MS12-TB04

# MS12-TB04 - 4 Linear Programming Applications in Marketing,...

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4 Linear Programming Applications in Marketing, Finance and Operations Management MULTIPLE CHOICE 1. Media selection problems usually determine a. how many times to use each media source. b. the coverage provided by each media source. c. the cost of each advertising exposure. d. the relative value of each medium. ANSWER: a TOPIC: Media selection 2. To study consumer characteristics, attitudes, and preferences, a company would engage in a. client satisfaction processing. b. marketing research. c. capital budgeting. d. production planning. ANSWER: b TOPIC: Marketing research 3. A marketing research application uses the variable HD to represent the number of homeowners interviewed during the day. The objective function minimizes the cost of interviewing this and other categories and there is a constraint that HD > 100. The solution indicates that interviewing another homeowner during the day will increase costs by 10.00. What do you know? a. the objective function coefficient of HD is 10. b. the dual price for the HD constraint is 10. c. the objective function coefficient of HD is -10. d. the dual price for the HD constraint is -10. ANSWER: d TOPIC: Marketing research 4. The dual price for a constraint that compares funds used with funds available is .058. This means that a. the cost of additional funds is 5.8%. b. if more funds can be obtained at a rate of 5.5%, some should be. c. no more funds are needed. d. the objective was to minimize. ANSWER: b TOPIC: Portfolio selection 1

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2 Chapter 4 Linear Programming Applications 5. Let M be the number of units to make and B be the number of units to buy. If it costs \$2 to make a unit and \$3 to buy a unit and 4000 units are needed, the objective function is a. Max 2M + 3B b. Min 4000 (M + B) c. Max 8000M + 12000B d. Min 2M + 3B ANSWER: d TOPIC: Make or buy 6. If P ij = the production of product i in period j, then to indicate that the limit on production of the company’s three products in period 2 is 400, a. P 21 + P 22 + P 23 < 400 b. P 12 + P 22 + P 32 < 400 c. P 32 < 400 d. P 23 < 400 ANSWER: b TOPIC: Production scheduling 7. Let P ij = the production of product i in period j. To specify that production of product 1 in period 3 and in period 4 differs by no more than 100 units, a. P 13 - P 14 < 100; P 14 - P 13 < 100 b. P 13 - P 14 < 100; P 13 - P 14 > 100 c. P 13 - P 14 < 100; P 14 - P 13 > 100 d. P 13 - P 14 > 100; P 14 - P 13 > 100 ANSWER: a TOPIC: Production scheduling 8. Let A, B, and C be the amounts invested in companies A, B, and C. If no more than 50% of the total investment can be in company B, then a. B < 5 b. A - .5B + C < 0 c. .5A - B - .5C < 0 d. -.5A + .5B - .5C < 0 ANSWER: d TOPIC: Portfolio selection 9. Department 3 has 2500 hours. Transfers are allowed to departments 2 and 4, and from departments 1 and 2. If A i measures the labor hours allocated to department i and T ij the hours transferred from department i to department j, then a. T 13 + T 23 - T 32 - T 34 - A 3 = 2500 b. T 31 + T 32 - T 23 - T 43 + A
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## MS12-TB04 - 4 Linear Programming Applications in Marketing,...

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