1. In the growth stage of a product’s life cycle, a usual operations strategy will  be:

a. Increasing capacity.
b. Short production runs.
c. Cost minimization.
d. Increases in process stability.

2. Which statement is true?

a. The mission statement precedes analysis of external and internal factors.
b. Market segments are selected previous to development of the mission statement.
c. Functional strategy is formulated previous to corporate strategy.
d. The marketing functional strategy dictates the products and services which the firm will offer.

3. Product innovation rates are a(an):

a. A goal-based measure.
b. A corporate goal.
c. A productivity measure.
d. An external factor.

4. In decision theory, the three states of nature are:

a. Local, regional, and national.
b. Low, medium, and high
c. Short-term, mid-term, and long-term.
d. Certainty, uncertainty, and risk.

5. Simple or single-stage decision making models are characterized by:

a. Event nodes.
b. Decision nodes.
c. Decision arrows.
d. Conditional payoff tables or matrices.
e. Decision “chains”.

6. Under uncertainty, the risk averter decision criterion is:

a. LaPlace.
b. Maxi-max.
c. Expected value.
d. Maxi-min.

7. When probabilities are assigned to events, the decision maker might use:

a. The pessimistic criterion.
b. The equally-likely criterion.
c. The expected opportunity loss criterion.
d. The optimistic criterion.

8. Advantage of simulation modelling is:

a. It produces the optimal solution to the problem.
b. It permits the inclusion of real-world complications.
c. It could be used in similar problem applications with only slight modifications.
d. It forces managers to recognize every single relevant variable within the  problem.

9. Options in designing simulation models include all except:

a. Repeating-  versus  non-repeating random numbers.
b. Most versus all relevant variables.
c. One versus several random number strings.
d. Time-incrementing versus event-incrementing.

10. Which of the following probability distributions can't be simulated?

a.  normal.         b. poisson.     c.  uniform.    d.  all can be simulated.

11. The service facility is a combination of:

a. Arrival rates and service rates.
b. Servers and customers.
c. Queue length and queue discipline.
d. Channels and phases.

12. In queuing problems, the calling population is either:

a. Known or unknown.
b. Finite or infinite.
c. Single or multi-phased.
d. Random or scheduled.

13. A maintenance shop employing one mechanic and servicing 50 machines will be described as a:

a. Single-channel, priority system.
b. Multi-channel, infinite calling population system.
c. Single-channel, finite calling population  system.
d. Multi-channel, finite calling population system.

14. The likelihood that a decision-maker will ever receive a return equal to the expected opportunity loss ( EOL ) when making the actual decision is:

a. 100%
b. Dependent on the event probabilities.
c. 0%
d. Dependent on the number of states of nature.

15. Commonly obtained measures of a queuing system’s performance include:

a. Average time each customer spends in the system, and the probability that the service system would be idle.
b. The average queue length, and the maximum time a customer might spend in the queue.
c. Maximum queue length, and the probability of a specific number of customers in the system.
d. Average queue length, and the probability that the waiting time will exceed a specified  period.

True or False: ( choose the one correct response )

16. Bayes Theorem provides the justification for employing the expected value decision criterion.

TRUE          FALSE

17. Decision trees are solved by starting in the present and working into the future.

TRUE          FALSE

18. In a decision tree, the node, o , represents an “event”.

TRUE          FALSE

19. Combining “randomness” and “long-term event probabilities” results in the duplication of  “reality” in simulation modeling.

TRUE          FALSE

20. Some proposed courses of action may be run simultaneously through a simulation model, so as to save time and expense.

TRUE          FALSE

21. “Lambda” ( λ ) is the Greek character used to denote the average service rate in queuing theory.

TRUE          FALSE

22. In a restaurant, the average time spent in the system is the time between a customer’s arrival and departure.

TRUE          FALSE

23. The most common queuing models assume a service rate that is normally-       distributed.

TRUE          FALSE

24. A simulation is  iconic  when the relevant variables of the system being simulated exhibit chance in their behaviour.

TRUE          FALSE

25. Random number intervals are based on cumulative probability distributions.

TRUE          FALSE

26. Results of simulation experiments with large numbers of trials will generally be better than those with fewer trials.

TRUE          FALSE

27. Given the value of “lambda” ( λ ) , a theoretical frequency distribution for system arrivals can be established.

TRUE          FALSE

28.  In queuing problems, the term reneging refers to the fact that some customers switch queues before receiving service.

TRUE          FALSE

29.  All queuing systems exhibit first-in, first-out queue discipline.

TRUE          FALSE

30.  In queuing theory, the theoretical frequency distribution of system arrivals should be statistically identical to the observed distribution of system arrivals.

TRUE          FALSE

PRACTICAL  PROBLEMS  Multiple Choice ( select the one correct response )

31. In problem one, the best strategy under the maxi-min decision criterion is:

a.  Homes , $65,000.00
b.  Homes , $86,000.00
c.  Apartments , $72,000.00
d.  Condos , $23,000.00

32.  In problem one, the best strategy under the mini-max regret decision criterion is

a.  Apartments , $119,000.00
b.  Apartments , $120,000.00
c.  Condos , $71,000.00
d.  Condos , $168,000.00

33.  In problem one, the best strategy under the EOL decision criterion is:

a.  Apartments , $71,700.00
b.  Homes , $72,500.00
c.  Apartments , $120,000.00
d.  Homes , $137,000.00

40.  In problem two, the proportion of the time that the employee would be busy is:

a.  60 %
b.  50 %
c.  13 %
d.  none of the above.

41.  In problem two, the average number of people just waiting in line to get some information is:

a.  2.00
b.  0.50
c.  0.25
d.  none of the above.

42.  In problem two, the expected time that a person would spend just waiting in line to have his/her problem(s) answered is:

a.  1 minute
b.  2 minutes
c.  4 minutes
d.  none of the above.

PRACTICAL PROBLEMS

Problem No. 1

The construction manager for Acme, Inc. must decide whether to build single-family homes, apartments, or condominiums. She estimates annual profits would vary with the economy, as follows

Probabilities    30%    40%    30%
Weak Economy    Normal Economy    Strong Economy
Homes    $191,000.    $86,000.    $65,000.
Apartments    $72,000.    $164,500.    $82,000.
Condominiums    $23,000.    $93,500.    $202,000.

REQUIREMENT:

1. Choose the best strategy under:

a. The Maxi-Min decision criterion.
b. The Mini-Max Regret decision criterion.
c. The Expected Opportunity Loss decision criterion

Problem No. 2

A new shopping mall is considering setting up an information desk staffed by one employee. Based on information obtained from similar information desks, it is believed that people would arrive at the desk at the rate of fifteen per hour. It takes an average of two minutes to answer a problem. It is assumed that arrivals are Poisson-distributed and that answer times are negative-exponentially-distributed.

REQUIREMENT:

1. find out the proportion of the time which the employee will be busy.

2. find out the average number of people just waiting in line to get some information.

3. find out the expected time a person will spend just waiting in line to have his/her problem(s) answered.