1) There is considerable overlap in the scientific method and management science techniques. Which of the following steps is shared between them?
A) observation
B) problem definition
C) model construction
D) implementation
2) Which of the following is incorrect with respect to the use of models in decision making?
A) They improve understanding of the problem.
B) They promote subjectivity in decision making.
C) They are generally easy to use.
D) They provide a systematic approach to problem solving.
3) The field of management science
A) approaches decision making irrationally with techniques based on the scientific method.
B) is another name for management or human resources management.
C) concentrates on the use of quantitative methods to assist managers in decision making.
D) is completely separate and distinct from all other disciplines.
4) The processes of problem observation
A) cannot be done until alternatives are proposed.
B) requires consideration of multiple criteria.
C) is the first step of decision making.
D) is the final step of problem solving.
5) 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.
A) observation
B) definition
C) solution
D) implementation
6) ________ involves determining the functional relationship between variables, parameters, and equations.
A) Problem observation
B) Problem definition
C) Model construction
D) Model solution
7) Which steps of the management science process can either be a recommended decision or information that helps a manager make a decision?
A) model implementation
B) problem definition
C) model solution
D) problem formulation
8) The quantitative analysis approach requires
A) mathematical expressions for the relationship.
B) uncomplicated problems.
C) the manager to have prior experience with similar problems.
D) access to a computer.
9) The earliest developments and use of management science techniques was in the field of
A) military operations.
B) railroads.
C) politics.
D) manufacturing.
10) The result of an effective decision making process should be monitored in order to
A) reveal the break-even point.
B) reveal errors in the implementation.
C) keep fixed and variable costs distinct.
D) change the scientific method.
11) The management science process does not include
A) feedback.
B) implementation.
C) subjective preference.
D) information.
12) The indicator that results in total revenues being equal to total cost is called the
A) marginal cost.
B) marginal volume.
C) break-even point.
D) profit mix.
13) Variable cost
A) depends on the number of units produced.
B) plus marginal cost equals fixed cost.
C) is equal to total cost in deterministic models.
D) is the same as average cost.
14) The components of break-even analysis are
A) cost and profit.
B) volume and cost.
C) volume, cost and profit.
D) volume and profit.
15) ________ are generally independent of the volume of units produced and sold.
A) Fixed costs
B) Variable costs
C) Profits
D) Average cost
16) The purpose of break-even analysis is to determine the number of units of a product to sell that will
A) appeal to the consumer.
B) result in a profit.
C) result in a loss.
D) result in zero profit.
17) Variable cost does not include
A) raw materials and resources.
B) staff and management salaries.
C) material handling and freight.
D) direct labor and packaging.
18) Which variable is not a component of break-even analysis?
A) fixed costs
B) variable costs
C) number of employees
D) number of customers
19) At the break-even point,
A) total revenue equals total cost.
B) profit is maximized.
C) revenue is maximized.
D) costs are minimized.
20) If the price increases, but fixed and variable costs do not change, the break-even point
A) decreases.
B) increases.
C) remains the same.
D) may increase or decrease, depending on sales.
21) If the price decreases, but fixed and variable costs do not change, the break-even point
A) decreases
B) increases
C) remains the same
D) may increase or decrease, depending on sales
22) The term ________ refers to testing how a problem solution reacts to changes in one or more of the model parameters.
A) graphical solution
B) decision analysis
C) sensitivity analysis
D) break-even analysis
23) If fixed costs decrease, but variable cost and price remain the same, the break-even point
A) decreases.
B) increases.
C) remains the same.
D) may increase or decrease depending on sales.
24) If fixed costs increase, but variable cost and price remain the same, the break-even point
A) decreases.
B) increases.
C) remains the same.
D) may increase or decrease depending on sales.
25) EKA manufacturing company produces part #2206 for the aerospace industry. Each unit of part #2206 is sold for $15. The unit production cost of part #2206 is $3. The fixed monthly cost of operating the production facility is $3000. How many units of part #2206 have to be sold in a month to break even?
A) 166.67
B) 200
C) 250
D) 500.