2. Managers can use simulation to obtain optimal answers for a wide range of problems.

● True
● False

3. After some experimentation, you have determined that you have a biased coin. The probability
of heads is 0.6 and the probability of tails is 0.4. If you flip this coin 25 times, how many times
would you expect to observe the result "tails"?
● 15
● 25
● 20
● 10

4. After reviewing past history you have assembled the following table showing the frequency of
certain levels of sales over the past 40 months. If the smallest random number used to represent
sales of 200 units is 0.45, what will be the largest number used to represent sales of 200 units?

Sales (units) Frequency Corresponding Random

Numbers

100 12

150 6

200 8 0.45 < x <??

250 4

300 10

● 0.7500
● 0.6500
● 0.4500
● (d napict)

5. In a model of a stochastic system, the simulation clock is mainly used to

● Determine how fast the computer can run the simulation.

● measure the number of events that will happen during the simulation.
● determine the amount of simulated time that has elapsed at any point in the simulation.
● determine how much computer time to use for the simulation.
6. You have determined that waiting times at a Jolly-B restaurant are uniformly distributed over
the interval 5 to 12 minutes. The first random number your simulation returns is 0.2154. What is
the waiting time that this random number generates?
● 1.0 min
● 5.5 mins
● 6.5 mins
● 4.5 mins

7. You have determined that waiting times at a restaurant are uniformly distributed over the
interval 5 to 12 minutes. What formula would you use in Excel to generate random values in this
range that follow the uniform distribution?
● 5+ (12+5) ×RAND().
● =(12-5) × RAND().
● =12+(12-5) × RAND().
● =5+(12-5) × RAND().

8. Service times at a doctor's office take an average of 40 minutes. It seems likely that. service
times follow an exponential distribution. In a simulation, the random number 0.7588 is
generated. How long it will be until the next simulated arrival occurs?
● 12 minutes
● 11 minutes
● 16 minutes
● 19 minutes

9. Computers can simulate years of operation in seconds.

● True
● False

10. Which of the following is NOT a step in the process of conducting a simulation study?
● All of the answers choices are steps in the simulation process
● Collect the data and formulate the simulation model.
● Plan the simulations to be performed.
● Check the accuracy of the simulation model.

11. You have been asked to simulate the process of "flipping" two identical, unbiased coins.
How many possible outcomes exist for this process? (Hint: Once the coins are flipped it is
impossible to tell which is which.)
● 2
● 1
● 3
● 4
12. If the RSPE Model Analysis indicates that the model is quadratic, which of the
following is TRUE?
● The model can be solved using linear programming tools
● The Evolutionary Solver will always find the optimal solution
● The model contains functions such as "IF" or "ROUND."
● None of the choices is true.

13. A Toy Company offers two different prices on its products, depending upon the quantity
purchased. Since available resources are limited, the firm would like to prepare an optimal
production plan to maximize profits. Product 1 has the following profitability: P75 each for the
first 25 units and P60 for each unit over 25. Product 2's profitability is P200 each for the first 50
units and P100 each for each unit over 50. The products each require two raw materials to
produce (see table below for usages and available quantities).

Raw Material Product 1 usage Product 2 usage Available Quantity

(gallons per Unit) (gallons per Unit) (gallons)

A 10 20 1,500

B 5 7 2,000

Use separable programming to find the optimal production plan,

● 200 units Product 1, 50 units Product 2
● 100 units Product 1, 25 units Product 2
● 50 units Product 1, 50 units Product 2
● 100 units Product 1. 75 units Product 2

14. Which of the following can be part of a nonlinear profit graph?

I. Decreasing marginal returns.
II. Increasing marginal returns.
III. Discontinuities.
● I, II, and III
● I only
● I and II only
● Ill only

15. Decreasing marginal returns violates which assumption of linear programming?

● The proportionality assumption
● None of the choices is correct.
● The additivity assumption
 ● The divisibility assumption

16. Which of the following is an example of a nonlinear function?

● Profit = 8x1x2-x12 - 4x₂2
● Profit = 8x1x2-x12-4x2
● Profit = 5x1 + 7x2 - 2x2
● None of the choices is correct.

17. When there are decreasing marginal returns:

● the slope of the graph never increases but sometimes decreases.
● the slope of the graph never decreases but sometimes increases.
● the graph always consists of a smooth curve.
● the graph always consists of a series of line segments.

18. A nonlinear function may contain which of the following?

I. A term that contains a single variable with an exponent of 1.

II. A term that contains a single variable with an exponent of 2.
III. A term that is a constant times the product of two variables.

● Ill only
● II and III only
● I, II, and III
● I only

19. A linear function may contain which of the following?

I. A term that contains a single variable with an exponent of 1.

II. A term that contains a single variable with an exponent of 2.
III. A term that is a constant times the product of two variables.

● ll only
● Ill only
● I and II only
● I only

20. A nonlinear programming problem may have:

I. Activities with increasing marginal returns.

II. Activities with decreasing marginal returns.
III. Nonlinear functional constraints.
 ● I only
● ll only
● II and III only
● I, II, and III

21. Note: This problem requires Excel.

A soap manufacturer offers three different prices on its products, depending upon the quantity
purchased. Since available resources are limited, the firm would like to prepare an optimal
production plan to maximize profits. Product 1 has the following profitability: P10 each for the
first 50 units, P9 each for units 51-100, and P8 for each unit over 100. Product 2's profitability is
P20 each for the first 25 units, P19 each for units 26-50, and P18 each for each unit over 50. The
products each require 3 raw materials to produce (see table below for usages and available
quantities).

Raw Material Product 1 usage Product 2 usage Available Quantity

(pounds per Unit) (pounds per Unit) (pounds)

A 5 12 1,000

B 4 10 2,000

C 7 6 1,500

Use separable programming to find the optimal production plan.

● 100 nits Product 1 100 units Product 2
● 140 units Product 1, 25 Units Product 2
● (dnapict)
● (dnapict)

22. Pepito's Furniture Manufacturing Company has the capability to produce both chairs and
tables. Both products use the same materials (wood, nails and paint) and both have a setup cost
(P100 for chairs, P200 for tables). The firm earns a profit of P20 per chair and P65 per table and
can sell as many of each as it can produce. The daily supply of wood, nails and paint is limited.
To manage the decision-making process, an analyst has formulated the following linear
programming model:
Which of the following would be a reasonable value for the variable "M"?

● 10
● 1
● 100
● (dnapict)

23. Tee-Shirt at Sando Ko Company has prepared the following binary integer program to
evaluate a number of potential locations for new warehouses. The firm's goal is to maximize the
net present value of their decision while not spending more than their currently available capital.

Which of the constraints ensures that at least two of the potential sites will be selected?

● Constraint 3
● Constraint 2
● Constraint 5
● Constraint 4
24. Partner-Mo-Partner-Ko Investment Company has prepared the following binary integer
program to evaluate a number of potential new capital projects. The investment company's goal
is to maximize the net present value of their decision while not spending more than their
currently available capital.

Which of the constraints ensures that at least two of the potential projects will be
selected?
● Constraint 4
● Constraint 2
● (dnapict)
● (dnapict)

25. Mang Tomas Manufacturing Company has prepared the following binary integer program to
evaluate a number of potential locations for new warehouses. The firm's goal is to maximize the
net present value of their decision while not spending more than their currently available capital.

Which of the constraints enforces a mutually exclusive relationship?

 ● Constraint 1
● Constraint 2
● Constraint 4
● Constraint 3

26. Golden-Ribbon a bakery produces both pies and cakes. Both products the same materials
(flour, sugar and eggs) and both have a setup cost (P100 for cakes, P200 for pies). The baker
earns a profit of P10 per cake and P12 per pie and can sell as many of each as it can produce.
The daily supply of flour, sugar and eggs is limited. To manage the decision-making process, an
analyst has formulated the following linear programming model (assume that it is possible to
produce fractional pies and cakes for this example):

Which of the constraints limit the amount of raw materials that can be consumed?
● Constraint 3
● Constraint 1
● (dnapict)
● (dnapict)

27. Goldie-Luck bakery produces both pies and cakes. Both products use the same materials
(flour, sugar and eggs) and both have a setup cost (P100 for cakes, P200 for pies). The baker
earns a profit of P10 per cake and P12 per pie and can sell as many of each as it can produce.
The daily supply of flour, sugar and eggs is limited. To manage the decision-making process, an
analyst has formulated the following linear programming model (assume that it is possible to
produce fractional pies and cakes for this example):
Which of the following would be a reasonable value for the variable "M"?
● 100
● 1,000
● (dnapict)
● (dnapict)

28. The Best Computer Manufacturing Corporation produces both laptops and desktops. Laptops
generate a profit of P50 each and desktops have a profit margin of P35 each. To produce each
item, a setup cost is incurred. This setup cost of P500 for laptops and $400 for desktops. Laptops
consume 4 units of raw material A and 5 units of raw material B. Desktops consume 6 units of
raw material A and 2 units of raw material B. Each day, the manufacturer has 500 units of each
raw material available.

Set up the problem in Excel and find the optimal solution. What is the maximum profit possible?

● P3,500
● P1,500
● P2,500
● P4,500

29. Kotseko Corporation has prepared the following binary integer program to evaluate a number
of potential new capital projects. The corporation's goal is to maximize the net present value of
their decision while not spending more than their currently available capital
Which of the constraints enforces a contingent relationship?
● Constraint 3
● Constraint 4
● Constraint 2
● Constraint 5

30. Marikina Shoe Company has prepared the following binary integer program to evaluate a
number of potential locations for new warehouses. The firm's goal is to maximize the net present
value of their decision while not spending more than their currently available capital.

Which of the constraints enforces a contingent relationship?

● Constraints 5
● .
● .
31. GatasNgBayan Manufacturing Corporation has prepared the following binary integer
program to evaluate a number of potential new capital projects. The firm's goal is to maximize
the net present value of their decision while not spending more than their currently available
capital.

Which of the constraints enforces a mutually exclusive relationship?

● Constraint 2
● Constraint 4
● Constraint 3
● Constraint 5

32. Based on the following payoff table, answer the following:

Alternative High Low

Buy 90 -10

Rent 70 40

Lease 60 55

Prior Probability 0.4 0.6

The maximax strategy is:

● Rent
● Buy
● .

33. The head of operations for a movie studio wants to determine which of two new scripts they
should select for their next major production. She feels that script #1 has a 70% chance of
earning $100 million over the long run, but a 30% chance of losing $20 million. If this movie is
successful, then a sequel could also be produced, with an 80% chance of earning $50 million, but
a 20% chance of losing $10 million. On the other hand, she feels that script #2 has a 60 % chance
of earning $120 million, but a 40% chance of losing $30 million. If successful, its sequel would
have a 50% chance of earning $80 million and a 50% chance of losing $40 million. As with the
first script, if the original movie is a "flop," then no sequel would be produced.

What would be the total payoff is script #1 were a success, but its sequel were not?
● $190 million
● $90 million
● $100 million
● $9 million

34. Refer to the following payoff table:

State of Nature

Alternative S1 S2

A1 75 -40

A2 0 100

Prior Probability 0.6 0.4

There is an option of paying $100 to have research done to better predict which state of nature
will occur. When the true state of nature is 51, the research will accurately predict $1 60% of the
time. When the true state of nature is 52, the research will accurately predict 52 80% of the time.

Given that the research is done, what is the joint probability that the state of nature is 52 and the
research predicts $2?
● 0.12
● 40
● .
● .

35. The operations manager for Pasada bus company wants to decide whether he should
purchase a small, medium, or large new bus for his company. He estimates that the annual profits
(in P000) will vary depending upon whether passenger demand is low, moderate, or high, as
follows.
If he uses the maximum likelihood criterion, which size bus will he decide to purchase?
● Large
● Small
● .
● .

36. Based on the following payoff table, answer the following:

Alternative High Low

Buy 90 -10

Rent 70 40

Lease 60 55

Prior Probability 0.4 0.6

The maximin strategy is:

● High
● Lease
● Rent
● Buy.
37. Based on the following payoff table, answer the following:

Alternative Yes No

Small 10 30

Medium 20 40
 Medium Large 30 45

Large 40 35

Extra Large 60 20

Prior Probability 0.3 0.7

The maximax strategy is:

● Small
● Large or Extra Large
● .
● .

38. Based on the following payoff table, answer the following:

Alternative High Low

Buy 90 -10

Rent 70 40

Lease 60 55

Prior Probability 0.4 0.6

The expected value of perfect information is:

● 43
● 12
● .
● .

39. Two professors at a nearby university want to co-author a new textbook in either economics
or statistics. They feel that if they write an economics book they have a 50% chance of placing it
with a major publisher where it should ultimately sell about 40,000 copies. If they can't get a
major publisher to take it, then they feel they have an 80% chance of placing it with a smaller
publisher, with sales of 30,000 copies. On the other hand if they write a statistics book, they feel
they have a 40% chance of placing it with a major publisher, and it should result in ultimate sales
of about 50,000 copies. If they can't get a major publisher to take it, they feel they have a 50%
chance of placing it with a smaller publisher, with ultimate sales of 35,000 copies.
What is the probability that the economics book would wind up being placed with a smaller
publisher?
● 0.3
● 0.6
● 0.4
● 0.8

40. Two professors at a nearby university want to co-author a new textbook in either economics
or statistics. They feel that if they write an economics book they have a 50% chance of placing it
with a major publisher where it should ultimately sell about 40,000 copies. If they can't get a
major publisher to take it, then they feel they have an 80% chance of placing it with a smaller
publisher, with sales of 30,000 copies. On the other hand if they write a statistics book, they feel
they have a 40% chance of placing it with a major publisher, and it should result in ultimate sales
of about 50,000 copies. If they can't get a major publisher to take it, they feel they have a 50%
chance of placing it with a smaller publisher, with ultimate sales of 35,000 copies.

What is the expected payoff for the decision to write the economics book?

● 32.000 copies
● 52,000 copies
● 22,000 copies
● 92,000 copies

41. The construction manager ABC Construction must decide whether to build single family
homes, apartments, or condominiums. He estimates annual profits (in $000) will vary with the
population trend as follows:

If he uses the maximum likelihood criterion, which kind of dwellings will he decide to build?
 ● Single Family

42. Customers arrive at a suburban ticket outlet at the rate of 14 per hour on Monday mornings
(exponential interarrival times). Selling the tickets and providing general information takes an
average of 3 minutes per customer, and varies exponentially. There is 1 ticket agent on duty on
Mondays.

How many minutes does the average customer spend in the system?
● 10
● 11
● 23
● 07

43. A small popular restaurant at an interstate truck stop provides priority service to truckers.
The restaurant has ten tables where customers may be seated. The service time averages 40
minutes once a party is seated. The customer arrival rate is 12 parties per hour, with the parties
being equally divided between truckers and non truckers.

On average, how much longer in minutes do parties of non-truckers spend in the system,
compared to parties of truckers?

● 15
● 11
● 16
● 23

44. Customers arrive at a suburban ticket outlet at the rate of 14 per hour on Monday mornings
(exponential interarrival times). Selling the tickets and providing general information takes an
average of 3 minutes per customer, and varies exponentially. There is 1 ticket agent on duty on
Mondays.

What is the system utilization?

● 0.6
● 0.7
● 0.3
● 0.5

45. For a single-server queueing system, which of the following is TRUE?

I.A high utilization factor will result in a system that performs well.
II. A high utilization factor will result in a system that performs poorly.
III. A low utilization factor will result in a system that performs efficiently.

● ll only
● Ill only
● I and II only
● I only

46. Customers filter into a record shop at an average of 1 per minute (exponential
interarrivals) where the service rate is 15 per hour (exponential service times).

What is the system utilization factor if 5 servers are used?

● 2.4
● 0.8
● 0.4
● 1.2

47. A firm has two separate phone systems for customers to use when contacting the firm. A
manager is considering combining the two systems into a single system (with the same number
of total servers as the two existing systems). What is likely to be the result of this change?
(HINDI ITO SURE KASI DI MASEARCH SA INTERNET HULAAN NIYO NA LANG)

I. The new system will have higher utilization of servers.

II. The new system will have longer wait times for customers.
III. The new system will have shorter wait times for customers.

● ll only
● Ill only
● I only
● All Choices

48. A multiple-server system has customers arriving at an average rate of five per hour and an
average service time of forty minutes. The minimum number of servers for this system to have a
utilization factor under 1 is:
● 8
● 3
● 7
● 4
49. A single-server queueing system has an average service time of 16 minutes per customer,
which is exponentially distributed. The manager is thinking of converting to a system with a
constant service time of 16 minutes. The arrival rate will remain the same. The effect will be to:

● increase the utilization factor.

● decrease the average time.
● increase the average waiting time.
● decrease the utilization factor.

50. Which of the following is not an assumption of a multiple priority queueing model?

● Exponential interarrival times.

● Exponential service times.
● Customers are processed in the order of arrival.
● All of the answers choices are assumptions of a multiple priority queueing model.

51. Customers arrive at a suburban ticket outlet at the rate of 14 per hour on Monday mornings
(exponential interarrival times). Selling the tickets and providing general information takes an
average of 3 minutes per customer, and varies exponentially. There is 1 ticket agent on duty on
Mondays.

What is the average number of customers waiting in line?

● 3.256
● 1.893
● 1.633
● 4.555