1. Which if the following is heavily weighted in calculation PERT’s expected time?

a. Idealistic time c. Optimistic time

b. Most likely time d. Pessimistic time

2. An 80% learning curve means that

a. The incremental time for each unit is 80% of the time of the unit before it
b. The cumulative average time is 80% of the cumulative average time at the previous unit
c. As production doubles, the incremental time for a unit is 80% of the time at the previous doubling point.
d. As production doubles, the cumulative average time is 80% of the time at the previous doubling point

3. The term ‘constraints’ in a linear programming model generally describes

a. Costs c. Scarce resources
b. Inefficiencies d. Dependent variables

4. A company is controlling a complex project by determining the activities that must take place and the relationship
among these activities. Attention then is focused on those activities that have the greatest influence on the project’s
estimated completion date. The quantitative technique most relevant to this is
a. Cost-volume-profit analysis c. Program evaluation review technique
b. Parametric programming d. Queuing analysis

5. Program evaluation and review technique (PERT) is a system that uses:

a. Linear square method c. Economic Order Quantity (EOQ) formula
b. Linear programming d. Network analysis

6. PERT and the critical path method (CPM) are used for
a. Determining the optimal product mix c. Determining product costs
b. Project scheduling and control d. Determining the number of servers needed in a fast-food restaurant

7. A project is defined as a
a. Temporary endeavor c. Expensive endeavor
b. Continuous endeavor d. Endless endeavor

8. When using PERT, the expected time for an activity when given an optimistic time (A), a pessimistic time (B), and
most likely time (m) is calculated by which one of the following formulas?
a. (b – a) ÷ 2 c. (a + 4m + b) ÷ 6
b. (a + b) ÷ 2 d. (4abm) ÷ 6

9. Critical Path Method (CPM) is a technique for analyzing, planning, and scheduling large, complex projects by
determining the critical path from a single time estimated for each event in a project. The critical path
a. Is the maximum amount of time an activity may be delayed without delaying the total project beyond its target time
b. Is the earliest starting time that an activity for a project can begin
c. Is the pessimistic time estimate for an activity of a project
d. Is the longest time path form the first event to the last event for a project

10. The primary difference between PERT and CPM is that

a. CPM uses probabilities on the activity times and PERT does not
b. PERT considers activity costs and CPM does not
c. PERT can assign probabilities to activity times and CPM does not
d. CPM considers activity costs and PERT does not

11. When doing a cost-time trade-off in PERT analysis, the first activity that should be crashed is the activity
a. With the largest amount of slack
b. With lowest unit crash cost
c. On the critical path with the maximum possible time reduction
d. On the critical path with the lowest unit crash cost

12. A decision maker is operating in an environment wherein all the facts surrounding a decision are known exactly, &
each alternative is associated only with one possible outcome. The environment is known as
a. Certainty c. Uncertainty
b. Risk d. Conflict

13. A quantitative technique useful in projecting a firm’s sales and profits is

a. Probability distribution theory c. Learning curves
b. Gantt charting d. Queuing theory
14. Expected value in decision analysis is
a. A standard deviation using the probabilities as weights
b. An arithmetic mean using the probabilities as weights
c. The standard deviation divided by the coefficient of variation
d. A measure of the difference between the best possible outcome and the outcome of the original decision

15. The term ‘expected value’ refers to the

a. Value which would be assigned to a variable if a problem were to be treated in a deterministic manner
b. Most likely single outcome selected from among a number of possible alternatives
c. Tails of a normal probability distribution
d. Mean value of a variable

16. The modeling technique used for situations involving a sequence of events with several possible outcomes associated
with each event is
a. Network analysis c. Queuing theory
b, Decision tree analysis d. Linear programming

17. Which of the following statements does not apply to decision tree analysis?
a. The sum of the probabilities of the events is less than one
b. All of the events are mutually exclusive
c. All of the events are included in the decision
d. The branches emanate from a node from left to right

18. The expected value of perfect information is the

a. Same as the expected profit under certainty
b. Sum of the conditional profit for the best event of each act times the probability of each event occurring
c. Difference between the expected profit under certainty and the expected opportunity loss
d. Difference between the expected profit under certainty and the expected monetary value of the best act under certainty

19. If a cost function behaves that the average costs per unit of output decline systematically as cumulative production
doubles, the cost function is referred to as a:
a. Parabolic curve c. Linear cost curve
b. Learning curve d. Growth curve

20. The cost factor least likely to be affected by the learning curve is
a. Materials c. Indirect labor
b. Direct labor d. Variable overhead

21. In which company is the learning effect probably most important?

a. A canner of orange juice c. A highly automated chemical manufacturer
b. A manufacturer of airplanes d. A manufacturer of nails

22. A technique used for selecting the combination of resources that maximizes profits or minimizes costs.
a. Curvilinear analysis c. Dynamic programming
b. Queuing theory d. Linear programming

23. The term ‘constraints’ in a linear programming model generally describes

a. Costs c. Scarce resources
b. Inefficiencies d. Dependent variables

24. One limitation of the linear programming technique is that it is effective only for
a. Two-product situations c. Straight-line relationship situations
b. Manufacturing resource constraint situations d. Income maximization situations

25. In linear programming, sensitivity analysis is used to

a. Develop coefficients for the objective function
b. Determine how the optimal solution will react to changes in parameters (e.g., objective and constraint functions) set in a
linear programming model
c. Develop the optimal solution to the problem
d. Identify the constraints

26. The graphic method as a means for solving linear programming problems
a. Can be used when there are more than two restrictions (constraints)
b. Is limited to situations in which there are two restrictions (constraints)
c. Is limited to situations in which there is one restriction (constraint) only
d. Cannot be used if there are any restrictions (constraints)