Production and Operations Management Practice Exam
Course Introduction
Production and Operations Management explores the principles and techniques involved in the efficient production of goods and services. The course covers key topics such as process analysis, quality management, inventory control, capacity planning, supply chain management, and project management. Students will learn to evaluate and improve operational systems by applying quantitative and qualitative methods to optimize resources, enhance productivity, and achieve organizational objectives. Case studies and real-world examples provide practical insights into solving contemporary operational challenges faced by businesses in manufacturing and service industries.
Recommended Textbook
Practical Management Science 5th Edition by Wayne L. Winston
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14 Chapters
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Page 2
Chapter 1: Introduction to Modeling
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Q1) Which of the following is not one of the reasons for the new-found relevance of management science models?
A)Modeling is an important way to think about problems in general
B)Modeling is often now a legal requirement
C)The business world is increasingly driven by numbers
D)Modeling helps develop intuition for problems
Answer: B
Q2) A first step in determining how well a model fits reality is to:
A)check whether the inputs are correct
B)see if the sensitivity analysis is correct
C)check whether the model is valid for the current situation
D)try some what-if scenarios to see if the model is able to obtain solutions
Answer: C
Q3) In modeling situations where it is not possible to write an equation for an output in terms of the inputs, there may still be a mathematical procedure for calculating outputs from inputs.
A)True
B)False
Answer: True
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Chapter 2: Introduction to Spreadsheet Modeling
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Sample Questions
Q1) Refer to Exhibit 2-1. Suppose now that blank t-shirts can only be ordered from the wholesale vendor in batches of 50? How many t-shirts should the company order?
Answer: We can again set up a one-way data table with net profit as the output and order as the input (with trial quantities of 600, 650, 700, 750, and 800), which shows that the net profit is maximized at $5000 with an order of 750 shirts.
Q2) Refer to Exhibit 2-2. Suppose instead that the company thinks it can reduce its variable cost rate. What rate would produce an NPV of $10,000?
Answer: Using Excel's Goal Seek function, the required variable cost rate would be $10.02 per unit of production.
Q3) Which of the following is not one of the features that can improve the readability of a spreadsheet model?
A)Formatting features
B)Data tables
C)Cell comments
D)Text Boxes
Answer: B
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Chapter 3: Introduction to Optimization Modeling
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Q1) If the objective function has the equation {4x + 2y}, then the slope of the objective function line is 2.
A)True
B)False
Answer: True
Q2) Suppose the allowable increase and decrease for an objective coefficient of a decision variable that has a current value of $50 are $25 (increase) and $10 (decrease). If the coefficient were to change from $50 to $65, the optimal value of the objective function would not change.
A)True
B)False
Answer: False
Q3) [Part 1] Refer to Exhibit 3-2. Find an optimal solution to Western's problem. What is the production plan, and what is the total revenue?
Answer: SS = pounds of steel sheeting produced and sold = 1000
AS = pounds of aluminum sheeting produced and sold = 2000
SC = number of Standard chassis racks produced and sold = 800
DC = number of Deluxe chassis racks produced and sold = 1000
Profit = $26,200
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Page 5
Chapter 4: Linear Programming Models
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Sample Questions
Q1) In aggregate planning models, which of the following statements are correct?
A)The number of workers available influences the possible production levels
B)We allow the workforce level to be modified each month through the hiring and firing of workers
C)We eventually allow demand to be backlogged; that is, demand need not be met on time
D)All of these options
Q2) Refer to Exhibit 4-4. Assuming that all fertilizer produced can be sold, determine the optimal blending plan for the company. What is the maximum profit?
Q3) In blending problems, if a quality constraint involves a quotient, then the problem will be nonlinear.
A)True
B)False
Q4) Workforce scheduling problems in which the worker schedules continue week to week are:
A)continuous problems
B)transition problems
C)integrated problems
D)wraparound problems
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Chapter 5: Network Models
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Q1) In a typical network model representation of the transportation problem, the nodes indicate
A)roads
B)rail lines
C)geographic locations
D)rivers
Q2) The graphical representation of a network in an optimization problem can be an aid in the development of a spreadsheet model.
A)True
B)False
Q3) The network model representation of the transportation problem has the following advantage relative to the special case of a simple transportation model:
A)it does not require capacity restrictions on the arcs of the network
B)the flows in the network model don't all necessarily have to be from supply locations to demand locations
C)a network model representation is generally easier to formulate and solve
D)All of these options
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Chapter 6: Optimization Models With Integer Variables
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Q1) Fixed costs imply that the divisibility assumption of linear models no longer holds.
A)True
B)False
Q2) Refer to Exhibit 6-3. Suppose PharmaCo wants to have a backup for each city. What is the minimum number of representatives that can cover this region in that case? What are their home cities?
Q3) Many inherently nonlinear problems can be transformed into linear models with the use of:
A)integer variables
B)integer constraints
C)binary variables
D)binary constraints
Q4) Complete enumeration of all possible solutions in many integer programming problems is impractical.
A)True
B)False
Q5) Refer to Exhibit 6-2. What is Sinclair's optimal shipping plan? What is the total cost in that case?
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Chapter 7: Nonlinear Optimization Models
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Q1) If a convex function is multiplied by a negative constant, the result:
A)is convex
B)is concave
C)could be either convex or concave, depending on the value of the constant
D)is linear
Q2) Refer to Exhibit 7-1. How many units of each product should the company produce? What prices should it charge, to maximize profit?
Q3) Refer to Exhibit 7-4. Suppose you set the weights in the portfolio to a maximum of 0.45 for each stock. Is it possible to achieve a 12% return? What is the portfolio standard deviation in that case?
Q4) In pricing models, elasticity of demand is an input with specifies the:
A)range of demand
B)level of demand
C)sensitivity of price to changes in demand
D)sensitivity of demand to changes in price
Q5) In pricing models, two products are substitutes for each other if a larger price for one product tends to induce customers to demand less of the other.
A)True
B)False
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Chapter 8: Evolutionary Solver: An Alternative Optimization
Procedure
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Q1) The Evolutionary Solver setting that helps the algorithm explore a completely different area of the feasible region is:
A)convergence
B)mutation rate
C)population size
D)random seed
Q2) Refer to Exhibit 8-2. Explain why this problem typically requires Evolutionary Solver to obtain a solution.
Q3) Which of the following is true regarding Evolutionary Solver?
A)It is efficient at handling constraints
B)A good starting is critical to the success of it finding a solution
C)It places more of a burden on you to specify certain parameters of the algorithm
D)Running it a second time for a problem should yield the same solution
Q4) Refer to Exhibit 8-1. This is an example of what type of optimization problem?
Q5) The number of possible paths in a shortest path problem with n locations is:
A)n
B)n 1
C)n2
D)n!
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Chapter 9: Decision Making Under Uncertainty
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Q1) Refer to Exhibit 9-2. Should the credit union purchase the report if it costs $150?
Q2) The expected value of perfect information (EVPI) is a largely irrelevant concept since perfect information is almost never available at any price.
A)True
B)False
Q3) Refer to Exhibit 9-1. Find the highest cost of insulating the grapefruits for which the farmer prefers to insulate his crop.
Q4) The expected monetary value (EMV) criterion represents the long-run average of uncertain outcomes, so it should only be used for recurring decisions.
A)True
B)False
Q5) Refer to Exhibit 9-1. Suppose the farmer is uncertain about the reliability of the National Weather Service forecast. If he thinks the probability of a freeze occurring could be anywhere between 40% and 80%, would that change his decision?
Q6) Refer to Exhibit 9-2. What should the credit union do? What is their expected profit?
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Chapter 10: Introduction to Simulation Modeling
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Q1) Refer to Exhibit 10-2. Total sales is a product of three different types of input distributions. What does the output distribution look like? What is the standard deviation of the total sales? What are the 5th and 95th percentiles of this distribution?
Q2) Refer to Exhibit 10-1. A little later on, management still believes the upper and lower bounds for the costs are $5M and $8M, but now they can also state that "we believe the most likely value is about $6.5M."
Q3) Discrete distributions are sometimes used in place of continuous distributions:
A)because they are more accurate
B)because they are more simple
C)when we don't know the mean and variance of the distribution D)when we need to generate a histogram
Q4) Refer to Exhibit 10-2. Finally, suppose the apparel company receives an uncertain fraction of the total retail revenue from its retailers, modeled as a Triangular(0.70,0.75,0.80) distribution, and then must subtract production and operations costs, which are modeled as a Lognormal distribution with mean of $1,000,000 and standard deviation of $300,000. In that case, what is the expected net profit from the jacket line?
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12
Chapter 11: Simulation Models
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Q1) The main issue in marketing and sales models is:
A)the amount invested in marketing
B)the timing of marketing
C)the profit from sales
D)the timing of sales
Q2) A marketing simulation model can be used to determine the expected profit under uncertain customer loyalty, but an optimization model must be used to determine the optimal amount to spend on increasing customer loyalty.
A)True
B)False
Q3) Which of the following is typically not an application of simulation models?
A)Operations models
B)Financial models
C)Marketing models
D)Logistics models
Q4) Which of the following functions is not an @RISK statistical function?
A)RISKMIN
B)RISKMAX
C)RISKPERCENTILE
D)RISKSIMTABLE
Page 13
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Chapter 12: Inventory and Supply Chain Models
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Q1) Refer to Exhibit 12-3. Formulate a Solver model and find the optimal order quantity for the cotton sweaters. What is the optimal order? How much, if any, is the maximum backlog?
Q2) Refer to Exhibit 12-2. Assuming there are no storage costs, formulate a Solver model and find the optimal order quantity.
Q3) Which of the following is one of the two ways to "cost" shortages in inventory modeling?
A)Lengthening the order cycle
B)Constraining the lead time for orders
C)Increasing the cost of the safety stock
D)Constraining the service level
Q4) Refer to Exhibit 12-1. Suppose there is a storage cost of $10 per unit. Make the appropriate change to your Solver model or EOQ formula, and find the optimal order quantity in that case.
Q5) Critical fractile analysis enables you to see how net profit is distributed for a given order quantity, but it isn't well suited to finding the optimal order quantity.
A)True
B)False
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Chapter 13: Queuing Models
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Q1) The parameter in an exponential distribution can be interpreted as a:
A)time
B)rate
C)mean
D)standard deviation
Q2) The decision to balk at entering a queuing system can be made by the customer or the system.
A)True
B)False
Q3) A requirement for steady state analysis of a queuing system is that:
A)the initial conditions are still in effect
B)the waiting time must be exponentially distributed
C)the analysis period is at least two hours
D)the service rate must be constant
Q4) In a process where interarrival times are exponentially distributed, the time since the last arrival is irrelevant.
A)True
B)False
Q5) Refer to Exhibit 13-2. How many of the servers are busy on average?
Q6) Refer to Exhibit 13-4. What percentage of customers do not wait in the queue?
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Chapter 14: Regression and Forecasting Models
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Q1) The least squares line is the line that minimizes the sum of the residuals.
A)True
B)False
Q2) A "fan" shape in a scatterplot indicates:
A)nonconstant error variance
B)a nonlinear relationship
C)the absence of outliers
D)sampling error
Q3) The adjusted R2 is used primarily to monitor whether extra explanatory variables really belong in a multiple regression model.
A)True
B)False
Q4) Refer to Exhibit 14-1. Estimate a simple linear regression model involving shipping cost and package weight. Interpret the slope coefficient of the least squares line as well as R2.
Q5) In regression analysis, we can often use the standard error of estimate se to judge which of several potential regression equations is the most useful.
A)True
B)False
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