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Managerial Decision Modeling w/ Spreadsheets, 3e (Balakrishnan/Render/Stair)

Chapter 6 Integer, Goal, and Nonlinear Programming Models
6.1 Chapter Questions
1) These are problems in which some, but not all, the decision variables must have integer solutions:
A) mixed IP problems
B) pure IP problems
C) pure binary problems
D) mixed binary IP problems
E) goal programming problems
Answer: A
Page Ref: 212
Topic: Introduction
Difficulty: Easy
2) These are problems in which all decision variables must have integer solutions:
A) mixed binary IP problems
B) pure binary IP problems
C) mixed IP problems
D) pure IP problems
E) goal programming problems
Answer: D
1
Copyright (c) 2013 Pearson Education, Inc. publishing as Prentice Hall
Page Ref: 212
Topic: Introduction
Difficulty: Easy
3) Rounding off the solution to an LP relaxed problem may yield:

A) an infeasible solution
B) a non-optimal solution
C) a higher objective function value
D) an unbounded solution
E) A or B
Answer: E
Page Ref: 212
Topic: Models with General Integer Variables
Difficulty: Moderate
2
4) A company wants to select 2 products from a set of four possible products. Which of the following
constraints ensures that no more than 3 will be selected?
A) XA + XB + XC + XD = 3
B) XA + XB + XC + XD ≥ 0
C) XA + XB + XC + XD ≤ 3
D) XA + XB + XC + XD ≥ 3
E) XA + XB + XC + XD ≠ 3
Answer: C
Page Ref: 222
Topic: Models with Binary Variables
5) A company wants to select one product from a set of 3 possible products. Which of the following
ensures that only one product will be selected?
A) XA + XB + XC = 1
B) XA + XB + XC ≤ 1
C) XA + XB + XC ≥ 1
D) XA + XB + XC ≥ 0
E) XA - XB - XC = 1
Answer: A
Page Ref: 222
6) If a company produces product A then it must also produce either product B or product C. Which of
the following constraints enforces this condition?
A) XA - XB - XC ≥ 0
B) XA + XB + XC ≤ 2
C) XA + (XB - XC) ≤ 0
D) XA + XB + XC ≥ 2
E) XA - XB - XC ≤ 0
Answer: E
Page Ref: 222
7) Which type of cost is independent of the volume of production?

A) inventory cost
B) marginal cost
C) sunk cost
D) variable cost
E) fixed charge
Answer: E
Page Ref: 226
Topic: Mixed Integer Models: Fixed-Charge Problems
Difficulty: Easy
3
8) A company incurs a cost that is directly proportional to the magnitude of the decision variable. This
is an example of a:
A) fixed charge
B) sunk cost
C) variable cost
D) marginal cost
E) inventory cost
Answer: C
Page Ref: 226
Difficulty: Easy
9) Consider a model with 3 ranked goals. Solving this model requires us to solve:
A) a single LP problem
B) 3 separate LP problems
C) 2 separate LP problems
D) a single quadratic programming problem
E) 3 quadratic programming problems
Answer: B
Page Ref: 238
Topic: Goal Programming Models
10) If a company produces Product A, then it must produce at least 200 units of Product A. Which of
the following constraints model this condition?
A) X1Y1 ≤ 200
B) X1 ≥ 200 + Y1
C) X1 ≤ 200Y1
D) X1 - 200Y1 ≥ 0
E) X1 > 200
Answer: D
Page Ref: 244
Topic: Nonlinear Programming Models
4
11) An investment strategy restricts the portfolio to a mix of two stocks A and B with the following
price/share and annual returns:
Stock Price/Share Annual Return

A $35 5%
B $45 7%
Assume that the maximum amount available for investment is $100,000 with the following 2 prioritized
investment goals:
Rank R1: Obtain an annual return of at least 6%.

Rank R2: Limit the investment in stock B to no more than 55% of the total investment.
Assume X1 = dollar amount allocated to stock A, and X2 = dollar amount allocated to stock B.
What is the objective function?

A) Min d1+ + d2-
B) Min R2(d1+) + R1(d2-)
C) Min R1(d1-) - R2(d2+)
D) Min R1(d1+) + R2(d2-)
E) Min R1(d1-) + R2(d2+)
Answer: E
Page Ref: 237
12) Problems which can be stated as an assortment of desired objectives are known as:
A) quadratic programming
B) integer programming
C) goal programming
D) linear programming
E) binary programming
Answer: C
Page Ref: 230
Difficulty: Easy
5
13) Suppose that XA equals 10. What are the values for d1+ and d1- in the following constraint?
XA + d1-- d1+ = 7
A) d1- = 0, d1+ = 3
B) d1-= 3, d1+ = 0
C) d1- = 7, d1+ = 0
D) d1- = 0, d1+ = 7
E) d1- = 10, d1+ = 3
Answer: A
Page Ref: 233
Difficulty: Easy
14) Consider the following constraint that needs to be expressed as a goal:

3X1 + 4X2 ≤ 11.
The correct format is:
A) 3X1 + 4X2 - d1- + d1+ = 11
B) 3X1 + 4X2 + d1- - d1+ = 11
C) 3X1 + 4X2 + d1- - d1+ ≥ 11
D) 3X1 + 4X2 + d1- - d1+ ≤ 11
E) 3X1 + 4X2 + d1- - d1+ ≠ 11
Answer: B
Page Ref: 233
15) The deviational variable di‾ indicates the amount by which a certain goal is:
A) overachieved
B) over attained
C) binding
D) underachieved
E) non-binding
Answer: D
Page Ref: 232
Difficulty: Easy
16) Which of the following statements about nonlinear programming is FALSE?

A) Either the objective function or at least one constraint is nonlinear.
B) The optimal solution must be a corner point solution.
C) There can be both local and global optimal solutions.
D) There is no precise way to know where to start the solution search process.
Answer: B
Page Ref: 242
6
17) Nonlinear programming models can be approximated by linear or almost linear models through a
procedure known as ________.
A) separable programming
B) goal programming
C) integer programming
D) quadratic programming
E) mixed integer programming
Answer: A
Page Ref: 248
18) The "bin" option is used in Solver to specify general integer variables.
Answer: FALSE
Page Ref: 216
Difficulty: Easy
19) Consider the following constraint and its associated binary decision variables:
XA + XB + XC ≥ 2.
This constraint is an example of a mutually exclusive constraint.
Answer: FALSE
Page Ref: 222
20) Consider the following constraint and its associated binary variables: XA + XB = 1.
This constraint is an example of an if-then constraint.
Answer: FALSE
Page Ref: 222
21) In mixed IP problems, some, but not all, of the decision variables have integer solutions.
Answer: TRUE
Page Ref: 227
22) The optimal solution to an IP model must be at a corner point of the feasible region.
Answer: FALSE
Page Ref: 214
23) In goal programming, the objective is typically to maximize the sum of the deviational variables.
Answer: FALSE
Page Ref: 231
Difficulty: Easy
7
24) Deviational variables assume the value zero if a goal is completely attained.
Answer: TRUE
Page Ref: 233
Difficulty: Easy
25) The deviational variable di- typically denotes underachievement.

Answer: TRUE
Page Ref: 232
Difficulty: Easy
26) If overachievement is acceptable, the appropriate di+ variable can be dropped from the objective
function.
Answer: TRUE
Page Ref: 233
Difficulty: Easy
27) Consider the following objective function with prioritized goals: Min: R1(d1-) + R2(d1-).
This implies that goal 2 is of higher rank than goal 1.
Answer: FALSE
Page Ref: 237
Difficulty: Easy
28) A goal programming problem assumes that its objective function and constraints are linear.
Answer: TRUE
Page Ref: 241
Difficulty: Challenging
29) When an objective function contains squared terms, and the problem's constraints are linear, it is
referred to as a quadratic programming problem.
Answer: TRUE
Page Ref: 247
30) The IP solution can sometimes produce a better objective function value than its LP relaxed
problem.
Answer: FALSE
Page Ref: 214
8
31) Rounding off the solution to an LP relaxation problem may sometimes yield an infeasible solution to
an IP problem.
Answer: TRUE
Page Ref: 214
Difficulty: Easy
32) An integer programming problem assumes that its objective function and its constraints are linear.
Answer: TRUE
Page Ref: 213
33) The optimal solution of to an NLP model must be a corner point of the feasible region.
Answer: FALSE
Page Ref: 241
34) An NLP model can have both local and global optimal solutions.
Answer: TRUE
Page Ref: 242
Difficulty: Easy
35) There is no precise way to know where to start the solution search process for an NLP model.
Answer: TRUE
Page Ref: 242
Difficulty: Easy
9
6.2 Excel Problems
1) Mr. Smith, an avid reader, must decide on which books to take with him during a long flight. Mr.
Smith will use his carry-on bag, which can hold a maximum of 20 pounds. Mr. Smith has attached a
satisfaction index for each book, based on a 5-point scale (1 = low satisfaction, 5 =high satisfaction), as
shown below.
Book Satisfaction Index Weight (lbs.)

Marketing 4 4
History 5 3
Statistics 1 3
Management 3 5
Finance 3 4
Economics 2 3
Excel 5 4
Access 4 5
Which books should Mr. Smith take with him on the flight to maximize his satisfaction index?
Answer:
10
Use this information for the following questions.
Six products are currently waiting processing on a single machine. The machine is available today for a
maximum of 25 hours. The processing time per hour for each product along with the profit contribution
per product is show below.
Product Profit Contribution Processing Time (Hours)

A $55 5
B $70 4
C $45 6
D $60 5
E $50 3
F $65 6
2) Refer to the information above. Which products should be processed to maximize the total profit
contribution?
Answer:
11
3) Refer to the information above. Assume that the following conditions must be met:
a) We want to ensure that exactly one of these products: A, B, or C must be processed.
b) We want to ensure that if product E is processed then product F must be processed.
Which products should be processed to maximize the total profit contribution?
Answer:
12
Use this information to answer the following questions.
A decision maker is provided with 5 different potential projects and must determine which projects to
choose. The projects require different amounts of capital and different expected net present values
(NPV) over the next three years.
NVP Capital Required (in $000s)

Project (in $000s) Year 1 Year 2 Year 3
1 140 70 20 25
2 180 85 40 15
3 120 60 20 20
4 80 30 30 15
5 200 50 15 10
4) Determine which set of projects should be selected in order to achieve the maximum net present value
if the decision maker has $150,000 available for investment each year.
Answer:
13
5) Refer to the information above. Determine which set of projects should be selected in order to
achieve the maximum net present value if the following two conditions must also be met:
a) If project 1 is selected, then project 2 must be selected, and vice versa.
b) Since projects 4 and 5 require outsourcing various operations, the decision maker wants at most one
of these projects to be included in the solution and not both.
Answer:
14
6) A company currently has two factories: F1 and F2, and three retail outlets: R1, R2, and R3. The
shipping costs per unit along with the monthly capacity and demand requirements are summarized
below:
Shipping Cost Per Unit
R1 R2 R3 Supply
F1 $3 $2 $4 100
F2 $1 $3 $5 200
Demand 100 100 200
The firm has decided to build a new factory to expand its productive capacity. The two sites being
considered are Philadelphia and Pittsburgh. The estimated shipping costs for the new factories along
with their estimated fixed cost and production capacity are summarized below:
R1 R2 R3 Supply Fixed Cost

Philadelphia $2 $4 $3 100 $20,000
Pittsburgh $3 $5 $2 100 $25,000
Which of the new locations will yield the lowest cost in combination with the existing factories and
retail outlets?
Answer:
15
7) A company produces four products each of which must undergo assembly, inspection, and packaging.
The information below summarizes the hours required for each operation by each product, the total
hourly capacity for each operation, and the fixed cost incurred by each product if it is produced.
Hours Required
Available
Operation Product 1 Product 2 Product 3 Product 4 Hours
Assembly 3 4 5 4 500
Inspection 2 1 3 2 300
Packaging 1 1 2 2 200
Fixed Cost $1100 $1000 $900 $850
Each unit of product 1 sold will contribute $60 to profit, and each unit of products 2, 3, and 4 contributes
$65, $70, and $55, respectively. What is the optimal product mix?
Answer:
16
8) A city is reviewing the location of its fire stations. The city is made up of a number of districts, as
illustrated below. A fire station can be placed in any district and is able to handle the fires for both its
neighborhood and any adjacent neighborhood. The objective is to minimize the number of fire stations
used.
Answer:
17
9) An investor is considering 7 different stocks: A, B, C, D, E, F, and G. The expected annual return for
each stock is provided as follows:
Annual
Stock Return
A 9.5%
B 8.0%
C 7.0%
D 10.0%
E 8.0%
F 9.0%
G 10%
The investor has imposed the following restrictions regarding the composition of the portfolio:
• the portfolio must include exactly one of the following stocks: either A or B.
• if stock B is selected, then stock F must also be selected.
• if stock D is selected, then stock E must be excluded.
Which stocks should be included in the portfolio to maximize annual return?
Answer:
18
10) A company is considering producing 8 different products for the upcoming holiday season. The
profit contribution per product is illustrated below:
Product Profit ($)

1 10
2 12
3 7
4 15
5 8
6 9
7 13
8 11
The marketing manager has imposed the following restrictions on the production mix:
• Since products 1, 2, and 3 are electronic gadgets, at least two of these products must be in the
production mix.
• Since products 4 and 5 are kids-oriented, the production mix must include no more than one of these
products.
• If product 7 is included in the mix, then product 8 must be included, and vice versa.
Which products should be included in the mix to maximize profit?
Answer:
19
11) A developer wishes to expand an office complex and needs to determine how many small, medium,
and large offices to include in the expansion. Each small office requires 400 square feet, each medium
office requires 700 square feet, and each large office requires 1200 square feet. The current square
footage available for expansion is 35,000 square feet. The developer expects to pay $10,000 for each
small office, $20,000 for each medium office, and $35,000 for each large office. The developer wishes
to limit his expenditures to $500,000. How many of each type of office should be built if the following
goals, stated in no particular order, must be met?
Goal 1: The expansion should include approximately 6 small offices.

Goal 2: The expansion should include approximately 11 medium offices.
Goal 3: The expansion should include approximately 15 large offices.
Goal 4: The expansion should consist of approximately 35,000 square feet.
Goal 5: The expansion should cost approximately $500,000.
Answer:
20
12) Consider the following linear programming problem:
Max: 500A + 700B
Subject to:
2A + 3B ≤ 35 (assembly hours)
3A + 5B ≤ 40 (machine hours)
Reformulate and solve this problem as a goal programming problem if the following goals, stated in no
particular order, must be met.
Goal 1: Produce at least 15 units of each product.

Goal 2: Avoid overtime in the assembly and machine departments.
Goal 3: Achieve at least $100,000 in profit.
Answer:
21
Max: 500A + 700B
Subject to:
Reformulate and solve this problem as a goal programming problem if the following goals, with their
associated weights, must be met.
Goal 1: Produce at least 15 units of product A; Weight 15

Goal 2: Produce at least 15 units of product B; Weight 15
Goal 3: Minimize overtime in assembly department; Weight 25
Goal 4: Minimize overtime in machine department; Weight 25
Goal 5: Achieve at least $100,000 in profit; Weight 20
Answer:
22
Max: 500A + 700B
Subject to:
Reformulate and solve this problem as a goal programming problem if the following prioritized goals
must be met.
Goal Priority
Produce at least 15 units of each product. P1
Minimize overtime in assembly and machine departments. P2
Achieve at least $100,000 in profit. P3
Answer:
23
15) A marketing manager is considering the following advertising media to promote a new
product.
Type Audience Reached/Ad Cost/Ad Maximum No. of Ads

TV 50,000 $3000 10
Radio 25,000 $1000 15
Newspaper 10,000 $500 30
The marketing manager has established the following goals, stated in no particular order, for the
advertising campaign:
Goal 1: Reach at least 500,000 individuals.

Goal 2: Limit the total spending to $150,000.
Formulate and solve this goal programming problem.
Answer:
24
16) A marketing manager is considering the following advertising media to promote a new
product.
Type Audience Reached/Ad Cost/Ad Maximum No. of Ads

TV 50,000 $3000 10
Radio 25,000 $1000 15
Newspaper 10,000 $500 30
The marketing manager has established the following goals and weights:
Goal 1: Reach at least 500,000 individuals; Weight 40.

Goal 2: Limit the total spending to $150,000; Weight 60.
Formulate and solve this goal programming problem.
Answer:
25
17) Set up and solve the following nonlinear programming problem using Excel:
Max: 10X1 + 15X2 + 5X3 + 2X33

Subject to
X1 + X2 + X3 ≤ 50
2X1 + 3X2 ≤ 150
X1, X2, X3≥ 0
Answer:
Max: X1 + 2X2 + 3X1X2 + 5X33

Subject to
X1 + X2 + X3 ≤ 75
X1 + X2 ≥ 15
2X1 + 2X3 ≤ 40
X1, X2, X3 ≥ 0
Answer:
26
Max: (X1 - 5)2 + (X2 - 7)2

Subject to
X1 ≤ 15
X2 ≤ 15
X1 + X2 ≥ 10
X1, X2 ≥ 0
Answer:
27
20) Consider the following profit expected from each dollar (Xi) spent in the following advertising
media:
Medium Profit
TV 0.0005Xi3
Radio 0.0025Xi2
Newspaper 0.01Xi
How should the advertising budget be allocated if the company wants to spend at least $1000 on each
medium without exceeding its $10,000 budget?
Answer:
28

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Managerial Decision Modeling with

Spreadsheets 3rd Edition Balakrishnan Test

Test Bank: https://testbankpack.com/p/test-bank-for-managerial-decision-

Solution Manual: https://testbankpack.com/p/solution-manual-for-

Managerial Decision Modeling w/ Spreadsheets, 3e (Balakrishnan/Render/Stair)

6.1 Chapter Questions

3) Rounding off the solution to an LP relaxed problem may yield:

7) Which type of cost is independent of the volume of production?

Stock Price/Share Annual Return

Rank R1: Obtain an annual return of at least 6%.

What is the objective function?

14) Consider the following constraint that needs to be expressed as a goal:

16) Which of the following statements about nonlinear programming is FALSE?

25) The deviational variable di- typically denotes underachievement.

Book Satisfaction Index Weight (lbs.)

Product Profit Contribution Processing Time (Hours)

Which products should be processed to maximize the total profit contribution?

NVP Capital Required (in $000s)

R1 R2 R3 Supply Fixed Cost

Which stocks should be included in the portfolio to maximize annual return?

Product Profit ($)

Which products should be included in the mix to maximize profit?

Goal 1: The expansion should include approximately 6 small offices.

Goal 1: Produce at least 15 units of each product.

Goal 1: Produce at least 15 units of product A; Weight 15

Type Audience Reached/Ad Cost/Ad Maximum No. of Ads

Goal 1: Reach at least 500,000 individuals.

Formulate and solve this goal programming problem.

Type Audience Reached/Ad Cost/Ad Maximum No. of Ads

Goal 1: Reach at least 500,000 individuals; Weight 40.

Formulate and solve this goal programming problem.

Max: 10X1 + 15X2 + 5X3 + 2X33

Max: X1 + 2X2 + 3X1X2 + 5X33

Max: (X1 - 5)2 + (X2 - 7)2

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