FORMATIVE: WAITING LINE SIMULATION

1. Businesses with long lines are likely to experience ALL of the following EXCEPT:
ANSWER: Better products

2. Suppose that past data on customer service times from similar ATMs describes a normal
probability distribution with a mean of 2 minutes and a standard deviation of 0.5 minutes.
Compute for the customer service time for a generated random number of 0.372._____
ANSWER: 1.8 minutes

3. A simulation model that evaluates a system which do not change or evolve over time are
referred to as dynamic simulation model.
ANSWER: FALSE

4. For the Hammondsport ATM system, the minimum interarrival time is a=0 minutes, and the
maximum interarrival time is b= 5 minutes. A second random number of r= 0.555 generates an
interarrival time for customer 2. Compute for the arrival of customer 2 after the simulation begins
if customer 1 arrives 2.3 minutes after the simulation begins.
ANSWER: 5.1 minutes

5. For the Hammondsport ATM system, the minimum interarrival time is a=0 minutes, and the
maximum interarrival time is b= 5 minutes. Assume that the simulation run begins at time = 0
and a generated random number for the first customer is r = 0.919. Compute for the generated
interval time for customer 1.
ANSWER: 4.6 minutes

6. Simulation models that takes into account how the system changes or evolves overtime is
referred to as static simulation models.
ANSWER: FALSE

7. Suppose the start time for customer 1 is 3.4 minutes and the service time is 1.9 minutes.
Compute for the completion time for customer 1.
ANSWER: 5.3 minutes
FORMATIVE: INVENTORY

1.Tommy orders baking equipment, according to the EOQ model with each order being for 50
units. Their carrying cost is 10%, and their order cost is P200. The equipments were purchased
at a price of P800 each.

1.1 How much is the minimum inventory cost at the EOQ level? (ri 8)
a. 3,000
b. 3,500
c. 4,000
d. 3,850

1.2 What is the annual value of the equipment purchased by Tommy? (ri 6)
a. 300,000
b. 400,000
c. 30,000
d. 40,000

1.3 How much is the optimal value per order?

a. 25,558
b. 40,000
c. 50,000
d. 30,000

1.4. What is the optimal number of orders per year?

a. 10
b. 12
c. 8
d. 100

2. Inventory: (ri 9)
a. Constitutes a small part of the cost of doing business.
b. Is not something that can be managed effectively.
c. All of the alternatives are correct.
d. Is held against uncertain usage so that a supply of items is available if needed. K5

3. What is the term used for the cost incurred in maintaining an inventory?
a. Ordering cost
b. Variable cost
c. Carrying cost k10
d. Fixed cost

4. A company is planning to stock a new SKU which is classified as an A inventory item. The
annual usage for this SKU is 5,350 units, cost of the SKU is P360 per unit, ordering cost is P50
per order, carrying cost is 25% per year of inventory value held.

4.1 Determine the optimal number of orders per year. (ri 2)

a. 60 orders per year
b. 50 orders per year
c. 59 orders per year
d. 69 orders per year
4.2 Determine the total annual value usage.
a. 1,230,987
b. 1,245,350
c. 1,150,637
d. 1,926,000

5. The time between placing orders is the lead time.

a. True
b. False

6. Constant demand is a key assumption of the EOQ model.

a. True
b. False

7. To be considered as inventory, goods must be finishes and waiting for delivery (ri 7)
a. True
b. False

8. A company is planning to stock a new SKU which is classified as an A inventory item. The
company has the following information, annual usage is 5,000 units, cost of the SKU is P300,
ordering cost is P30 per order, and carrying cost is 10 percent per year of average inventory
value held.

8.1 How much is the optimal value per order? (ri 10)
a. 33,000
b. 30,000
c. 38,300
d. 43,300

8.2 How much is the minimum inventory cost at the EOQ level?
a. 2,500
b. 3,000 k8
c. 3,850
d. 3,500

8.3 Determine the optimal number units per order? (ri 5)

a. 100 k2
b. 75
c. 150
d. 60

8.4 What is the optimal number of orders per year? (ri 1)

a. 5
b. 25
c. 50 k1
d. 500

9.Caroline the owner of Caroline’s Boutique, Ltd. estimates that will sell 40 decorator table this
year worth 10,000 dollars. Her Accountants have determined that ordering costs amount to 25
dollars per order and that the carrying costs amount to 12 ½ percent of the average inventory.
9.1 How much is the total inventory cost of ordering 10 times a year?
a. 278
b. 264
c. 313
d. 332

9.2 How much is the total inventory cost of ordering 8 times a year?
a. 278
b. 264
c. None of the choices
d. 250

10. Which cost would not be considered part of a holding cost? (ri 4)
a. Warehouse overhead
b. Cost of capital
c. Insurance cost
d. Shipping cost

11. In the EOQ model, the average inventory per cycle over many cycles is Q/2. (ri 3)
a. True k7
b. False

12. The EOQ model

a. Minimizes both ordering and holding costs
b. Considers total cost
c. Determines only how frequently to order
d. All of the alternatives are correct

FORMATIVE: FORECASTING METHODS

1. The forecasting method that is appropriate when the time series has no significant trend,
cyclical, or seasonal effect is
ANSWER: Moving averages

2. A qualitative forecasting method that obtains forecasts through “group consensus” is known
as the
ANSWER: Delphi approach

3. Quantitative forecasting methods do not require that patterns from the past will necessarily
continue in the future.
ANSWER: False

4. One measure of the accuracy of a forecasting model is the

ANSWER: Mean absolute deviation

5. Linear trend is calculated as T_t = 28.5 + .75t. The trend projection for period 15 is
ANSWER: 39.75

6. Causal models
ANSWER: attempt to explain a time series' behavior

7. Forecast errors
ANSWER: are the differences between actual and forecast values

8. Time series methods base forecasts only on past values of the variables
ANSWER: True

9. Qualitative forecasting techniques should be applied in situations where time series data
exists, but where conditions are expected to change.
ANSWER: True

10. Time series methods:

ANSWER: discover a pattern in historical data and project it into the future.

11. A four-period moving average forecast for period 10 would be found by averaging the values
from periods 10, 9, 8, and 7.
ANSWER: FALSE
LINEAR PROGRAMMING- FORMATIVE

1. Decision variables:
a. Must exist for each constraint
b. Represent the values of the constraint
c. Tell how much or how many of something to produce, invest, purchase, hire, etc.
d. Measure the objective function

2. Which of the following statements is not true?

a. An optimal solution satisfies all constraints
b. A feasible solution point does not have a lie on the boundary of the feasible region
c. A feasible solution satisfies all constraints
d. An infeasible solution violates all constraints

3. To find the optimal solution to a linear programming problem using the graphical method
a. Find the feasible point that is the farthest away from the origin
b. Find the feasible point that is closest to the origin
c. None of the alternatives is correct
d. Find the feasible point that is at the highest location

5. Apply linear programming to this problem. A one-airplane wants to determine the best mix of
passengers to serve each day. The airplane seats 25 people and flies 8 one-way segments per
day. There are two types passengers: first class (F) and coach (C). The cost of serve each first
class passenger is 15 dollars per segment and the cost to serve each other passenger is 10
dollars per segment. The marketing objectives of the airplane owner are to carry at least 13 first
class passenger segments and 67 coach passenger segments each day. In addition, in order to
break even, they must at least carry a minimum of 110 total passenger segments each day.
Which of the following is one of the constraints for this linear program?
a. 15F + 10C => 110
b. 13F + 67C => 110
c. 1F => 13
d. None of the choices
e. 13F + 67C =< (80/200)
f. 1F + 1C => 80

6. Apply linear programming to this problem. A firm wants to determine how many units of each
of two products (products X and Y) they should produce in order to make the most money. The
profit from making a unit of product X is 190 dollars and the profit from making a unit of product
Y is 112 dollars. The firm has a limited number of labor hours and machine hours to apply to
these products. The total labor hours per week are 3,000. Product X takes 2 hours of labor per
unit and Product Y takes 6 hours of labor per unit. The total machine hours available are 750
per week. Product X takes 1 machine hour per unit and Product Y takes 5 machine hours per
unit. Which of the following is one of the constraints for this linear program?

a. 2x+6y =>750
b. None of the choices
c. 2x+5y = 3,000
d. 1x+3y =< 3,000
e. 1x+5y =< 750
f. 2x+6y => 3,000
7. In a linear programming problem, the objective function and the constraints must be linear
functions of the decision variables.
a. True
b. False

8. The constraint 2x - Y = 0 passes through the point (200,100).

a. True
b. False

9. Apply linear programming to this problem. David and Harry operate a discount jewelry store.
They want to determine the best mix of customers to serve each day. There are two types of
customers for their store, Retail ®, and Wholesale (W). The cost to service a retail customer is
70 dollars and the cost to serve a wholesale customer is 89 dollars. The average profit from
either kind of customer is the same. To meet headquarter’s expectations, they must serve at
least 8 retail customers and 12 wholesale customers daily. In addition, in order to cover their
salaries, they must at least serve 30 customers each. Which of the following is one of the
constraints for this model?

a. 8R + 12W => 30
b. 1R + 1W => 30
c. 1R + 1W =< 8
d. 1R => 12
e. 20 x (R+W) => 30
f. None of the choices

10. The following five inequalities define a feasible region. Which one of these could be
removed from the list without the region?
a. None of the choices
b. X - 2y => -8
c. -X + Y =< 10
d. Y => 0
e. X => 0
f. X + Y =< 20

11. An optimal solution to a linear programming problem can be found at an extreme point of the
feasible region for the problem.
a. True
b. False

12. An objective function in a linear program can be which of the following?

a. None of the choices
b. A maximization function
c. A quadratic maximization function
d. An uncertainty quantity
e. A nonlinear maximization function
f. A divisible additive function
LINEAR PROGRAMMING- ENABLING

1. Which of the following is the graph of the constraints from an LP problem?

 a. A
b. B
c. C
d. D F1
e. E

2. Which of the following graphs corresponds to the inequality y>3x?

 a. A
b. B
c. C
d. D N2
e. E

3. Which of the following graphs corresponds to the inequality y< 5x + 9?

a. A
b. B M3
c. C
d. D
e. E

4. A man and his daughter manufacture unfinished tables and chairs. Each table requires 4
hours of sawing and 1 hour of assembly. Each chair requires 2 hours of sawing and 1 hour of
assembly. The two of them can put in up to 12 hours of sawing and 5 hours of assembly work
each day. Find a system of inequalities that describes all possible combinations of tables and
chairs that they can make daily. Graph the feasible region.

a. A
b. B
c. C
d. D
e. E M5

5. Jim Jones manufactures inexpensive set-it-up-yourself furniture for students. He currently

makes two products-bookcases and tables, each contributes 6 dollars and 5 dollars to profit,
respectively. Each product passes through two manufacturing points, cutting, and finishing.
Bookcases take 4 hours a unit in cutting and 4 hours in finishing. Tables require 3 hours a unit
in cutting and 5 in finishing. There are currently 40 hours available in cutting and 30 in finishing.

Find the optimal solution that maximizes profit using the graphical method and excel solution
method.

6. Which of the following graphs corresponds to the inequality x=< -4?

 a. A
b. B
c. C F6
d. D
e. E

7. Which of the following graphs corresponds to the inequality y < 7x + 9?

a. A
 b. B
c. C
d. D
e. E
f. None of the choices M1

8. Which of the following is the graph of the constraints from an LP problem?

a. A
b. B
c. C
d. D
 e. E
f. None of the choice

9. Which of the following is the graph of the constraints from an LP problem?

a. A
b. B
c. C
 d. D
e. E ata

10. Which of the following is the graph of the constraints from an LP problem?

a. A
b. B
c. C
d. D n1
e. E

11. Which of the following graph corresponds to the inequality 7x - 4y <= 6?

 A. M2
B.
C.
D.
E.

12. A cat food manufactures uses fish and beef by products.

A.
B.
C M6
D.
E.
13. Which of the following graph corresponds to the inequality y>= -1?

A.
B.
C. r6
D.
E.

14.
A.
B.
C. N1
D.
E.

15. Which of the following graph corresponds to the inequality 9x+5y<=13?

A.
B.
C.
D. B1
E.