Northern Caribbean University Department of Professional and Continuing Education Mandeville Campus MGMT 485: Quantitative Business Analysis Quiz I MULTIPLE CHOICE. Total marks 30 Instruction: Write the most appropriate response on line provided 1) Administrators at a university will charge students $150 to attend a seminar. It costs $3000 to reserve a room, hire an instructor, and bring in the equipment. Assume it costs $25 per student for the administrators to provide the course materials. How many students would have to register for the seminar for the university to break even? 1) _______ A) 30
B) 18 C) 24 D) 16 E) 20 2) Linear mathematical programming techniques assume that all parameters in the models are 2) _______ A) predictable B) unknown C) known with certainty D) unpredictable 3) Which steps of the management science process can either be a recommended decision or information that helps a manager make a decision? 3) _______ A) problem formulation B) model construction C) model solution D) problem definition E) model implementation 4) Which of the following is an equation or an inequality that expresses a resource restriction in a mathematical model? 4) _______ A) a decision variable.
B) an objective function. C) a constraint. D) data E) a parameter. 5) Which one of the following management science methods is not a probabilistic technique? 5) _______ A) statistical analysis B) queuing analysis C) assignment models D) decision analysis 6) If the price decreases but fixed and variable costs do not change, the break even point 6) _______ A) remains the same B) decreases C) may increase or decrease, depending on sales D) increases 7) The indicator that results in total revenues being equal to total cost is called the 7) _______ A) marginal volume B) break-even point C) marginal cost
D) profit mix 8) The result of an effective decision making process should be monitored in order to 8) _______ A) insure the achievement of desired results B) reveal errors in the implementation C) reveal wrong assumptions D) all of the above 9) The management science process does not include 9) _______ A) implementation B) problem definition C) feedback D) information E) subjective preference 10) Classification of management science techniques does not recognize 10) ______ A) linear mathematical programming B) network techniques C) probabilistic techniques D) computer programming 11)
Which one of the following techniques is not a mathematical programming technique? 11) ______ A) analytical hierarchy process B) linear programming models C) integer linear programming technique D) transportation models E) goal programming 12) The processes of problem observation 12) ______ A) cannot be done until alternatives are proposed B) is the final step of problem solving C) is the first step of decision making D) requires consideration of multiple criteria 13) If fixed costs increase, but variable cost and price remain the same, the break even point 13) ______ A) decreases B) remains the same
C) increases D) may increase or decrease depending on sales 14) At the break-even point 14) ______ A) total revenue equals total cost B) revenue is maximized C) profit is maximized D) costs are minimized 15) If the price increases but fixed and variable costs do not change, the break even point 15) ______ A) may increase or decrease, depending on sales B) decreases C) increases D) remains the same 16) A difficult aspect of using spreadsheets to solve management science problems is 16) ______ A) data entry B) performing sensitivity analysis C) setting up a spreadsheet with complex models and formulas
D) obtaining the solution to standard management science problems 17) Which variable is not a component of break-even analysis? 17) ______ A) fixed costs B) number of customers C) variable costs D) total costs E) number of employees 18) A university is planning a seminar. It costs $3000 to reserve a room, hire an instructor, and bring in the equipment. Assume it costs $25 per student for the administrators to provide the course materials. If we know that 20 people will attend, what price should be charged per person to break even? 18) ______ A) 150 B) 175 C) 200 D) 120 E) 100 19)
A technique that assumes certainty in its solution is referred to as 19) ______ A) probabilistic B) parametric C) deterministic D) indeterminate 20) The purpose of break-even analysis is to determine the number of units of a product to sell that will 20) ______ A) result in a profit B) result in a loss C) appeal to the consumer D) result in zero profit 21) EKA manufacturing company produces Part # 2206 for the aerospace industry. The unit production cost of part # 2206 is $3. The fixed monthly cost of operating the production facility is $3000. Next month’s demand for part # 2206 is 200 units.
How much should the company charge for each unit of part # 2206 to break-even? 21) ______ A) 20 B) 18 C) 10 D) 12 E) 15 22) The term __________ refers to testing how a problem solution reacts to changes in one or more of the model parameters. 22) ______ A) sensitivity analysis B) decision analysis C) break-even analysis D) decision science E) graphical solution 23) A bed and breakfast even every month if they book 30 rooms over the course of a month. Their fixed cost is $6000 per month and the revenue they receive from each booked room is $180. What their variable cost per occupied room? 23) ______ A) $40 B) $62 C) $48
D) $30 24) The quantitative analysis approach requires 24) ______ A) the manager to have prior experience with similar problems B) uncomplicated problems C) mathematical expressions for the relationship D) all of the above 25) The components of break-even analysis are 25) ______ A) volume and profit B) volume, cost and profit C) volume and cost D) cost and profit 26) __________ are generally independent of the volume of units produced and sold. 26) ______ A) Profits B) Fixed costs C) Variable costs D) average cost 27) Larry’s Fish Market buys salmon (S) for $5 per pound and a local whitefish (W) for $3. 50 per pound.
Larry wants to minimize his cost, but he cannot spend more than $160. The objective function that minimizes these costs for Larry is: 27) ______ A) Max 5S + 3. 5 W B) 5S + 3. 5W ? 160 C) 5S + 3. 5W ? 160 D) 5S + 3. 5W = 160 E) Min 5S + 3. 5 W 28) A baker uses organic flour from a local farmer in all of his baked goods. For each batch of bread (x1), he uses 4 lbs. For a batch of cookies (x2), he uses 3 pounds, and for a batch of muffins (x3) he uses 2 pounds. The local farmer can supply him with no more than 24 pounds per week. The constraint that represents this condition is: 28) ______ A) x1 ? 6, x2 ? 8, x3 ? 12 B) x1+ x2 + x3 ? 24
C) x1+ x2 + x3 ? 24 D) x1 ? 8, x2 ? 8, x3 ? 8 E) 4×1+ 3×2 + 2×3 ? 24 29) It costs $50,000 to start a production process. Variable cost is $25 per unit and revenue is $$45 per unit. What is the break even point? 29) ______ A) 2000 units B) 1000 units C) 2500 units D) 1111 units 30) EKA manufacturing company produces Part # 2206 for the aerospace industry. Each unit of part # 2206 is sold for $15. The unit production cost of part # 2206 is $3. The fixed monthly cost of operating the production facility is $3000. How many units of part # 2206 have to be sold in a month to break-even? 30) ______ A) 250 B) 200 C) 1000 D) 500 E) 166. 67 A?