What is the purpose of inventory control?
> What is the meaning of mutually exclusive events? What is meant by collectively exhaustive? Give an example of each.
> Describe the use of sensitivity analysis and post optimality analysis in analyzing the results.
> What are the two basic laws of probability?
> List some sources of input data.
> What is Bayes’ Theorem, and when can it be used?
> Briefly trace the history of quantitative analysis. What happened to the development of quantitative analysis during World War II?
> In January 2012, Northern Airlines merged with Southeast Airlines to create the fourth largest U.S. carrier. The new North– South Airline inherited both an aging fleet of Boeing 727-300 aircraft and Stephen Ruth. Stephen was a tough for
> What is the quantitative analysis process? Give several examples of this process.
> What are the three categories of business analytics?
> Define quantitative analysis. What are some of the organizations that support the use of the scientific approach?
> What is the difference between quantitative and qualitative analysis? Give several examples.
> Discuss the role of sensitivity analysis in LP. Under what circumstances is it needed, and under what conditions do you think it is not necessary?
> The mathematical relationships that follow were formulated by an operations research analyst at the Smith–Lawton Chemical Company. Which ones are invalid for use in an LP problem, and why? Maximize profit = 4X1 + 3X1X2 + 8X2 + 5X3 subject to 2X1 + X2 +
> The production manager of a large Cincinnati manufacturing firm once made the statement, “I would like to use LP, but it’s a technique that operates under conditions of certainty. My plant doesn’t have that certainty; it’s a world of uncertainty. So LP c
> You have just formulated a maximization LP problem and are preparing to solve it graphically. What criteria should you consider in deciding whether it would be easier to solve the problem by the corner point method or the isoprofit line approach?
> It has been said that each LP problem that has a feasible region has an infinite number of solutions. Explain.
> It is important to understand the assumptions underlying the use of any quantitative analysis model. What are the assumptions and requirements for an LP model to be formulated and used?
> The Toledo Leather Company has been producing leather goods for more than 30 years. It purchases prepared hides from tanners and produces leather clothing accessories such as wallets, belts, and handbags. The firm has just developed a new leather product
> Explain how a change in a technological coefficient can affect a problem’s optimal solution. How can a change in resource availability affect a solution?
> Develop your own original LP problem with two constraints and two real variables. (a) Explain the meaning of the numbers on the right hand side of each of your constraints. (b) Explain the significance of the technological coefficients. (c) Solve you
> A linear program has a maximum profit of $600. One constraint in this problem is 4X + 2Y ≤ 80. Using a computer, we find the dual price for this constraint is 3, and there is a lower bound of 75 and an upper bound of 100. Explain what this means.
> A linear program has the objective of maximizing profit = 12X + 8Y. The maximum profit is $8,000. Using a computer, we find the upper bound for profit on X is 20 and the lower bound is 9. Discuss the changes to the optimal solution (the values of the var
> Discuss the similarities and differences between minimization and maximization problems using the graphical solution approaches of LP.
> If the ROP is greater than the order quantity, explain how the ROP is implemented. Can the ROP be more than twice the order quantity, and, if so, how is such a situation handled?
> What is the ROP? How is it determined?
> What are some of the assumptions made in using the EOQ?
> Why wouldn’t a company always store large quantities of inventory to eliminate shortages and stockouts?
> Under what circumstances can inventory be used as a hedge against inflation?
> After watching a movie about a young woman who quit a successful corporate career to start her own baby food company, Julia Day decided that she wanted to do the same. In the movie, the baby food company was very successful. Julia knew, however, that it
> Briefly describe what is meant by ABC analysis. What is the purpose of this inventory technique?
> Briefly explain the marginal analysis approach to the single-period inventory problem.
> When using safety stock, how is the standard deviation of demand during the lead time calculated if daily demand is normally distributed but lead time is constant? How is it calculated if daily demand is constant but lead time is normally distributed? Ho
> Briefly describe what is involved in solving a quantity discount model.
> What assumptions are made in the production run model?
> What is the purpose of sensitivity analysis?
> Why is inventory an important consideration for managers?
> Explain how the number of seasons is determined when forecasting with a seasonal component.
> Explain what would happen if the smoothing constant in an exponential smoothing model was equal to zero. Explain what would happen if the smoothing constant was equal to one.
> Describe briefly the steps used to develop a forecasting system.
> In 1979, Steve Blake founded Blake Electronics in Long Beach, California, to manufacture resistors, capacitors, inductors, and other electronic components. During the Vietnam War, Steve was a radio operator, and it was during this time that he became pro
> Explain what information is provided by the F test.
> Morgan Arthur has spent the past few weeks determining inventory costs for Armstrong, a toy manufacturer located near Cincinnati, Ohio. She knows that annual demand will be 30,000 units per year and that the carrying cost will be $1.50 per unit per year.
> Harrington Health Food stocks 5 loaves of Neutro- Bread. The probability distribution for the sales of Neutro-Bread is listed in the following table. How many loaves will Harrington sell on average? NUMBER OF LOAVES SOLD PROBABILITY 0 ……………………………………………
> Explain how the adjusted r2 value is used in developing a regression model.
> Which of the following are probability distributions? Why? (a) RANDOM VARIABLE X PROBABILITY 2 ………………………………………….………….. 0.1 -1 ……………………………………………….…….. 0.2 0 …………………………………………………….. 0.3 1 ………………………………………………..….. 0.25 2 …………………………………………………….. 0.15 (b)
> Develop your own set of constraint equations and inequalities, and use them to illustrate graphically each of the following conditions: (a) an unbounded problem (b) an infeasible problem (c) a problem containing redundant constraints
> Under what condition is it possible for an LP problem to have more than one optimal solution?
> Let the annual demand for an arbitrary commodity be 1,000 units per year and the associated EOQ be 400 units per order. Under this circumstance, the number of orders per year would be (D>Q) = 2.5 orders per year. How can this be so?
> Discuss the major inventory costs that are used in determining the EOQ.
> What is the objective of JIT?
> What is the difference between the gross and the net material requirements plans?
> What is the overall purpose of MRP?
> What happens to the production run model when the daily production rate becomes very large?
> Discuss how the coefficient of determination and the coefficient of correlation are related and how they are used in regression analysis.
> What is MAD, and why is it important in the selection and use of forecasting models?
> Describe briefly the Delphi technique.
> What effect does the value of the smoothing constant have on the weight given to the past forecast and the past observed value?
> What are some of the problems and drawbacks of the moving average forecasting model?
> What is a qualitative forecasting model, and when is it appropriate?
> What is the difference between a causal model and a time-series model?
> Explain when a CMA (rather than an overall average) should be used in computing a seasonal index. Explain why this is necessary.
> In using the decomposition method, the forecast based on trend is found using the trend line. How is the seasonal index used to adjust this forecast based on trend?
> How is the impact of seasonality removed from a time series?
> A seasonal index may be less than one, equal to one, or greater than one. Explain what each of these values would mean.
> Discuss the use of dummy variables in regression analysis.
> Explain how a plot of the residuals can be used in developing a regression model.
> What is the SSE? How is this related to the SST and the SSR?
> What is the difference between prior and posterior probabilities?
> What information should be placed on a decision tree?
> What is the overall purpose of utility theory?
> What is the break-even point? What parameters are necessary to find it?
> C. W. Churchman once said that “mathematics … tends to lull the unsuspecting into believing that he who thinks elaborately thinks well.” Do you think that the best QA models are the ones that are most elaborate and complex mathematically? Why?
> How is the efficiency of sample information computed?
> What is the EVSI? How is this computed?
> Managers are quick to claim that quantitative analysts talk to them in a jargon that does not sound like English. List four terms that might not be understood by a manager. Then explain in nontechnical language what each term means.
> Describe how you would determine the best decision using the EMV criterion with a decision tree.
> What is a random variable? What are the various types of random variables?
> What is implementation, and why is it important?
> Describe the characteristics of a Bernoulli process. How is a Bernoulli process associated with the binomial distribution?
> Give some examples of various types of models. What is a mathematical model? Develop two examples of mathematical models.
> What techniques are used to solve decision-making problems under uncertainty? Which technique results in an optimistic decision? Which technique results in a pessimistic decision?
> Explain how a scatter diagram can be used to identify the type of regression to use.
> Describe the various approaches used in determining probability values.
> What is a time-series forecasting model?
> What is the meaning of least squares in a regression model?
> Beverly Mills has decided to lease a hybrid car to save on gasoline expenses and to do her part to help keep the environment clean. The car she selected is available from only one dealer in the local area, but that dealer has several leasing options to a
> Define opportunity loss. What decision-making criteria are used with an opportunity loss table?
> Even though independent gasoline stations have been having a difficult time, Susan Solomon has been thinking about starting her own independent gasoline station. Susan’s problem is to decide how large her station should be. The annual r
> Mick Karra is the manager of MCZ Drilling Products, which produces a variety of specialty valves for oil field equipment. Recent activity in the oil fields has caused demand to increase drastically, and a decision has been made to open a new manufacturin
> In Problem 3-27, Farm Grown, Inc., has reason to believe the probabilities may not be reliable due to changing conditions. If these probabilities are ignored, what decision would be made using the optimistic criterion? What decision would be made using t
> Farm Grown, Inc., produces cases of perishable food products. Each case contains an assortment of vegetables and other farm products. Each case costs $5 and sells for $15. If there are any cases not sold by the end of the day, they are sold to a large fo
> Brilliant Color is a small supplier of chemicals and equipment that are used by some photographic stores to process 35mm film. One product that Brilliant Color supplies is BC-6. John Kubick, president of Brilliant Color, normally stocks 11, 12, or 13 cas
> In Problem 3-22, you helped Allen Young determine the best investment strategy. Now, Allen is thinking about paying for a stock market newsletter. A friend of Allen said that these types of letters could predict very accurately whether the market would b
> Mickey Lawson is considering investing some money that he inherited. The following payoff table gives the profits that would be realized during the next year for each of three investment alternatives Mickey is considering: (a) What decision would maxim
> In the Arnold’s Muffler example for the exponential distribution in this chapter, the average rate of service was given as 3 per hour, and the times were expressed in hours. Convert the average service rate to the number per minute and convert the times
> During normal business hours on the east coast, calls to the toll-free reservation number of the Nite Time Inn arrive at a rate of 5 per minute. It has been determined that the number of calls per minute can be described by the Poisson distribution. Find
> Nite Time Inn has a toll-free telephone number so that customers can call at any time to make a reservation. A typical call takes about 4 minutes to complete, and the time required follows an exponential distribution. Find the probability that a call tak
> Discuss the differences among decision making under certainty, decision making under risk, and decision making under uncertainty.
> For each of the following F values, determine whether the probability indicated is greater than or less than 1%: (a) P(F5,4 > 14) (b) P(F6,3 > 30) (c) P(F10,12 > 4.2) (d) P(F2,3 > 35) (e) P(F2,3 < 35)
> For each of the following F values, determine whether the probability indicated is greater than or less than 5%: (a) P(F3,4 > 6.8) (b) P(F7,3 > 3.6) (c) P(F20,20 > 2.6) (d) P(F7,5 > 5.1) (e) P(F7,5 < 5.1)
