Practice MCQ/True-False Set 2

1. Refer to the above screenshot of the Solver dialogue box in Excel. We are given
an optimization problem where we want to maximize profit. While solving this
problem in Excel, we input the cell reference for the decision variables in which of
the spaces marked as A, B, C in the above screenshot of the Solver dialogue box?
i. A
ii. B
iii. C
2. The data table A given below shows the simultaneous effects of the variations in
quantity sold and unit price on the profit for a product. To create such a data table,
where do you enter the cell references for unit price and quantity sold in the Data
Table dialogue box (refer to a screenshot of the dialogue box in B given below)?
i. Unit price in Row input cell and quantity sold in the Column input cell in the
Data Table dialogue box
ii. Quantity sold in Row input cell and unit price in the Column input cell in the
Data Table dialogue box

A.

B.

3. In a Scenario Summary table (see example table below) created during the
analysis of a spreadsheet model, what do the result cells refer to?
i. The key outcome(s) whose changes we want to observe due to changes in input
variables.
ii. The input variables the effect of whose change we want to observe on the
outcome of a model
iii. The decision variables the effect of whose change we want to observe on the
outcome of a model

4. In a one-way data table, we can observe the effect of the change:

i. of two input variables on one outcome variable
ii. of one input variable on one outcome variable
iii. of one input variable on at least one outcome variable
5. Evaluate the influence diagram below drawn by a student for the following
problem:
Develop the base case model to decide the price that should be set for product A.
The production process involves a fixed cost of $1000. The unit cost is $8 and it is
estimated that 900 units of the product can be sold.

i. The diagram is correct.

ii. The direction of the arrow between total cost and profit is incorrect
iii. The direction of the arrow between total revenue and profit is incorrect.
iii. The direction of the arrow between quantity sold and total revenue is incorrect.
6. In a spreadsheet modeling exercise, a student wrote the following formula in a
cell to compute an increase in the number of birthday cakes sold after an advertising
effort:

where the cell C3 contains the number of cakes sold before advertising and the ad
causes 4 more cakes to be sold.
Which of the following would you point out to the student?
i. He has used a cell reference
ii. He has hard-coded a value in an Excel formula
iii. Nothing to point out, everything is perfect

7. In an optimization problem, constraints often represent restrictions on available

resources or the requirement to fulfill a certain minimum criterion. True or False?
i. True
ii. False

8. Extra time spent in planning can actually reduce the overall time required to
perform a spreadsheet analysis. True or False?
i. True
ii. False

9. Models do not provide the opportunity to test the implications of alternative

courses of action. True or False?
i. True
ii. False

10. Modeling is the process of creating a simplified representation of reality. True

or False?
i. True
ii. False

Answer Key:
1 (ii); 2(ii); 3(i); 4(iii); 5(iii); 6(ii); 7(i); 8(i); 9(ii); 10(i)