Quantitative Methods for Business Solved Exam Questions
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Introduction
Quantitative Methods for Business introduces students to the fundamental mathematical, statistical, and analytical techniques used to support decision-making in business environments. The course covers topics such as data collection and analysis, probability concepts, hypothesis testing, regression analysis, forecasting, linear programming, and decision models. Emphasis is placed on the practical application of these quantitative methods to solve real-world business problems, enhance operational efficiency, and inform strategic planning. Through lectures, case studies, and hands-on use of software tools, students develop the skills necessary to interpret data, model business scenarios, and make informed decisions based on quantitative evidence.
Recommended Textbook
Introduction to Management Science A Modeling and Case Studies Approach With Spreadsheets
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2
Chapter 1: Introduction
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Sample Questions
Q1) Managers may base their decisions on which of the following?
A)Quantitative factors.
B)Their best judgement.
C)Opinions from other managers.
D)Past experience.
E)All of the above.
Answer: E
Q2) The discovery of the simplex method in 1947 was the beginning of management science as a discipline.
A)True
B)False
Answer: False
Q3) Which of the following are steps in a typical management science study?
A)Define the problem and gather data.
B)Formulate a model to represent the problem.
C)Test the model and refine it as needed.
D)Help to implement the recommendations.
E)All of the above.
Answer: E
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Page 3
Chapter 2: Linear Programming: Basic Concepts
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Sample Questions
Q1) What is the objective function?
A)P = 4A + 1B.
B)P = 0.25A + 1B.
C)P = 1A + 4B.
D)P = 1A + 1B.
E)P = 0.25A + 0.5B.
Answer: C
Q2) What is the objective function?
A)P = 2L + 3D.
B)P = 2L + 4D.
C)P = 3L + 2D.
D)P = 4L + 2D.
E)P = 5L + 3D.
Answer: C
Q3) The graphical method can handle problems that involve any number of decision variables.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Linear Programming: Formulation and Applications
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Sample Questions
Q1) Transportation problems are concerned with distributing commodities from sources to destinations in such a way as to minimize the total distribution cost.
A)True
B)False
Answer: True
Q2) Using techniques to test the initial versions of a model to identify errors and omissions is called:
A)model validation.
B)model enrichment.
C)model enhancement.
D)model debugging.
E)None of the above.
Answer: A
Q3) A mixed linear programming problem will always contain some of each of the three types of constraints in it.
A)True
B)False
Answer: False
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Chapter 4: The Art of Modeling With Spreadsheets
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Sample Questions
Q1) It is better to use power functions in Excel to complete a calculation in a single cell than to spread out a calculation over many cells using simpler formulas.
A)True
B)False
Q2) Once the data is entered,it should never be moved.
A)True
B)False
Q3) A relative reference does not change when it is filled or copied into other cells.
A)True
B)False
Q4) Which of the following is an appropriate first step when building a spreadsheet model?
A)Start with building a small scale model.
B)Visualize where you want to finish.
C)Test the model.
D)Expand the model to full scale.
E)Optimize the model.
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6
Chapter 5: What-If Analysis for Linear Programming
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Sample Questions
Q1) The allowable range gives ranges of values for the objective function coefficients within which the values of the decision variables are optimal.
A)True
B)False
Q2) If the coefficients of Activity 1 and Activity 2 in the objective function are both increased by $10,then:
A)the optimal solution remains the same.
B)the optimal solution may or may not remain the same.
C)the optimal solution will change.
D)the shadow prices are valid.
E)None of the above.
Q3) The term "allowable range for an objective function coefficient" refers to a constraint's right-hand side quantity.
A)True
B)False
Q4) The purpose of a linear programming study is to help guide management's final decision by providing insights.
A)True
B)False
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Chapter 6: Network Optimization Problems
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Sample Questions
Q1) Which of the following can be used to optimally solve minimum cost flow problems?
A)The simplex method.
B)The network simplex method.
C)A greedy algorithm.
D)a and b only.
E)All of the above.
Q2) Which of the following is not an assumption of a maximum flow problem?
A)All flow through the network originates at one node,called the source.
B)If a node is not the source or the sink then it is a transshipment node.
C)Flow can move toward the sink and away from the sink.
D)The maximum amount of flow through an arc is given by the capacity of the arc.
E)The objective is to maximize the total amount of flow from the source to the sink.
Q3) In a maximum flow problem,flow is permitted in both directions and is represented by a pair of arcs pointing in opposite directions.
A)True
B)False
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Chapter 7: Using Binary Integer Programming to Deal With
Yes-Or-No Decisions
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Sample Questions
Q1) The algorithms available for solving BIP problems are much more efficient than those for linear programming which is one of the advantages of formulating problems this way.
A)True
B)False
Q2) The Excel sensitivity report can be used to perform sensitivity analysis for integer programming problems.
A)True
B)False
Q3) BIP can be used to determine the timing of activities.
A)True
B)False
Q4) In a BIP problem with 2 mutually exclusive alternatives,x<sub>1</sub> and x<sub>2</sub>,the following constraint needs to be added to the formulation if one alternative must be chosen:
A)x<sub>1</sub> + x<sub>2</sub> \(\le\) 1.
B)x<sub>1</sub> + x<sub>2</sub> = 1.
C)x<sub>1</sub> - x<sub>2</sub> \(\le\) 1.
D)x<sub>1</sub> - x<sub>2</sub> = 1.
E)None of the above.
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Chapter 8: Nonlinear Programming
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Sample Questions
Q1) Sometimes the Solver can return different solutions when optimizing a nonlinear programming problem.
A)True
B)False
Q2) If D1 is a data cell,and C1 and C2 are changing cells,then IF(D1 >= 2,C1,C2)is a linear function.
A)True
B)False
Q3) Which of the following is an example of a nonlinear function?
A)Profit = 5x<sub>1</sub> + 7x<sub>2</sub> - 2x<sub>2</sub><sup>2</sup>.
B)Profit = 8x<sub>1</sub>x<sub>2</sub> - x<sub>1</sub><sup>2</sup>4x<sub>2</sub><sup>2</sup>.
C)Profit = x<sub>1</sub> + 6x<sub>2</sub> + 3x<sub>1</sub>x<sub>2</sub>.
D)None of the above.
E)All of the above.
Q4) Mutation is the technique used to create the next generation of solutions in the Evolutionary Solver.
A)True
B)False
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Chapter 9: Decision Analysis
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Sample Questions
Q1) An example of maximax decision making is a person buying lottery tickets in hopes of a very big payoff.
A)True
B)False
Q2) If he uses the maximum likelihood criterion,which size bus will he decide to purchase?
A)Small.
B)Medium.
C)Large.
D)Either small or medium.
E)Either medium or large.
Q3) If he uses Bayes' decision rule,which kind of dwellings will he decide to build?
A)Single family.
B)Apartments.
C)Condos.
D)Either single family or apartments.
E)Either apartments or condos.
Q4) The maximax approach is an optimistic strategy.
A)True
B)False
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Chapter 10: Cd Supplement - Decision Analysis
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Sample Questions
Q1) The Laplace criterion treats states of nature as being equally likely.
A)True
B)False
Q2) The equally likely criterion assigns a probability of 0.5 to each state of nature.
Multiple Choice Questions
A)True
B)False
Q3) The minimax regret strategy is:
A)Buy.
B)Rent.
C)Lease.
D)High.
E)Low.
Q4) The maximax approach is an optimistic strategy.
A)True
B)False
Q5) The maximin criterion is an optimistic criterion.
A)True
B)False
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Chapter 11: Forecasting
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Sample Questions
Q1) The mean square error is the square of the mean of the absolute deviations.
A)True
B)False
Q2) Causal forecasting obtains a forecast for a dependent variable by relating it directly to one or more independent variables.
A)True
B)False
Q3) The last-value forecasting method requires a linear trend line.
A)True
B)False
Q4) Exponential smoothing with trend was designed for time-series that have great variability both up and down.
A)True
B)False
Q5) A moving-average forecast tends to be more responsive to changes in the time-series data when more values are included in the average.
A)True
B)False
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Chapter 12: Queueing Models
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Sample Questions
Q1) In a single-server system,the utilization factor is equal to the mean arrival rate divided by the mean service rate.
A)True
B)False
Q2) If clerk cost is $30 per hour and customer waiting time represents a cost of $20 per hour,how many clerks can be justified on a cost basis?
A)2.
B)3.
C)4.
D)5.
E)6.
Customers filter into a record shop at an average of 1 per minute (exponential interarrivals)where the service rate is 15 per hour (exponential service times).
Q3) The standard deviation for the degenerative distribution equals zero.
A)True
B)False
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Chapter 13: CD Supplement - Additional Queueing Models
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Sample Questions
Q1) A basic difference between infinite calling population and finite calling population queueing models is:
A)the number of servers.
B)the average waiting time.
C)the arrival distribution.
D)the size of the potential customer base.
E)the processing rate.
Q2) The finite calling population queueing model is appropriate when the potential calling population is relatively small.
A)True
B)False
Q3) The Erlang distribution with k = 4 has higher variability than the Erlang distribution with k = 2.
Multiple Choice Questions
A)True
B)False
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Chapter 14: Computer Simulation: Basic Concepts
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Sample Questions
Q1) Which of the following is not a reason for simulation's popularity?
A)It is simple to use and/or understand.
B)Extensive software packages are available.
C)Many situations are too complex for mathematical solutions.
D)If can be used for a wide range of applications.
E)It is typically an inexpensive approach.
Q2) Solver Table is used to generate many replications of a computer simulation.
A)True
B)False
Q3) A number is a random number between 0 and 1 if it is generated in such a way that every possible number within this interval has an equal chance of occurring.
A)True
B)False
Q4) Random numbers can be generated in Excel by using the VLOOKUP function.
A)True
B)False
Q5) A flow diagram shows the output of a simulation run.
A)True
B)False
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Chapter 15: CD Supplement - the Inverse Transformation
Method for Generating Random Observations
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Sample Questions
Q1) Excel's RAND()function is designed specifically for applying the inverse transformation method to any discreet probability distribution.
A)True
B)False
Q2) The inverse transformation method can be used to generate random observations from a probability distribution.
A)True
B)False
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Chapter 16: Computer Simulation With Crystal Ball
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Sample Questions
Q1) OptQuest can not handle constraints in a simulation model.
Multiple Choice Questions
A)True
B)False
Q2) A forecast cell refers to a random input cell.
A)True
B)False
Q3) The sensitivity chart conveys which of the following?
A)The relative frequency of various forecast cell values.
B)The increase in profit per unit increase in an assumption cell.
C)It indicates how strongly various assumption cells influence the forecast cell.
D)The mean profit.
E)None of the above.
Q4) Which of the following is not a characteristic of the uniform distribution?
A)It has a fixed minimum value.
B)It has a fixed maximum value.
C)Some value is the most likely.
D)All of the above are characteristic of the uniform distribution.
E)None of the above are characteristic of the uniform distribution.
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Chapter 17: CD - Solution Concepts for Linear Programming
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Sample Questions
Q1) If the feasible region in a linear programming problem is unbounded,then the problem is unbounded.
A)True
B)False
Q2) It is possible to have more than one corner point of the feasible region as an optimal solution to a linear programming problem.
A)True
B)False
Q3) If a problem has more than one optimal solution then:
A)the slope of the objective function line is the same as one of the constraints.
B)the problem was not formulated correctly.
C)the problem must be re-solved.
D)All of the above.
E)None of the above.
Q4) It is possible in some cases for a point inside the boundary of the feasible region to be an optimal solution.
A)True
B)False
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19
Chapter 18: CD - Transportation and Assignment Problems
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Sample Questions
Q1) The linear programming model of a transportation problem is one of maximization of its objective function.
A)True
B)False
Q2) A network representation is helpful because it shows the geographical layout of the sources and destinations of a problem.
A)True
B)False
Q3) Transportation problems can be solved by the simplex method.
A)True
B)False
Q4) Assignment problems are cost minimization problems and cannot be solved as a profit maximization problem.
A)True
B)False
Q5) It is not possible to solve a transportation problem that has \(\le\) instead of = signs for the supply constraints.
A)True
B)False
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Chapter 19: CD - Pertcpm Models for Project Management
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Sample Questions
Q1) Project managers must often function in an environment that is beset with uncertainties.
A)True
B)False
Q2) There are four activities on the critical path.Coincidentally,their standard deviations are all equal to 4.The standard deviation of the critical path is therefore equal to:
A)2 days.
B)4 days.
C)8 days.
D)16 days.
E)64 days.
Q3) PERT/CPM can answer which of the following questions?
A)When do activities need to start and finish to meet a deadline?
B)How much delay can be tolerated for certain activities?
C)Given uncertainties,what is the probability that a project will finish on time?
D)What is the least expensive way to expedite a project to meet a deadline?
E)All of the above.
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21
Chapter 20: CD - Goal Programming
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Sample Questions
Q1) Weighted goal programming provides a way of striving toward several objectives simultaneously.
A)True
B)False
Q2) Preemptive goal programming strives to achieve all of the goals simultaneously.
A)True
B)False
Q3) Goal programming provides a way to identify the most important goal and achieve it.
A)True
B)False
Q4) In which of the following situations is preemptive goal programming more appropriate than weighted goal programming?
A)When there are major differences in the importance of the goals.
B)When all of the goals are roughly equal in importance.
C)When there is a single objective or goal.
D)None of the above.
E)b and c only.
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Page 22
Chapter 21: CD - Inventory Management With Known Demand
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Sample Questions
Q1) At what point should the manager reorder?
A)0 cases remaining.
B)4 cases remaining.
C)12 cases remaining.
D)16 cases remaining.
E)20 cases remaining.
Q2) In the basic EOQ model,an annual demand of 40 units,a setup cost of $5,and a holding cost of $1/unit per year will result in an EOQ of:
A)20.
B)square root of 200.
C)200.
D)400.
E)None of the above.
Q3) In the basic EOQ model,annual holding cost is one-half of the total annual cost. A)True
B)False
Q4) MRP is a system for determining optimal order quantities for dependent-demand products.
A)True
B)False
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Chapter 22: CD - Inventory Management With Uncertain Demand
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Sample Questions
Q1) The perishable product model can be very helpful in determining how much to order.
A)True
B)False
Q2) The EOQ and (R,Q)models are appropriate if unused items can be carried over into subsequent time periods.
A)True
B)False
Q3) Which one of these would not be a factor in determining the reorder point?
A)The EOQ.
B)The lead time.
C)The average demand.
D)Holding costs.
E)All are factors.
Q4) Shortage costs are easily quantified.
A)True
B)False
Q5) The perishable product model can be very helpful in determining when to order.
A)True
B)False
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