Question 1:
Which of the following will not decrease system utilization?
Increase in arrival rate
Increase in service rate
Increase in the number of servers
Decrease in service time
Question 2:
In decision making, the choice of an appropriate criterion is dependent on:
the risk personality of the decision maker
the number of nodes in the decision tree.
the magnitude of the payoffs.
none of the above.
Question 3:
A tabular presentation that shows the outcome for each decision alternative under the various possible states of nature is called a:
decision tree.
payoff table.
feasible region.
payback matrix.
Question 4:
Which variable is not a component of break-even analysis?
Fixed costs
Variable costs
Number of employees
Selling price
Question 5:
The purpose of break-even analysis is to determine the number of units of a product to sell that will:
appeal to the consumer.
result in a profit.
result in a loss.
result in zero profit.
Question 6:
A model is a functional relationship that includes:
variables.
parameters.
equations.
all of the above.
Question 7:
A small entrepreneurial company is trying to decide between developing two different products that they believe they can sell to two potential companies, one large and one small. If they develop Product A, they have a 50% chance of selling it to the large company with annual purchases of about 20,000 units. If the large company won't purchase it, then they think they have an 80% chance of placing it with a smaller company, with sales of 15,000 units. On the other hand if they develop Product B, they feel they have a 40% chance of selling it to the large company, resulting in annual sales of about 17,000 units. If the large company doesn't buy it, they have a 50% chance of selling it to the small company with sales of 20,000 units. How many units of Product A can they expect to sell?
15,000
16,000
17,000
20,000
Question 8:
Mutually exclusive events are:
events with identical probabilities.
events that have no outcomes in common.
events that have no effect on each other.
events that are represented in a Venn diagram by two overlapping circles.
Question 9:
A business owner is trying to decide whether to buy, rent, or lease office space and has constructed the following payoff table based on whether business is brisk or slow.
Alternative Brisk Slow
Buy 90 -10
Rent 70 40
Lease 60 55
The equal likelihood criterion strategy is:
buy.
rent.
lease.
brisk.
Question 10:
The quantitative analysis approach requires:
mathematical expressions for the relationship.
uncomplicated problems.
the manager to have prior experience with similar problems.
access to a computer.
Question 11:
People who take a chance on a bonanza with a very low probability of occurrence in lieu of a sure thing are:
risk takers.
risk averters.
risk calculators.
risk predictors.
Question 12:
The limits of the problem and the degree to which it pervades other units in the organization must be included during the ________ step of the management science process.
observation
definition
solution
implementation
Question 13:
If fixed costs increase, but variable cost and price remain the same, the break-even point:
decreases.
increases.
remains the same.
may increase or decrease, depending on sales.
Question 14:
The area under the normal curve represents probability, and the total area under the curve sums to _____:
0
0.5
1
2
Question 15:
The maximax criterion results in the:
maximum of the minimum payoffs.
maximum of the maximum payoffs.
minimum of the maximum payoffs.
minimum of the minimum payoffs.
Question 16:
The indicator that results in total revenues being equal to total cost is called the:
marginal cost.
marginal volume.
break-even point.
profit mix.
Question 17:
The result of an effective decision making process should be monitored in order to:
reveal the break-even point.
reveal errors in the implementation.
keep fixed and variable costs distinct.
change the scientific method.
Question 18:
The ________ is computed by multiplying each decision outcome under each state of nature by the probability of its occurrence.
expected value
expected value of perfect information
expected opportunity loss
none of the above
Question 19:
The ________ is the expected value of the regret for each decision.
expected value
expected opportunity loss
expected value of perfect information
none of the above
Question 20:
Jim is considering pursuing an MS in Information Systems degree. He has applied to two different universities. The acceptance rate for applicants with similar qualifications is 20% for University X and 45% for University Y. What is the probability that Jim will be accepted at both universities?
.09
.20
.25
.65
0.2 x 0.45 = 0.09