BMDS 3371 Final Exam Complete Solution

Question: #1215

Final Exam -- BMDS 3371
Spring 2015

1. Arcs in a project network indicate
a. completion times.
b. precedence relationships.
c. activities.
d. None of the alternatives above is correct.

2. Activities G, P, and R are the immediate predecessors for activity W. If the earliest finish times for the three are 12, 15, and 10, then the earliest start time for W
a. is 10.
b. is 12.
c. is 15.
d. cannot be determined.

3. When activity times are uncertain,
a. assume they are normally distributed.
b. calculate the expected time, using (a + 4m + b)/6.
c. use the most likely time.
d. calculate the expected time, using (a + m + b)/3.

4. Slack equals
a. LF EF.
b. EF LF.
c. EF LS.
d. LF ES.

5. Activities with zero slack
a. can be delayed.
b. must be completed first.
c. lie on a critical path.
d. have no predecessors.

6. Inventory
a. is held against uncertain usage so that a supply of items is available if needed.
b. constitutes a small part of the cost of doing business.
c. is not something that can be managed effectively.
d. All of the alternatives are correct.

7. Inventory models in which the rate of demand is constant are called
a. fixed models.
b. deterministic models.
c. JIT models.
d. requirements models.

8. Safety stock
a. can be determined by the EOQ formula.
b. depends on the inventory position.
c. depends on the variability of demand during lead time.
d. is not needed if Q* is the actual order quantity.

9. Inventory position is defined as
a. the amount of inventory on hand in excess of expected demand.
b. the amount of inventory on hand.
c. the amount of inventory on hand plus the amount of inventory on order.
d. None of the alternatives is correct.

10. For the EOQ model, which of the following relationships is incorrect?
a. As the order quantity increases, the number of orders placed annually decreases.
b. As the order quantity increases, annual holding cost increases.
c. As the order quantity increases, annual ordering cost increases.
d. As the order quantity increases, average inventory increases.

11. In the latter part of the class, we discussed at some length the case study entitled, “What’s Happening?” Ultimately, the solution to the problem the owners are experiencing MUST involve…
a. a different forecasting method. The one they are using now does NOT have the minimal values of MAE or MSE.
b. more careful monitoring of inventory levels as well as usage of safety stock so as to avoid stock outs from recurring.
c. further study of their customer base so as to better understand the reasons for the declining demand.
d. use of a stochastic inventory management model such as the EOQ.
12. Decision makers in queuing situations attempt to balance
a. operating characteristics against the arrival rate.
b. service levels against service cost.
c. the number of units in the system against the time in the system.
d. the service rate against the arrival rate.

13. If arrivals occur according to the Poisson distribution every 20 minutes, then which is NOT true?
a. = 20 arrivals per hour
b. = 3 arrivals per hour
c. = 1/20 arrivals per minute
d. = 72 arrivals per day

14. In a waiting line situation, arrivals occur, on average, every 10 minutes, and 10 units can be received every hour. What are  and ?
a. = 10, = 10
b. = 6, = 6
c. = 6, = 10
d. = 10, = 6

15. The total cost for a waiting line does NOT specifically depend on
a. the cost of waiting.
b. the cost of service.
c. the number of units in the system.
d. the cost of a lost customer.

16. For many waiting line situations, the arrivals occur randomly and independently of other arrivals and it has been found that a good description of the arrival pattern is provided by
a. a normal probability distribution.
b. an exponential probability distribution.
c. a uniform probability distribution.
d. a Poisson probability distribution.

17. All of the following are true about time series methods except
a. They discover a pattern in historical data and project it into the future.
b. They involve the use of expert judgment to develop forecasts.
c. They assume that the pattern of the past will continue into the future.
d. Their forecasts are based solely on past values of the variable or past forecast errors.

18. Forecast errors
a. are the difference in successive values of a time series
b. are the differences between actual and forecast values
c. should all be nonnegative
d. should be summed to judge the goodness of a forecasting model

19. MAE and MSE for a given set of data will be
a. about the same for all data since they are both positive
b. different since one is square of the other
c. different in general, though both will be positive
d. different in general, though both will be negative

20. To select a value for alpha when using exponential smoothing
a. use a small alpha when the series varies substantially.
b. use a large alpha when the series has little random variability.
c. use a value between 0 and 1
d. All of the alternatives are true.

21. A company produces the financial results shown in the table below. The executives at the firm have good reason to believe that $10 million in sales will be generated in 2010. Using simple linear regression, you advise them that this will equate to…

Year Sales Totals (in millions) Profit Totals (in millions)
1998 $7.0 $0.15
1999 $2.0 $0.10
2000 $6.0 $0.13
2001 $4.0 $0.15
2002 $14.0 $0.25
2003 $15.0 $0.27
2004 $16.0 $0.24
2005 $12.0 $0.20
2006 $14.0 $0.27
2007 $20.0 $0.44
2008 $15.0 $0.34
2009 $7.0 $0.17

a. $209,600 in profits.
b. $2,096,000 in profits.
c. $186,900 in profits.
d. $1,869,000 in profits.

22. When the CEO asks you how sure you are of the accuracy of the result provided in Problem #21 above, you show her the r-squared value and respond…
a. “54% sure.”
b. “67% sure.”
c. “84% sure.”
d. “93% sure.”

23. Given the following linear programming problem with two non-negative variables
(X1 and X2 ), find the range of feasibility for the RHS of the second constraint shown below (hint: both constraints are binding)
Max:
Constraints:

Variables are non-negative

a. [52,780]
b. [62.4,90]
c. [52,62.4]
d. [62.4,780]

24. In a transportation problem with 5 supply points, 3 demand points, and total supply equaling total demand, the number of decision variables will be

a. 5
b. 8
c. 15
d. 125

25. In the linear programming formulation of the transportation problem, cost of transporting one unit of the material from a supply point to a demand point appears in

a. the objective function only
b. the constraints only
c. both objective function and constraints
d. neither objective function nor constraints

Solution: #1212

BMDS 3371 Final Exam Complete Solution

Final Exam -- BMDS 3371
Spring 2015

1. Arcs in a project network indicate
a. completion times.
b. precedence relationships.
c. activities.
d. None of the alternatives above is correct.

4. Slack equals
a. LF EF.
b. EF LF.
c. EF LS.
d. LF ES.

5. Activities with zero slack
a. can be delayed.
b. must be completed first.
c. lie on a critical path.
d. have no predecessors.

7. Inventory models in which the rate of demand is constant are called
a. fixed models.
b. deterministic models.
c. JIT models.
d. requirements models.

9. Inventory position is defined as
a. the amount of inventory on hand in excess of expected demand.
b. the amount of inventory on hand.
c. the amount of inventory on hand p...