Introduction to Operations Management Final Test Solutions - 3391 Verified Questions

Page 1


Introduction to Operations Management

Final Test Solutions

Course Introduction

Introduction to Operations Management offers an in-depth exploration of how organizations produce goods and deliver services efficiently. The course covers fundamental concepts and tools used to design, analyze, and improve operational processes, with topics including process analysis, capacity planning, inventory management, quality control, supply chain management, and project management. Through case studies and real-world examples, students learn to identify operational challenges and apply quantitative and qualitative methods to enhance productivity, reduce costs, and achieve strategic goals within various business environments.

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Principles of Operations Management Sustainability and Supply Chain Management 10th Edition

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26 Chapters

3391 Verified Questions

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Page 2

Chapter 1: Operations and Productivity

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Sample Questions

Q1) An operations manager is <b>not</b> likely to be involved in

A) the design of goods and services to satisfy customers' wants and needs

B) the quality of goods and services to satisfy customers' wants and needs

C) the identification of customers' wants and needs

D) work scheduling to meet the due dates promised to customers

E) maintenance schedules

Answer: C

Q2) The factor responsible for the largest portion of productivity increase in the U.S. is A) labor

B) management

C) capital

D) All three combined; it is impossible to determine the contribution of individual factors.

E) None of these

Answer: B

Q3) Operations managers should be well versed in what disciplines in order to make good decisions?

Answer: Management science, information technology, and often one of the biological or physical sciences.

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Chapter 2: Operations Strategy in a Global Environment

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Sample Questions

Q1) Caterpillar and Texas Instruments are two firms that have benefited from the use of

A) the multidomestic strategy option.

B) the multinational corporation strategy.

C) the transnational strategy option.

D) the maquiladora system in Europe.

E) the global strategy option.

Answer: E

Q2) Which of the following is <b>not</b> an operations strategic decision?

A) maintenance

B) price

C) layout design

D) quality

E) inventory

Answer: B

Q3) Service organizations can immerse the consumer in the service, or have the consumer become a participant in the service, as they practice __________.

Answer: experience differentiation

Q4) Identify five countries from which Boeing's 787 Dreamliner has suppliers.

Answer: France, Germany, UK, Italy, Japan, China, South Korea, Sweden, U.S.

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Chapter 3: Project Management

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Sample Questions

Q1) Which of the following is not one of the three phases of project management?

A) planning

B) scheduling

C) controlling

D) All of the above are project management phases.

E) Both A and C are not project management phases.

Answer: D

Q2) What are the advantages of using PERT and CPM?

Answer: The advantages include its usefulness for scheduling and controlling large projects, its straightforward concept, its graphical displays of relationships between activities, its critical path and slack time analysis, its ability to document processes, its wide range of applicability, and its usefulness in monitoring schedules and costs.

Q3) Describe the differences between a Gantt chart and a PERT/CPM network.

Answer: The differences between a Gantt chart and a PERT/CPM network are mainly that PERT/CPM has the ability to consider precedence relationships and interdependence of activities.

Q4) __________ divides a project into more and more detailed components.

Answer: Work breakdown structure or WBS

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Page 5

Chapter 4: Forecasting

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Sample Questions

Q1) An approach to exponential smoothing in which the smoothing constant is automatically changed to keep errors to a minimum is called __________.

Q2) When one constant is used to smooth the forecast average and a second constant is used to smooth the trend, the forecasting method is __________.

Q3) Identify the seven steps involved in forecasting.

Q4) The primary purpose of the mean absolute deviation (MAD) in forecasting is to

A) estimate the trend line

B) eliminate forecast errors

C) measure forecast accuracy

D) seasonally adjust the forecast

E) all of the above

Q5) Distinguish a dependent variable from an independent variable.

Q6) Explain, in your own words, the meaning of the coefficient of determination.

Q7) Focus forecasting tries a variety of computer models and selects the best one for a particular application.

A)True

B)False

Q8) Distinguish between a moving average model and an exponential smoothing model.

Q9) What is a time-series forecasting model? Page 6

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Page 7

Chapter 5: Design of Goods and Services

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Sample Questions

Q1) Which of the following is <b>true </b>regarding computer-aided design?

A) It is too expensive to use in most manufacturing and design settings.

B) It is an old technology

C) It results in longer development cycles for virtually all products.

D) It is the use of computers to interactively design products and prepare engineering documentation.

E) All of the above are true.

Q2) To view product design from a "systems" perspective, managers must view a product in terms of its impact on __________.

Q3) The use of information technology to control machinery is called __________.

Q4) Which of the following scenarios illustrates a moment that <b>exceeds </b>the customer's expectations?

A) an express mail service that guarantees overnight delivery

B) a flight attendant that responds shortly after being called

C) a hairdresser that cuts your hair at the right length

D) a professor that contacts people in several companies to find you a job

E) a bank that sends you monthly account statements

Q5) Provide some examples of recent product changes, i.e. new products that are replacing older ones.

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Chapter 6: Managing Quality

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Sample Questions

Q1) A Six Sigma program has how many defects per million?

A) 3.4

B) 34

C) 1000

D) 6 times the standard deviation

E) none of the above

Q2) What steps can be taken to develop benchmarks?

Q3) Which of the following is not one of the major categories of costs associated with quality?

A) prevention costs

B) appraisal costs

C) internal failures

D) external failures

E) None of the above; they are all major categories of costs associated with quality.

Q4) Source inspection is inferior to inspection before costly operations.

A)True

B)False

Q5) __________ selects a demonstrated standard of performance that represents the very best performance for a process or activity.

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Chapter 7: Statistical Process Control

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Sample Questions

Q1) Which of the following is true regarding the process capability index Cpk?

A) A Cpk index value of 1 is ideal, meaning all units meet specifications.

B) The larger the Cpk, the more units meet specifications.

C) The Cpk index can only be used when the process centerline is also the specification centerline.

D) Positive values of the Cpk index are good; negative values are bad.

E) None of the above is true.

Q2) When a lot has been accepted by acceptance sampling, we know that

A) it has more defects than existed before the sampling

B) it has had all its defects removed by 100% inspection

C) it will have the same defect percentage as the LTPD

D) it has no defects present

E) All of the above are False.

Q3) Which of the following is true of a p-chart?

A) The lower control limit is found by subtracting a fraction from the average number of defects.

B) The lower control limit indicates the minimum acceptable number of defects.

C) The lower control limit equals D times p-bar.

D) The lower control limit may be at zero.

E) The lower control limit is the same as the lot tolerance percent defective.

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Chapter 8: Process Strategy

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Sample Questions

Q1) A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable cost is $50 per unit. The firm is considering a fundamental shift in process, to repetitive manufacture. The new process would have fixed costs of $90,000, and variable costs of $5. What is the crossover point for these processes? For what range of outputs is each process appropriate?

Q2) Which of the following companies use a mass customization approach?

A) Dell

B) Align Technology

C) Frito-Lay

D) Arnold Palmer hospital

E) A and B

Q3) Which of the following products is likely to be assembled on a repetitive process line?

A) automobiles

B) personal computers

C) dishwashers

D) television sets

E) all of the above

Q4) Describe Value-Stream Mapping. Explain how it is different from process mapping.

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Chapter9: Capacity and Constraint Management

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Sample Questions

Q1) The staff training center at a large regional hospital provides training sessions in CPR to all employees. Assume that the capacity of this training system was designed to be 1200 employees per year. Since the training center was first put in use, the program has become more complex, so that 1050 now represents the most employees that can be trained per year. In the past year, 950 employees were trained. The efficiency of this system is approximately __________ and its utilization is approximately

A) 79.2 percent; 90.5 percent

B) 90.5 percent; 79.2 percent

C) 87.5 percent; 950 employees

D) 950 employees; 1050 employees

E) 110.5 percent; 114.3 percent

Q2) Design capacity is the theoretical maximum output of a system in a given period under ideal conditions.

A)True

B)False

Q3) __________ is actual output as a percent of design capacity.

Q4) Explain the importance of a bottleneck operation in a production sequence.

Q5) Describe the theory of constraints in a sentence.

Q6) In "drum, buffer, rope," the __________ acts like kanban signals.

Page 12

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Chapter 10: Location Strategies

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Sample Questions

Q1) LaQuinta Motor Inns has a competitive edge over its rivals because it

A) uses regression analysis to determine which variables most influence profitability

B) picks better locations than its rivals

C) picks larger locations than its rivals

D) builds only along interstate highways

E) all of the above

Q2) Which of the following is usually not one of the top considerations in choosing a country for a facility location?

A) availability of labor and labor productivity

B) exchange rates

C) attitude of governmental units

D) zoning regulations

E) location of markets

Q3) The ratio of labor cost per day to productivity, in units per day, is the labor cost per unit.

A)True

B)False

Q4) What is it called when competing companies locate next to each other? Why do they do this?

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Chapter 11: Layout Strategies

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Sample Questions

Q1) Slotting fees

A) are charged by retailers to stock a product

B) can amount to as much as $25,000

C) are not a part of Wal-Mart's business practices

D) can reduce the ability of small businesses to introduce new products

E) all of the above

Q2) What is the primary reason why retailers tend to locate high-draw items around the periphery of the store?

A) More shelf space for those popular items is available around the periphery.

B) There will be less congestion of customers than there would be in the middle.

C) This arrangement will help to maximize customer exposure to other items in the store.

D) It is easier to put large advertisement signs on the outside walls right next to the items.

E) This arrangement allows customers to travel through the store as quickly as possible.

Q3) A process-oriented layout is the traditional way to support a product differentiation strategy.

A)True

B)False

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14

Chapter 12: Human Resources, Job Design, and Work Measurement

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Sample Questions

Q1) __________ is the grouping of a variety of tasks using the same approximate skill level.

Q2) Activity charts help analyze

A) movement of people and materials

B) utilization of an operator and machine

C) body movements

D) activities that can cause injuries

E) unnecessary micro-motions

Q3) Which of the following is not an analytical target of methods analysis?

A) movement of capital

B) body movement

C) movement of individuals

D) movement of materials

E) crew activity

Q4) Labor standards were pioneered by Frank and Lillian Gilbreth and

A) Frederick Taylor

B) Eli Whitney

C) Henry Ford

D) Alan Smith

E) GE

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Chapter 13: Supply-Chain Management

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Sample Questions

Q1) With the growth of JIT, which of the following distribution systems has been the biggest loser?

A) trucking

B) railroads

C) airfreight

D) waterways

E) pipelines

Q2) Outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers.

A)True

B)False

Q3) A manufacturing plant had $.74 of raw materials, $.23 of in-progress inventory, and $1.03 of finished goods inventory at month's end. If monthly sales were $10, what is the turnover?

(assume all units are in thousands, i.e. $1 is actually $1000)

Q4) What are the three versions of online catalogs?

Q5) What is a keiretsu?

Q6) __________ is a Japanese term to describe suppliers who become part of a company coalition.

Page 16

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Chapter 14: Outsourcing as a Supply-Chain Strategy

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Sample Questions

Q1) Advantages of outsourcing do not include

A) cost savings

B) outside expertise

C) renewed focus on core competencies

D) gaining outside technologies

E) creating future competition

Q2) Has there been any political backlash in the United States resulting from outsourcing in foreign countries?

Explain.

Q3) The practice of choosing an external provider in the home country or in a nearby country is referred to as

A) homeshoring

B) homesourcing

C) nearshoring

D) nearsourcing

E) backsourcing

Q4) Outsourcing is an extension of the long-standing practice of __________ production activities.

Q5) Identify five main advantages of outsourcing.

Q6) Identify three factors fueling the continuing growth of outsourcing.

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Chapter 15: Inventory Management

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Sample Questions

Q1) Service level is

A) the chance of stocking out

B) the chance of not stocking out

C) something that should be minimized in retail

D) calculated as the cost of a shortage divided by (the cost of overage + the cost of shortage) for single- period models

E) B and D

Q2) A product has variable demand and constant lead time. Currently this product is managed by a fixed-period inventory system, for which the review period is one week.

Lead time is four weeks. Annually about 5,200 units of this product are sold. The current target inventory is 500 units. Today is review day; 75 units are on the shelves, and orders placed at previous reviews in the amount of 110, 60, and 30 have not yet been received. There are no backorders.

a. How much is the firm allowing for safety stock in this case?

b. What should be the order amount this week?

Q3) In an economic order quantity problem, the total annual cost curve is at its __________ where holding costs equal setup costs.

Q4) __________ is a continuing reconciliation of inventory with inventory records.

Q5) Define service level.

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Chapter 16: Aggregate Planning

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Sample Questions

Q1) How does "yield management" impact the aggregate plan?

Q2) The objective of aggregate planning is to meet demand while __________ over the planning period.

A) minimizing cost

B) maximizing service level

C) minimizing stock out

D) minimizing fixed cost

E) all of the above

Q3) Which of the following uses regression to incorporate historical managerial performance into aggregate planning?

A) transportation method

B) simulation

C) linear decision rule

D) management coefficients model

E) keiretsu

Q4) __________ is a complex aggregate planning technique, using models that may be difficult to build and for managers to understand.

Q5) __________ is an approach to determine the quantity and timing of production for the intermediate future.

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Chapter 17: Material Requirements Planning MRP and ERP

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Sample Questions

Q1) The phrase "demand related to the demand for other products" describes A) a dependent variable

B) dependent demand

C) recursive demand

D) regression analysis

E) independent demand

Q2) A(n) __________ can illustrate whether a work center has been scheduled beyond its capacity.

Q3) Each X requires 2 of component Y; each Y requires 4 of part Z. The lead time for assembly of X is 1 week. The lead time for the manufacture of Y is 1 week. The lead time for the procurement of Z is 6 weeks. The cumulative lead time for X is __________ weeks.

A) 6

B) 7

C) 8

D) 10

E) cannot be determined

Q4) The __________ is used to correct an erroneous dimension, quantity, or other specification in a bill of material.

Q5) What does enterprise resource planning (ERP) allow an organization to do?

Page 20

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Chapter 18: Short-Term Scheduling

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Sample Questions

Q1) Find the sequence for the priority rules of

a. FCFS

b. SPT

c. EDD

d. LPT

Given the table below and the fact that today is the 1 \[\begin{array} { | l | l | l | }

\hline \text { Job } & \text { Process Time } & \text { Due Date } \\

\hline \text { A } & 6 & 10 \\

\hline \text { B } & 4 & 2 \\

\hline \text { C } & 8 & 5 \\

\hline \text { D } & 9 & 16 \\

\hline

\end{array}\]

Q2) There are 5 jobs (A, B, C, D,E) that need to be completed in a work center. The due dates are the 10 , 13 , 8 , 20 , and 15 respectively with process times of 7, 12, 7, 20, and respectively as well. If today is the 1 of the month calculate the critical ratio for each and use this value to sequence the jobs in the order they should be started.

Q3) What are the criteria by which we evaluate sequencing rules?

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Chapter 19: Just-In-Time and Lean Options

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Sample Questions

Q1) Lean operations are known for their A) employee development

B) supplier education

C) supplier partnerships

D) challenging jobs

E) All of the above are attributes of lean operations.

Q2) Customer demand will always remain an unknown, so it is not considered a source of variation.

A)True

B)False

Q3) What is the time required to move orders through the production process, from receipt to delivery?

A) throughput

B) manufacturing cycle time

C) pull time

D) push time

E) queuing time

Q4) Define manufacturing cycle time in the context of JIT systems.

Q5) Daily demand is half of daily production. If setup and holding costs are equal, determine how Q and D are related.

22

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Chapter 20: Maintenance and Reliability

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Sample Questions

Q1) A two-component process has an 81% success rate in series and a 99% success rate in parallel. If each component has the same reliability, what is the reliability of an individual component?

A) 50%

B) 90%

C) 99%

D) none of the above

E) unable to determine

Q2) The inverse of the mean time between failures is the __________.

Q3) The "full cost view of maintenance" results in more firms choosing a policy of breakdown maintenance, when compared to the "traditional view of maintenance."

A)True

B)False

Q4) When identifying the optimal maintenance policy, the cost of inventory maintained to compensate for the downtime is a cost often ignored.

A)True

B)False

Q5) How do many electronic firms deal with infant mortality in their products?

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Chapter 21: Decision-Making Tools

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Sample Questions

Q1) In a decision tree, the expected monetary values are computed by working from right to left.

A)True

B)False

Q2) The expected value of perfect information is the same as the expected value with perfect information.

A)True

B)False

Q3) The difference between the expected payoff under perfect information and the maximum expected payoff under risk is

A) expected monetary value

B) economic order quantity

C) expected value of perfect information

D) PERT

E) expected monetary payoff

Q4) Analytic decision making is based on logic and considers all available data and possible alternatives.

A)True

B)False

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Chapter 22: Linear Programming

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Sample Questions

Q1) What is the simplex method?

Q2) What combination of x and y will yield the optimum for this problem?

Minimize $3x + $15y, subject to (1) 2x + 4y < 12 and (2) 5x + 2y < 10 and (3) x, y 0.

A) x = 2, y = 0

B) x = 0, y = 3

C) x = 0, y = 0

D) x = 1, y = 5

E) none of the above

Q3) One requirement of a linear programming problem is that the objective function must be expressed as a linear equation.

A)True

B)False

Q4) In terms of linear programming, the fact that the solution is infeasible implies that the "profit" can increase without limit.

A)True

B)False

Q5) Two methods of solving linear programming problems by hand include the corner-point method and the__________.

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Chapter 23: Transportation Models

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Sample Questions

Q1) A transportation problem has 10 origins and 32 destinations. How many possible routes are there for this problem?

How many routes will be used in the optimal solution?

Q2) What is transportation modeling?

Q3) Which of the following is <b>not </b>needed in order to use the transportation model?

A) the source points and their capacity

B) the fixed costs of source points

C) the destination points and their demand

D) the cost of shipping one unit from each source to each destination

E) All of these are needed.

Q4) The purpose of the transportation approach for location analysis is to minimize

A) total costs

B) total variable costs

C) total fixed costs

D) total shipping costs

E) the number of shipments

Q5) A transportation problem that has more units supplied than demanded will require a(n) __________ to balance the problem.

Page 26

Q6) What purpose does the northwest-corner rule serve?

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Chapter 24: Waiting-Line Models

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Q1) What are the components in a waiting-line system?

Q2) A university has only one technician in the repair station to care for the computers in the student labs. This system is most likely

A) a single channel, limited queue system

B) a single channel, limited population system

C) a multi-channel, limited queue system

D) a multi-channel, limited population system

E) none of the above

Q3) Balk and renege are elements of queue discipline.

A)True

B)False

Q4) As the average service rate grows larger, the slope of the distribution of service time probabilities grows larger and larger, eventually becoming positive.

A)True

B)False

Q5) What does it mean to have a patient customer in a waiting line?

Q6) A waiting line meeting the M/M/1 assumptions has an arrival rate of 10 per hour and a service rate of 12 per hour. What is the probability that the waiting line is empty?

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Chapter 25: Learning Curves

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Sample Questions

Q1) Your firm has expertise with a special type of hand-finished furniture. The learning rate is known to be 82%. If the first piece of furniture took 6 hours, how long will it take to do the second?

How long will it take to do the fourth?

Q2) A contractor builds large ships for the Department of Defense. A recent contract called for 12 amphibious landing platforms. It was originally estimated that the first of these would cost $1 billion and that 80 percent learning would be appropriate. In fact, the first ship cost $1.6 billion and the second $1.12 billion. What is the revised learning rate? What will be the total cost of the twelve ships? Is it higher or lower than the original estimates? If the defense department cuts the contract from 12 ships to 9, what happens to the average cost per ship?

Q3) In the logarithmic approach formula to compute the time for the Nth unit, TN = T N , the exponent b is the learning curve rate L, expressed as a decimal.

A)True

B)False

Q4) Why do different organizations have different learning curves?

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Chapter 26: Simulation

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Sample Questions

Q1) What is the cumulative probability distribution of the following variable?

\(\begin{array}{|l|l|}

\hline\text { Tires Sold } & \text { Probability } \\

\hline 0 & 1 \\

\hline 1 & 2 \\

\hline 2 & 15 \\

\hline 3 & 3 \\

\hline 4 & 25 \\

\hline

\end{array}\)

A) 1

B) .5

C) 10

D) .2

E) none of the above

Q2) Like mathematical and analytical models, simulation is restricted to using the standard probability distributions.

A)True

B)False

Q3) Identify the seven steps involved in using simulation.

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