. P400,000 D. P1,000,000
26.Tofte has a target total labor cost of $1,500 for the first four batches
Markov analysis of a product. Labor is paid $10 an hour. If Tofte expects an 80%
23.Rusty, the night manager at a local fast food restaurant, has had learning rate, how many hours should the first batch take?
problems with his employees not arriving on time. After doing some A. 58.6 hours. C. 96.0 hours.
research, he discovered that, if his employees were on time the B. 73.2 hours. D. 150 hours.
night before, the probability that they would arrive on time again 27.CBA Company expects a 90% learning curve. The first batch of a
is .7. On the other hand, if they were late the night before, the new product required 100 hours. The second batch should take
probability that they would arrive on time the following day is .4. A. 80 hours. C. 95 hours
MSQ-11 – QUANTITATIVE METHODS Page 7 of 10
MANAGEMENT ADVISORY SERVICES HILARIO TAN
Theory Problem
1. B 1. C 21. A
2. A 2. C 22. A
3. D 3. A 23. B
4. C 4. C 24. B
5. D 5. C 25. A
6. C 6. C 26. A
7. C 7. B 27. A
8. B 8. B 28. A
9. C 9. B 29. C
10. A 10. C 30. A
11. B 11. A 31. C
12. C 12. D 32. A
13. C 13. B 33. B
14. A 14. B 34. C
15. D 15. B 35. D
16. C 16. A 36. B
17. C 17. C 37. B
18. B 18. C 38. A
19. B 19. B
20. A 20. B