Question 1 A Plant Manager Is Considering Buying Additional Stamping Machines To Accommodate Increas

Question 1 A plant manager is considering buying additional stamping machines to accommodate increas

- July 22, 2022 - Edwin Tunner

Question 1 A plant manager is considering
buying additional stamping machines to accommodate increasing demand The
alternatives are to buy 1 machine, 2 machines, or 3 machines The profits
realized under each alternative are a function of whether their bid for a
recent defense contract is accepted or not The payoff table below illustrates
the profits realized (in $000’s) based on the different scenarios faced by the
manager

Alternative
Bid Accepted Bid
Rejected

Buy 1 machine
$10 $5

Buy 2 machines
$30 $4

Buy 3 machines
$40 $2

Using the information above, which alternative should be
chosen based on the maximax criterion?

Buy 1 machine

Buy 2 machines

Buy 3 machines

Question 2 A plant manager is considering
buying additional stamping machines to accommodate increasing demand The
alternatives are to buy 1 machine, 2 machines, or 3 machines The profits
realized under each alternative are a function of whether their bid for a
recent defense contract is accepted or not The payoff table below illustrates
the profits realized (in $000’s) based on the different scenarios faced by the
manager

Alternative
Bid Accepted Bid
Rejected

Buy 1 machine
$10 $5

Buy 2 machines
$30 $4

Buy 3 machines
$40 $2

Refer to the information above Assume that based on
historical bids with the defense contractor, the plant manager believes that
there is a 65% chance that the bid will be accepted and a 35% chance that the
bid will be rejected

What is the expected value under certainty?

105

195

1725

2775

Question 3 âThe probability of event B,
given that event A has occurredâ is known as a __________ probability

continuous

marginal

simple

joint

conditional

Question 4 Assume that you have an urn
containing 10 balls of the following description:

4 are white (W) and lettered (L)

2 are white (W) and numbered (N)

3 are yellow (Y) and lettered (L)

1 is yellow (Y) and numbered (N)

If you draw a numbered ball (N), the probability that this
ball is white (W) is 060

True

False

Question 5 What is the formula for the
break-even point of a simple profit model?

Fixed cost / variable cost per unit

(Selling price per unit â variable cost per
unit) / fixed cost

Fixed cost / (selling price per unit â
variable cost per unit)

Fixed cost / (variable cost per unit â
selling price per unit)

Selling price per unit â (fixed cost /
variable cost per unit)

Question 6 Arrivals in a university
advising office during the week of registration are known to follow a Poisson
distribution with an average of four people arriving each hour What is the
probability that exactly four people will arrive in the next hour?

01813

01865

01923

01954

Question 7 The economic order quantity
(EOQ) formula assumes that all input data are known with certainty

True

False

Question 8 The use of “expert
opinion” is one way to approximate subjective probability values

True

False

Question 9 Properties of the normal
distribution include:

a continuous bell-shaped distribution

a discrete probability distribution

the number of trials is known and is either
1, 2, 3, 4, 5, etc

the random variable can assume only a finite
or limited set of values

use in queuing

Question 10 Expressing profits through the
relationship among unit price, fixed costs, and variable costs is an example
of:

a sensitivity analysis model

a quantitative analysis model

a postoptimality relationship

a parameter specification model

none of the above

Question 11 A bakery buys sugar in 15-pound
bags The bakery uses 5000 bags of sugar each year Carrying costs are $20 per
bag per year Ordering costs are estimated at $5 per order Assume that the
bakery is open 250 days a year and its daily demand is estimated at 20 bags It
takes 5 days for each order of sugar to be filled What are the total annual
holding costs?

$500

$1000

$20

$750

$250

Question 12 A plant manager is considering
buying additional stamping machines to accommodate increasing demand The
alternatives are to buy 1 machine, 2 machines, or 3 machines The profits
realized under each alternative are a function of whether their bid for a
recent defense contract is accepted or not The payoff table below illustrates
the profits realized (in $000’s) based on the different scenarios faced by the
manager

Alternative
Bid Accepted Bid
Rejected

Buy 1 machine
$10 $5

Buy 2 machines
$30 $4

Buy 3 machines
$40 $2

Using the information above, which alternative should be
chosen based on the Laplace criterion?

Buy 1 machine

Buy 2 machines

Buy 3 machines

Question 13 Determining the average payoff
for each alternative and choosing the one with the best payoff is the approach
called:

maximax

maximin

Laplace

minimax regret

expected monetary value

Question 14 Bob White is conducting research
on monthly expenses for medical care, including over-the-counter medicine His
dependent variable is monthly expenses for medical care while his independent
variable is number of family members Below is his Excel output

Click here to view an Excel version of this output

Referring to the information above, based on his model, each
additional family member increases the predicted costs by how much?

$11047

$1683

$9364

$12730

Question 15 A controllable variable is also
called:

a parameter

a decision variable

a mathematical model

a measurable quantity

none of the above

Question 16 A seasonal index of __________
indicates that the season is average

100

Question 17 In the exponential smoothing
with trend adjustment forecasting method, missing something is the:

slope of the trend line

new forecast

Y-axis intercept

independent variable

trend smoothing constant

Points Received: 0 of 2

Question 18 Assume that you have an urn
containing 10 balls of the following description:

4 are white (W) and lettered (L)

2 are white (W) and numbered (N)

3 are yellow (Y) and lettered (L)

1 is yellow (Y) and numbered (N)

If you draw a lettered ball (L), the probability that this
ball is white (W) is 0571

True

False

Question 19 The condition of improper data
yielding misleading results is referred to as:

garbage in, garbage out

break-even point

uncontrollable variable

postoptimality

none of the above

Question 20 Bob White is conducting research
on monthly expenses for medical care, including over-the-counter medicine His
dependent variable is monthly expenses for medical care while his independent
variable is number of family members Below is his Excel output

Click here to view an Excel version of this output

Referring to the information above, what percent of the
variation in medical expenses is explained by the size of the family?

483%

496%

506%

513%

Question 21 Our department store is having a
sale on personal computers, of which three are in stock (no rain checks) There
is a certain probability of selling none The probability of selling one is
twice as great as the probability of selling none The probability of selling
two is three times the probability of selling none Finally, the probability of
selling all the personal computers is four times as great as the probability of
selling none

Using the above information, what is the probability of
selling no personal computers? Hint: Let the probability of selling none equal
x

005

008

Question 22 A medium-term forecast is
considered to cover what length of time?

2-4 weeks

1 month to 1 year

2-4 years

5-10 years

20 years

Question 23 If two events are mutually
exclusive, then:

their probabilities can be added

they may also be collectively exhaustive

the joint probability is equal to 0

if one occurs, the other cannot occur

All of the above

Question 24 Arrivals at a fast-food
restaurant follow a Poisson distribution with a mean arrival rate of 16
customers per hour What is the probability that in the next hour there will be
exactly 12 arrivals?

00000

00661

07500

01322

None of the above

Question 25 The Department of Motor Vehicles
(DMV) can service customers at a rate of 20 per hour (or 1/3 per minute) when
it comes to license renewals The service time follows an exponential
distribution What is the probability that it will take less than three minutes
for a particular customer to get a license renewal?

0368

0632

Question 26 Demand for soccer balls at a new
sporting goods store is forecasted using the following regression equation: Y =
98 + 22X where X is the number of months that the store has been in existence
Let April be represented by X= 4 April is assumed to have a seasonality index
of 115 What is the forecast for soccer ball demand for the month of April
(rounded to the nearest integer)?

123

107

100

115

None of the above

Question 27 The best model is a
statistically significant model with a high r-square and few variables

True

False

Question 28 Historical data indicates that
only 20% of cable customers are willing to switch companies If a binomial
process is assumed, then in a sample of 20 cable customers, what is the
probability that no more than three customers would be willing to switch their
cable?

085

015

020

0411

0589

Question 29 A seasonal index of 1 means that
the season is average

True

False

Question 30 Which of the following is true
regarding a regression model with multicollinearity, a high r2 value, and a low
F-test significance level?

The model is not a good prediction model

The high value of r2 is due to the
multicollinearity

The interpretation of the coefficients is
valuable

The significance level tests for the
coefficients are not valid

The significance level for the F-test is not
valid

Question 31 Bob White is conducting research
on monthly expenses for medical care, including over-the-counter medicine His
dependent variable is monthly expenses for medical care while his independent
variable is number of family members Below is his Excel output

Click here to view an Excel version of this output

Referring to the information above, the significance F-test,
is this model a good prediction equation?

Yes

Question 32 The length of time that it takes
the tollbooth attendant to service each driver can typically be described by
the:

normal distribution

uniform distribution

exponential distribution

Poisson distribution

None of the above

Question 33 Time-series models attempt to
predict the future by using historical data

True

False

Question 34 Daily demand for newspapers for
the last 10 days has been as follows: 12, 13, 16, 15, 12, 18, 14, 12, 13, 15
(listed from oldest to most recent) Forecast sales for the next day using a
two-day weighted moving average where the weights are 3 and 1 are:

145

135

1225

1275

Question 35 Our department store is having a
sale on personal computers, of which three are in stock (no rain checks) There
is a certain probability of selling none The probability of selling one is twice
as great as the probability of selling none The probability of selling two is
three times the probability of selling none Finally, the probability of
selling all the personal computers is four times as great as the probability of
selling none

Using the above information, what is the probability of
selling all three personal computers? Hint: Let the probability of selling none
equal x

032

036

044

Question 36 Bob White is conducting research
on monthly expenses for medical care, including over-the-counter medicine His
dependent variable is monthly expenses for medical care while his independent
variable is number of family members Below is his Excel output

Click here to view an Excel version of this output

Referring to the information above, what is the value of the
correlation coefficient?

55278

0695

0483

0474

Question 37 Loss of goodwill must be
included in stockout costs

True

False

Question 38 The probability, P, of any event
or state of nature occurring is greater than or equal to 0 and less than or
equal to 1

True

False

Question 39 As one increases the number of
periods used in the calculation of a moving average:

greater emphasis is placed on more recent
data

less emphasis is placed on more recent data

the emphasis placed on more recent data
remains the same

it requires a computer to automate the
calculations

one is usually looking for a long-term
prediction

Question 40 Which of the following methods
tells whether the forecast tends to be too high or too low?

MAD

MSE

MAPE

Decomposition

Bias

Question 41 A moving average forecasting
method is a causal forecasting method

True

False

Question 42 One purpose of regression is to
understand the relationship between variables

True

False

Question 43 When demand is constant, the
Reorder point (ROP) is a function of demand and lead time

True

False

Question 44 Which of the following is not
classified as a qualitative forecasting model?

Exponential smoothing

Delphi method

Jury of executive opinion

Sales force composite

Consumer market survey

Question 45 Consider the following gasoline
data:

Click here to view an Excel version of this table

Referring to the information above, what is the seasonal
index for fourth quarter?

1017

1175

977

899

Question 46 The classical method of
determining probability is:

subjective probability

marginal probability

objective probability

joint probability

conditional probability

Question 47 A consulting firm has received
two Super Bowl tickets from one of its clients To be fair, the firm is
randomly selecting two different employee names to “win” the tickets
There are six secretaries, five consultants and four partners in the firm
Which of the following statements is false?

The probability of a secretary winning a
ticket on the first draw is 6/15

The probability of a secretary winning a
ticket on the second draw given that a consultant won a ticket on the first
draw is 6/15

The probability of a consultant winning a
ticket on the first draw is 1/3

The probability of two secretaries winning
both tickets is 1/7

The probability of a partner winning a ticket
on the second draw given that a secretary won a ticket on the first draw is
4/14

Question 48 The EMV that a person is willing
to give up in order to avoid the risk associated with a gamble is referred to
as the:

risk premium

certainty equivalent

EVPI

EVwPI

EVSI

Question 49 Enrollment in a particular class
for the last four semesters has been 120, 126, 110, and 130 (listed from oldest
to most recent) What is the enrollment forecast for next semester using
exponential smoothing with an alpha = 02? Assume that an initial forecast for
the first semester was 120 (so the forecast and the actual were the same)

11896

12117

130

120

None of the above

Question 50 An urn contains seven blue and
three yellow chips If the drawing of chips is done with replacement, what is
the probability of drawing a blue chip on the second draw given that a yellow
chip was drawn on the first draw?

0027

0210

0300

0700