Operations Management Practice Exam
Course Introduction
Operations Management focuses on the design, execution, and improvement of the processes that produce and deliver goods and services. The course explores core concepts such as process analysis, capacity planning, supply chain management, quality control, inventory systems, and project management. Students will learn to apply analytical tools and techniques to optimize efficiency, reduce costs, and enhance value in various operational settings. Through case studies and practical examples, the course highlights the strategic impact of operations management in achieving organizational goals and maintaining competitive advantage in dynamic business environments.
Recommended Textbook
Quantitative Methods for Business 12th Edition by David R. Anderson
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17 Chapters
1066 Verified Questions
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Page 2
Chapter 1: Introduction
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Sample Questions
Q1) Identification and definition of a problem
A)cannot be done until alternatives are proposed.
B)is the first step of decision making.
C)is the final step of problem solving.
D)requires consideration of multiple criteria.
Answer: B
Q2) The terms 'stochastic' and 'deterministic' have the same meaning in quantitative analysis.
A)True
B)False
Answer: False
Q3) A small firm builds television antennas.The investment in plan and equipment is $200,000.The variable cost per television antenna is $500.The price of the television antenna is $1000.How many television antennas would be needed for the firm to break even?
Answer: 400 television antennae
Q4) The process of decision making is more limited than that of problem solving.
A)True
B)False
Answer: True
Page 3
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Chapter 2: Introduction to Probability
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Sample Questions
Q1) If P(A \(\cap\) B)= 0
A)A and B are independent events.
B)P(A) + P(B) = 1
C)A and B are mutually exclusive events.
D)either P(A) = 0 or P(B) = 0.
Answer: C
Q2) The intersection of A and A<sup>c</sup> is the entire sample space.
A)True
B)False
Answer: False
Q3) When the conclusions based upon the aggregated crosstabulation can be completely reversed if we look at the unaggregated data,the occurrence is known as A)reverse correlation
B)inferential statistics
C)Simpson's paradox
D)disaggregation
Answer: C
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4
Chapter 3: Probability Distributions
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Sample Questions
Q1) Suppose that the arrival time for the next bus at a bus stop is uniformly distributed between 1 and 25 minutes.The probability that the bus will arrive within the next 5 minutes is 1/6.
A)True
B)False
Answer: True
Q2) For a binomial distribution,compare P(x = 3)when n = 10 and p = .4 to P(x = 7)when n = 10 and p = .6.
Answer: P(x = 3 | n = 10,p = .4)= \(\frac { 10 ! } { 3 ! 7 ! }\)
(.4)<sup>3</sup>(.6)<sup>7</sup> = .215
P(x = 7 | n = 10,p = .6)= \(\frac { 10 ! } { 7 ! 3 ! }\) (.6)<sup>7</sup>(.4)<sup>3</sup> = .215
Q3) A random variable that may assume only a finite or an infinite sequence (e.g.,1,2,3,...)of values is a discrete random variable.
A)True
B)False
Answer: True
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Chapter 4: Decision Analysis
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Sample Questions
Q1) Sample information with an efficiency rating of 100% is perfect information.
A)True
B)False
Q2) Circular nodes in a decision tree indicate that it would be incorrect to choose a path from the node.
A)True
B)False
Q3) Use a diagram to compare EVwPI,EVwoPI,EVPI,EVwSI,EVwoSI,and EVSI.
Q4) The expected value of sample information can never be less than the expected value of perfect information.
A)True
B)False
Q5) If P(high)= .3,P(low)= .7,P(favorable | high)= .9,and P(unfavorable | low)= .6,then P(favorable)=
A).10
B).27
C).30 D).55
Q6) How can a good decision maker "improve" luck?
Page 6
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Chapter 5: Utility and Game Theory
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Sample Questions
Q1) Super Cola is considering the introduction of a new 8 oz.root beer.The probability that the root beer will be a success is believed to equal .6.The payoff table is as follows:
\[\begin{array} { l | l c } & \text { Success } \left( s _ { 1 } \right) & \text { Failure } \left( s _ { 2 } \right) \\
\hline \text { Produce } & \$ 250,000 & - \$ 300,000 \\
\text { Do Not Produce } & - \$ 50,000 & - \$ 20,000 \end{array}\] Company management has determined the following utility values:
\[\begin{array} { l c c c c }
\text { Amount } & \$ 250,000 & - \$ 20,000 & - \$ 50,000 & - \$ 300,000 \\
\hline \text { Utility } & 100 & 60 & 55 & 0
\end{array}\]
a.Is the company a risk taker, risk averse, or risk neutral?
b.What is Super Cola's optimal decision?
Q2) A risk avoider will have a concave utility function.
A)True
B)False
Q3) When and why should a utility approach be followed?
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Page 7
Chapter 6: Times Series Analysis and Forecasting
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Sample Questions
Q1) The number of girls who attend a summer basketball camp has been recorded for the seven years the camp has been offered.Use exponential smoothing with a smoothing constant of .8 to forecast attendance for the eighth year. 47,68,65,92,98,121,146
Q2) If the random variability in a time series is great,a high F1F1F1S1 F1F1F10 value should be used to exponentially smooth out the fluctuations.
A)True
B)False
Q3) Time series methods base forecasts only on past values of the variables.
A)True
B)False
Q4) In situations where you need to compare forecasting methods for different time periods,the most appropriate accuracy measure is A)MSE
B)MAPE
C)MAE
D)ME
Q5) Explain what conditions make quantitative forecasting methods appropriate.
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Chapter 7: Introduction to Linear Programming
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Sample Questions
Q1) Find the complete optimal solution to this linear programming problem.
\[\begin{array} { l l }
\text { Max } & 5 x + 3 y \\
\\
\text { s.t. } & 2 x + 3 y \leq 30 \\
& 2 x + 5 y \leq 40 \\
& 6 x - 5 y \leq 0 \\
& x , y \geq 0
\end{array}\]
Q2) Find the complete optimal solution to this linear programming problem.
\[\begin{array} { l r }
\text { Min } \quad & 5 x + 6 y \\\
\\
\text { s.t. } & 3 x + y \geq 15 \\
& x + 2 y \geq 12 \\
&3 x + 2 y \geq 24 \\
& x , y \geq 0
\end{array}\]
Q3) Explain how to graph the line x<sub>1</sub> F1F1F1S1 F1F1F10 2x<sub>2</sub> F1F1F1S1 F1F1F10 0.
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Chapter 8: Linear Programming: Sensitivity Analysis and Interpretation of
Solution
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Sample Questions
Q1) How is sensitivity analysis used in linear programming? Given an example of what type of questions that can be answered.
Q2) In a linear programming problem,the binding constraints for the optimal solution are 5x + 3y F1F1F1S1 F1F1F10 30 2x + 5y F1F1F1S1 F1F1F10 20
a.Fill in the blanks in the following sentence:As long as the slope of the objective function stays between _______ and _______, the current optimal solution point will remain optimal.
b.Which of these objective functions will lead to the same optimal solution?1) 2x + 1y 2) 7x + 8y 3) 80x + 60y 4) 25x + 35y
Q3) The amount of a sunk cost will vary depending on the values of the decision variables.
A)True
B)False
Q4) Output from a computer package is precise and answers should never be rounded.
A)True
B)False
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Chapter 9: Linear Programming Applications in Marketing, Finance, and Operations Management
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Sample Questions
Q1) Modern revenue management systems maximize revenue potential for an organization by helping to manage
A)pricing strategies.
B)reservation policies.
C)short-term supply decisions.
D)All of the alternatives are correct.
Q2) The production scheduling problem modeled in the textbook involves capacity constraints on all of the following types of resources except
A)material
B)labor
C)machine
D)storage
Q3) Compared to the problems in the textbook,real-world problems generally require more variables and constraints.
A)True
B)False
Q4) Why should decision makers who are primarily concerned with marketing or finance or production know about linear programming?
Q5) Describe some common feature of multiperiod financial planning models.
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Chapter 10: Distribution and Network Models
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Sample Questions
Q1) We assume in the maximal flow problem that
A)the flow out of a node is equal to the flow into the node.
B)the source and sink nodes are at opposite ends of the network.
C)the number of arcs entering a node is equal to the number of arcs exiting the node.
D)None of the alternatives is correct.
Q2) The parts of a network that represent the origins are
A)the capacities
B)the flows
C)the nodes
D)the arcs
Q3) The shortest-route problem is a special case of the transshipment problem.
A)True
B)False
Q4) In a transshipment problem,shipments
A)cannot occur between two origin nodes.
B)cannot occur between an origin node and a destination node.
C)cannot occur between a transshipment node and a destination node.
D)can occur between any two nodes.
Q5) Is it a coincidence to obtain integer solutions to network problems? Explain.
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Chapter 11: Integer Linear Programming
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Sample Questions
Q1) Solve the following problem graphically. \[\begin{array} { l l }
\operatorname { Max } & x + 2 y \\ \text { s.t. } & 6 x + 8 y \leq 48 \\ & 7 x + 5 y \geq 35 \\ & x , y \geq 0 \text { and } y \text { is integer } \end{array}\]
a.Graph the constraints for this problem. Indicate all feasible solutions.
b.Find the optimal solution to the LP Relaxation. Round down to find a feasible integer solution. Is this solution optimal?
c.Find the optimal solution.
Q2) Which of the following applications modeled in the textbook does not involve only 0 - 1 integer variables?
A)supply chain design
B)bank location
C)capital budgeting
D)product design and market share optimization
Q3) The use of integer variables creates additional restrictions but provides additional flexibility.Explain.
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Page 13
Chapter 12: Advanced Optimization Applications
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Sample Questions
Q1) A linear programming application used to measure the relative efficiency of operating units with the same goals and objectives is
A)game theory.
B)asset allocation.
C)revenue management.
D)data envelopment analysis.
Q2) The interpretation of the dual price for nonlinear models is different than the interpretation of the dual price for linear models.
A)True
B)False
Q3) For a minimization problem,a point is a global minimum if there are no other feasible points with a smaller objective function value.
A)True
B)False
Q4) Which of the following is not true regarding a concave function?
A)It is bowl-shaped down.
B)It is relatively easy to maximize.
C)It has multiple local maxima.
D)It has a single global maximum.
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Chapter 13: Project Scheduling: Pertcpm
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Sample Questions
Q1) Explain how and why all successor activities must be considered when finding the latest finish time.
Q2) The length of time an activity can be delayed without affecting the project completion time is the slack.
A)True
B)False
Q3) Activities with zero slack
A)can be delayed.
B)must be completed first.
C)lie on a critical path.
D)have no predecessors.
Q4) It is possible to have more than one critical path at a time.
A)True
B)False
Q5) When activity times are uncertain,an activity's most likely time is the same as its expected time.
A)True B)False
Q6) Once the earliest and latest times are calculated,how is the critical path determined?
Page 15
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Chapter 14: Inventory Models
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Sample Questions
Q1) For the inventory model with planned shortages,the optimal order quantity results in
A)annual holding cost = annual ordering cost.
B)annual holding cost = annual backordering cost.
C)annual ordering cost = annual holding cost + annual backordering cost.
D)annual ordering cost = annual holding cost F1F1F1S1 F1F1F10 annual backordering cost.
Q2) At the optimal order quantity for the quantity discount model,the sum of the annual holding and ordering costs is minimized.
A)True
B)False
Q3) In the EOQ model,the average inventory per cycle over many cycles is Q/2.
A)True
B)False
Q4) Inventory
A)is held against uncertain usage so that a supply of items is available if needed.
B)constitutes a small part of the cost of doing business.
C)is not something that can be managed effectively.
D)All of the alternatives are correct.
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16
Chapter 15: Waiting Line Models
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Sample Questions
Q1) If service time follows an exponential probability distribution,approximately 63% of the service times are less than the mean service time.
A)True
B)False
Q2) In a waiting line situation,arrivals occur,on average,every 10 minutes,and 10 units can be received every hour.What are F1F1F1S1 F1F1F10 and F1F1F1S1 F1F1F10?
A)F1F1F1S1 F1F1F10 = 10, F1F1F1S1 F1F1F10 = 10
B)F1F1F1S1 F1F1F10 = 6, F1F1F1S1 F1F1F10 = 6
C)F1F1F1S1 F1F1F10 = 6, F1F1F1S1 F1F1F10 = 10
D)F1F1F1S1 F1F1F10 = 10, F1F1F1S1 F1F1F10 = 6
Q3) Waiting line models describe the transient-period operating characteristics of a waiting line.
A)True B)False
Q4) For a single-channel waiting line,the utilization factor is the probability that an arriving unit must wait for service.
A)True B)False
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Chapter 16: Simulation
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Sample Questions
Q1) The process of generating probabilistic inputs and computing the value of the output is called
A)simulation.
B)verification.
C)validation.
D)implementation.
Q2) The time required to set up lighting for a portrait studio is uniformly distributed between 12 and 20 minutes.Use the following random numbers to generate the setup time for 10 customers.
\[\begin{array} { l l l l l l l l l l }
.27 & .53 & .06 & .92 & .16 & .74 & .06 & .29 & .82 & .23
\end{array}\]
Q3) Simulation is an optimization technique.
A)True
B)False
Q4) A table of uniformly distributed random numbers should be read
A)from left to right.
B)from top to bottom.
C)diagonally, starting from the top left corner and moving to the bottom right.
D)in any consistent sequence.
Page 18
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Chapter 17: Markov Processes
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Sample Questions
Q1) A transition probability describes
A)the probability of a success in repeated, independent trials.
B)the probability a system in a particular state now will be in a specific state next period.
C)the probability of reaching an absorbing state.
D)None of the alternatives is correct.
Q2) A unique matrix of transition probabilities should be developed for each customer.
A)True
B)False
Q3) A Markov chain cannot consist of all absorbing states.
A)True
B)False
Q4) Markov processes use historical probabilities.
A)True
B)False
Q5) If a Markov chain has at least one absorbing state,steady-state probabilities cannot be calculated.
A)True B)False
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