1)Andre Candess manages an office supply store. One product in the store is computer paper. Andre

knows that 10,000 boxes will be sold this year at a constant rate throughout the year. There are 250

working days per year and the lead-time is 3 days. The cost of placing an order is $30, while the

holding cost is $15 per box per year. How many units should Andre order each time?

            A)500

            B)100

            C)400

            D)200

            E)none of the above

2)R.C. Barker makes purchasing decisions for his company. One product that he buys costs $50 per

unit when the order quantity is less than 500. When the quantity ordered is 500 or more, the price

per unit drops to $48. The ordering cost is $30 per order and the annual demand is 7,500 units. The

holding cost is 10 percent of the purchase cost. If R.C. wishes to minimize his total annual

inventory costs, he must evaluate the total cost for two possible order quantities. What are these

two possible quantities? (Round answer to nearest unit.)

            A)306 and 50

            B)300 and 500

            C)300 and 306

D)200 and 306

E)none of the above

3)The demand during the lead time is normally distributed with a mean of 40 and a standard

deviation of 4. If they have calculated a reorder point of 46.60 units, what service level are they

assuming?

            A)97.5 percent

            B)85 percent

            C)90 percent

            D)95 percent

            E)none of the above

4)Which of the following does not have an impact on EOQ?

            A)order cost

            B)demand per unit time

            C)safety stock

D)all of the above

E)none of the above 

5) The annual demand for a product has been projected at 2,000 units. This demand is assumed to be

constant throughout the year. The ordering cost is $20 per order, and the holding cost is 20 percent

of the purchase cost. Currently, the purchase cost is $40 per unit. There are 250 working days per

year. Whenever an order is placed, it is known that the entire order will arrive on a truck in 6 days.

Currently, the company is ordering 500 units each time an order is placed. What is the total

holding cost for the year using this policy?

A)$4,000

            B)$8,000

            C)$2,000

            D)$400

            E)none of the above

6)Rolf Steps is the production manager for a local manufacturing firm. This company produces

staplers and other items. The holding cost is $2 per unit per year. The cost of setting up the

production line for this is $25. There are 200 working days per year. The production rate for this

product is 80 per day. If the production order quantity is 200 units, what was the daily demand

(rounded to the nearest whole unit)?

            A)6 units

            B)9 units

            C)8 units

            D)7 units

            E)none of the above

7)Mark Achin sells 3,600 electric motors each year. The cost of these is $200 each, and demand is

constant throughout the year. The cost of placing an order is $40, while the holding cost is $20 per

unit per year. There are 360 working days per year and the lead-time is 5 days. If Mark orders 200

units each time he places an order, what would his average inventory be (in units)? 

            A)100

            B)120

            C)200

            D)60

            E)none of the above

8)Judith Thompson, the manager of the student center cafeteria, has added pizza to the menu. The

pizza is ordered frozen from a local pizza establishment and baked at the cafeteria. Judith

anticipates a weekly demand of 10 pizzas. The cafeteria is open 45 weeks a year, 5 days a week.

The ordering cost if $15 and the holding cost is $0.40 per pizza per year. The pizza vendor has a

4-day lead-time and Judith wants to maintain 1 pizza for safety stock. What is the optimal reorder

point?

            A)9

            B)10

            C)4

            D)8

E)none of the above

TRUE/FALSE.  Write 'T' if the statement is true and 'F' if the statement is false.

9)We can usually determine an appropriate safety stock even if we are unable to accurately assess the

actual cost of a stockout.

10)Economic order quantity (EOQ) analysis has recently become practical as a consequence of

high-speed computers.

11) Consider the following linear programming problem:

Maximize 5X + 6Y

Subject to: 4X + 2Y 􀁋 420

1X + 2Y 􀁋 120

all variables 􀁌 0

Which of the following points (X,Y) is in the feasible region?

A) (105,5)

B) (100,10)

C) (30,60)

D) (0,210)

E) none of the above

12) The condition when there is no solution that satisfies all the constraints is called

A) dependency.

B) redundancy.

C) boundedness.

D) optimality.

E) none of the above

13) If the addition of a constraint to a linear programming problem does not change the solution, the

constraint is said to be

A) unbounded.

B) bounded.

C) redundant.

D) non-negative.

E) infeasible.

14) Consider the following linear programming problem:

Maximize 10X + 30Y

Subject to X + 2Y 􀁋 80

8X + 16Y 􀁋 640

4X + 2Y 􀁌 100

X, Y 􀁌 0

This is a special case of a linear programming problem in which

A) there is a redundant constraint.

B) there are multiple optimal solutions.

C) there is no feasible solution.

D) this cannot be solved graphically.

E) none of the above

15) Which of the following is not acceptable as a constraint in a linear programming problem

(maximization)?

Constraint 1 X + XY + Y 􀁌 12

Constraint 2 X - 2Y 􀁋 20

Constraint 3 X + 3Y = 48

Constraint 4 X + Y + Z 􀁋 150

A) Constraint 1

B) Constraint 2

C) Constraint 3

D) Constraint 4

E) none of the above

16) Consider the following linear programming problem:

Maximize 12X + 10Y

Subject to: 2X + 3Y 􀁋 480

4X + 3Y 􀁋 360

all variables 􀁌 0

The maximum possible value for the objective function is

A) 1560.

B) 360.

C) 480.

D) 1520.

E) none of the above

17) Sensitivity analyses are used to examine the effects of changes in

A) technological coefficients.

B) contribution rates for each variable.

C) available resources.

D) all of the above

E) none of the above

18) Infeasibility in a linear programming problem occurs when

A) there is an infinite solution.

B) more than one solution is optimal.

C) the feasible region is unbounded.

D) a constraint is redundant.

E) there is no solution that satisfies all the constraints given.

19) Which of the following is not acceptable as a constraint in a linear programming problem

(minimization)?

Constraint 1 X + Y 􀁌 12

Constraint 2 X - 2Y 􀁋 20

Constraint 3 X + 3Y = 48

Constraint 4 X + Y + Z 􀁋 150

Constraint 5 2X - 3Y + Z > 75

A) Constraint 1

B) Constraint 2

C) Constraint 3

D) Constraint 4

E) Constraint 5

20) When appropriate, the optimal solution to a maximization linear programming problem can be

found by graphing the feasible region and

A) moving the isoprofit lines towards the origin in a parallel fashion until the last point in the

feasible region is encountered.

B) locating the point that is highest on the graph.

C) finding the profit at every corner point of the feasible region to see which one gives the

highest value.

D) none of the above

E) all of the above

21) Which of the following is not one of the steps in formulating a linear program?

A) Graph the constraints to determine the feasible region.

B) Use the decision variables to write mathematical expressions for the objective function and

the constraints.

C) Define the decision variables.

D) Identify the objective and the constraints.

E) Completely understand the managerial problem being faced.

22) Which of the following functions is not linear?

A) 2X - 5Y + 2Z

B) 2X + 5YZ

C) 3X + 4Y + Z - 3

D) Z

E) 5X + 3Z

23) Two models of a product - Regular (X) and Deluxe (Y) - are produced by a company. A linear

programming model is used to determine the production schedule. The formulation is as follows:

Maximize profit = 50X + 60Y

Subject to: 8X + 10Y 􀁋 800 (labor hours)

X + Y 􀁋 120 (total units demanded)

4X +10Y 􀁋 500 (raw materials)

X, Y 􀁌 0

The optimal solution is X=100, Y=0.

Which of these constraints is redundant?

A) the second constraint

B) the first constraint

C) the third constraint

D) all of the above

E) none of the above

24) Typical resources of an organization include ________.

A) warehouse space utilization

B) labor volume

C) machinery usage

D) raw material usage

E) all of the above

25) In a minimization problem, when one or more of the solution variables and the cost can be made

infinitely large without violating any constraints, then the linear program has

A) alternate optimal solutions.

B) an infeasible solution.

C) a redundant constraint.

D) an unbounded solution.

E) none of the above

TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.

26) The addition of a redundant constraint lowers the isoprofit line.

27) Resource restrictions are called constraints.

28) Resource mix problems use LP to decide how much of each product to make, given a series of

resource restrictions.

29) Management resources that need control include machinery usage, labor volume, money spent,

time used, warehouse space used, and material usage.

30) When two or more constraints conflict with one another, we have a condition called

unboundedness.