311_Fall09_MidtermII _Solution_Chen

# 311_Fall09_MidtermII _Solution_Chen - Name(please print...

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Name: (please print) Midterm II solutions BUAD311 – Operations Management Section A: Multiple Choices [21 points, 3 points per part; no partial credit] 1. Which of the following statements is TRUE about LP? I. If the constraint is non-binding, the according shadow price must be zero. II. If one of the resources (right-hand side of a constraint) is increased but within the allowable increase, the optimal solutions to the decision variables will stay unchanged. III. If one of the objective coefficients’ values is decreased but within the allowable decrease, the optimal solutions to the decision variables will stay unchanged. IV. An LP can have at most one binding constraint. a. I only b. II and III c. I and III d. I, II and III e. I, II, III and IV Answer: C 2. Which of the following is TRUE ? a. In the Timeshare case, the total number of customers who get assigned a timeshare and the total number of customers who get assigned their top ranked timeshare can be maximized at the same time. b. This is not an LP program because it has no non-negative constraint. 5 2 . . min + + y x t s y x c. Every LP must have at least one solution that will satisfy all the constraints. d. An LP may have more than one optimal solution for the decision variables. Answer: d 3. Which of the following statement is TRUE ? a. When drawing a decision tree, we will first draw all the decision nodes and their branches and then all the event nodes and their branches. b. As we change the process/timeline of our decision making, the decision tree will change corresponding. c. In a decision tree, each decision node is always followed by two branches. d. In a decision tree, each event node is always followed by two branches.

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Answer: b 4. When deciding the overbook strategy, which of the following information is irrelevant to the airline? a. The spoilage cost b. The cannibalization cost c. The denial boarding cost d. Forecasted no-shows Answer: b 5. The company is launching a new product. We have to decide whether we want to research the market before we commit to a huge investment. The market research is of course costly. Which of the following statements is TRUE ? a.
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