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CHAPTER 12
1. Which of the following statements about quantitative methods is incorrect?
a. Every life-life decision may be modeled mathematically under certain assumptions and a
deterministic solution may be achieved.
b. Quantitative or mathematical models are usually over-simplifications of the real world; to
perform the calculations, assumptions must be made.
c. In applying quantitative methods, behavioral issues should never be taken into account.
d. In applying quantitative methods, some relevant variables may not be quantified and are
therefore not included, and the quantitative techniques can be very complex and costly.
2. Simulation is a technique for experimenting with logical or mathematical models with the use
of the computer. Which of the following statements about simulation models is false?
a. Simulation models are stochastic or probabilistic models
b. Simulation models mathematically estimate what performance would be under various
conditions
c. Simulation models are deterministic in nature
d. Simulation modeling samples the operation of a system
3. Exogenous variables, or input variables, are
a. The means of measuring the results of a decision after the fact.
b. Important to the decision-making process but are outside the control of the decision
maker.
c. Are under the decision maker’s control.
d. Are limitations that must be considered as part of the decision process.
4. It is a mathematical method for making decision about the likelihood of future events, such as
sales and profits, in the face uncertainty.
a. Learning curves
b. Probability distribution theory
c. Queuing theory
d. Gantt charting
5. Probability analysis or risk analysis is
a. Incompatible with sensitivity analysis
b. An extension of sensitivity analysis
c. Used only for situation involving 3 or fewer possible outcomes
d. Used only when the sum of probabilities is greater 1
6. It is found by multiplying the probability of each outcome by its payoff and summing the
products. It represents the long term average payoff for repeated trials.
a. Expected value
b. Face value
c. Present value
d. Maturity value
7. Which of the following statements about expected value of perfect information is incorrect?
a. It is the difference between the expected profit under certainty and the expected
monetary value of the best act under uncertainty
b. It is the excess of the total conditional profits under certainty over the profit from the best
decision under uncertainty
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c. It is the difference between the expected profit under certainty and the expected
opportunity lost
d. It is the difference between the expected value without perfect information and the
expected value under uncertainty
8. Jess Company operates 3 shipping terminals, A, B, and C. Terminals A, B, and C handle
approximately 60%, 30%, and 10% respectively of the total cargo shipped, with error rates of
3% for A, 4% for B, and 6% for C.
Jess Company’s internal auditor randomly selects 1 shipping document, ascertaining that this
document contains an error. What is the probability that the error occurred in Terminal B?
a. 33 1/3 %
b. 30%
c. 40%
d. 1.20%
Nitz’ Company is planning to produce a new product, Duhat Soap. A marketing consultant
prepared the following payoff probability distribution describing the relative likelihood of monthly
sales, volume sales, and relative contribution margin for Duhat Soap:
45,000 5% 225,000
9. If NItz’ Company decides to market Duhat Soap, the expected value of monthly sales volume is
a. P141,000
b. P705,000
c. P106,500
d. P21,300
10. If NItz’ Company decides to market Duhat Soap, the expected value of monthly contribution
margin is
a. P141,000
b. P705,000
c. P106,500
d. P21,300
NGO, a charitable organization, was given a special permit by the city government to conduct gains of
chance for fund-raising purposes. From this project, NGO expects to earn profit from admission fees
and sales of refreshments, and wants to merely ‘break-even’ on the games of chance.
In one of the games, a player draws one card from a standard deck of 52 cards. If the player draws any
one of the 4 “queens,” he wins P50; if he draws any one of the 13 “hearts,” he wins P20.
Leevoi Scan Company’s gross profit rate averages 20% of sales. What is the expected value of
Leevoi Scan Company’s budgeted cost of good sold for 20B?
a. P56,540
b. P70,800
c. P14,160
d. P52,260
14. The country has been experiencing frequent brownouts since its hydroelectric plants
experienced some technical problems. Statistics showed that the country has the following
average numbers of brownouts:
If Lanie Company would lease the generator in the coming year, how much is the estimated
savings (additional expense) per month next year?
a. (P11,700)
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b. P11,700
c. P140,400
d. P40,00
Video town sells original DVD movies, classified as Suspense, drama, and horror. Based on the past
sales data, Video Town’s manager has made random letter assignments to represent customers
choices, as follows:
Suspense A to D 4
Drama E to F 2
Musical G to I 3
Horror J 1
15. What is the probability that a customer will buy a musical video?
a. 40%
b. 20%
c. 30%
d. 10%
16. In running a simulation of the demand for the types of the movie being sold by the Video
Town, the following letters are drawn in sequence: H, F and B. The simulation indicates that
the first customer will buy a
a. Suspense movie
b. Drama
c. Musical
d. Horror
17. Leilani Company uses materials X and Y in the manufacture of its only product. The costs of
materials X to Y are expected to decrease in the coming monyhs.
The expected cost changes (which are independent of one another), as well as their
probabilities, were presented by the Purchasing Manager to the Budget Committee as follows:
PROBABILITIES
Decrease in Costs Material X Material Y
2% 20% 40%
6% 50% 10%
8% 30% 50%
b. 30%
c. 500%
d. 5%
Health conscious, Inc. is planning to open a spa in the city. A market study conducted by an
independent market researcher shows the following estimates of the number of clients (and their
probabilities) during a period:
0-40 10%
41-80 40%
81-120 30%
121-160 20%
18. What is the probability of having between 81 to 160 clients in the spa during the period?
a. 30%
b. 20%
c. 50%
d. 25%
19. What is the best estimate of the expected number of clients in the spa during the period?
a. 84
b. 104
c. 80
d. 65
20. Miss Lalaine owns a piece of land that is adjacent to a big area of a vacant lot owned by the
city government. Recently, Miss Lalaine heard that the city government has plan a vacant lot.
She inquired about such plans and she was given the following, including each plan’s
probability of occurrence:
Probability
Plan A – Lease the lot a businessman who will
Construct a mail on the lot 60%
B – Construct a theme park on the vacant lot 30%
C – Construct a building that will house some
Of the city government’s offices 10%
Miss Lalaine knows that the values of her land, which she acquired ten years ago at a cost of
only P500 per square meter, will increase depending on which plan would materialize. Her
estimates are as follows:
Plan A - P5,000 per square meter
B - 2,000
C- 1,000
What is the expected value of the land?
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a. P5,000
b. P3,000
c. P2,667
d. P3,700
The local chapter of JPIA is planning to conduct a fund raising project by selling roses on Valentine’s
Day. The roses, which can be purchased from a nearby supplier at P5 each, will be sold to the students
for P15 each. Any unsold roses at the end of the day will be discarded
The estimated numbers of roses that can be sold on such day, as well as their probabilities, as follows:
600 0.20
800 0.30
1,000 0.40
1,200 0.10
21. What is the estimated sales of roses (in units) using an expected value approach?
a. 880
b. 1,000
c. 900
d. 400
22. What is the estimated unit sales of roses on Valentine’s Day using a deterministic approach
based on the most likely outcome? 880
a. 880
b. 1,000
c. 900
d. 400
23. What is the conditional profit of purchasing 1,00 units of roses but selling only 800 units?
a. P7,000
b. P8,000
c. P2,100
d. P2,800
24. Two companies share customers in the same market. Company X conducted a study of the
customers’ buying habits and obtained the following results:
Company X: 80% of its customers were repeat-customers each month, while 20%
went to Company Y
Company Y: 60% % of its customers were repeat-customers each month, while 20%
went to Company X
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If the customers’ buying habits continue for a long period, the percentage of customers each
company will have is
Company X Company Y
a. 80% 60%
b. 120% 80%
c. 66.6% 33.4%
d. 33.4% 66.6%
Mr. Imbestigador is contemplating whether to investigate the efficiency variance in its variable
manufacturing costs. The investigation will cost P 10,000. If the production departments are formed to
be operating improperly, the company will incur P 25,000 (in addition to the cost of investigation) to
correct the operations.
If the productions departments are operating improperly and Mr. Imbestigador fails to investigate ,
operating costs from various inefficiencies are expected to amount to P 40,000.
25. What is the expected value of tha act “Investigate” if the probability of improper operations is
60%?
a. P15,000
b. P10,000
c. P25,000
d. P5,000
26. What is the expected value of tha act “Do not Investigate” if the probability of improper
operations is 60%?
a. P40,000
b. P24,000
c. P34,000
d. P30,000
27. Mr. Imbestigador would be indifferent between the two actions ‘Investigate’ and ‘Do not
investigate’ if the probability of improper operation is
a. 60%
b. 40%
c. 33 1/3%
d. 66 2/3%
The social canteen can sell either halo-halo or mami (hot noodle soup) on any given day. The
contribution margin that the canteen could earn from halo-halo and mami is affected by the weather,
as follows:
28. If the probability of hot weather on a given day at this time is 60%, what is the expected
payofffor selling halo-halo?
a. P11,400
b. P9,000
c. 13,560
d. 11,640
29. What is the expected payoff for selling the mami if the probability of hot weather on a given
day at this time is 60%?
a. P11,400
b. P6,840
c. P13,800
d. P11,640
30. If the probability of hot weather on a given day at this time is 60%, which item(S) should the
company sell?
a. Halo-halo, because this item is salable when weather is hot
b. Mami, because it has the higher expected payoff
c. Halo-halo amd mami, so tha canteen could maximize contribution margin
d. 60% halo-halo and 40% mami
31. If the canteen’s management could have perfect information, i.e., it could know with certainty
that the probability of hot weather on a given day at this time is 60%, what is the expected
payoff?
a. P9,000
b. P13,800
c. P15,000
d. P11,400
32. Refer to the Item #31. What is the expected value of perfect information?
a. P13,800
b. P11,640
c. P2,160
d. P9,000
33. Refer to the Itam # 32. If the experienced weather forecaster offers to give the canteen’s
management an accurate forecast of the weather fee, should the canteen’s management
accept the offer if the fee is P3,000?
a. yes, so the management could know the accurate weather forecast
b. yes, because the canteen would be able to maximize the contribution margin if its
management knows the accurate weather forecast
c. no, because nobody can forecast weather accurately
d. no, because the cost of information is greater than the expected value of perfect
information
34. decision tree analysis is
a. an approach to solving problems by dividing a large mathematical model into smaller,
more manageable pieces in such a way that once the smaller problems have been solved,
the result is the optimal solution to the overall model.
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Each new product requires one component part. Thus, production requirement for the part is
the same as the demand for the new product, which could be high (5,000 units per month),
with probability of 70% or low (2,000 units per month)
The contribution margin pe unit of the new product is p12 if the company will make the part,
and P8 if the part is purchased from local suppliers.
The company’s management accountant prepared the following decision tree to help
management select the better alternative:
In a PERT network, the optimistic for a particular activity is 3weeks, the most likely time is
5weeks, and the pessimistic time is 7weeks.
Describe the interrelationship of several activities to complete the project the arrow represent the
activities. The numbers indicates the expected time in months to complete each activity
2 B 6
E
A
4
3
D
C 5
50. Which of the following statements about the PERT diagram incorrect?
a. The PERT diagram has 3 paths
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a. 72 weeks
b. Path A
c. Path C
d. 36 weeks
The following network describes the logic of a particular project’s activities with the duration in days
shown in parenthesis: 12 16
14 B 16 D F
A C
E F
G
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8 9
To reduce the normal completion time of job 55, and at the same time, earn the highest possible
income from the project, Mr. Morales is considering to crash some of the activities in the project.
The PERT diagram for job 55 shows to path worth considering:
The activity cost chart for a manufacturing project of Lody, Inc. is presented below:
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NORMAL CRASH
Activity Cost Time (days) Cost Time(days)
AB P 9,000 7 P 12,000 5
AD 15,000 10 15,750 9
AC 12,000 11 14,250 8
BE 18,000 14 21,000 10
DE 24,000 13 27,600 10
CE 18,000 15 20,250 13
BD 7,500 2 10,500 1
BC 6,000 1 7,500 ½
From the network diagram for this project, the critical path is Path A-C-E
59. How long is the expected duration to complete the entire project?
a. 26 days
b. 23 days
c. 22 days
d. 21 days
60. In order to keep costs at a minimum and decrease the completion time of the project by 3 days,
the company should crash an activity. Which activity should be crash and how much is the
incremental cost of crashing such activity?
a. AC, P2,250
b. CE P2,250
c. DE P3,600
d. AB P3,000 and AD P750
61. It is mathematical technique used to maximize a revenue, contribution margin or profit function,
or minimize a cost function subject to constraints, such as scars resources and production
capacity.
a. PERT
b. Queuing Theory
c. Linear Programing
d. High-Low Points Method
62. Linear programming is a mathematical technique that is used to allocate scars resources.
Mathematical expressions are used to describe a problem. In a linear programming model, the
measure of effectiveness that is to be maximized or minimized is the
a. Set of decision variables
b. Set of slack variables
c. Constraints function
d. Objective function
63. In a linear programming model, the constraints are
a. Minimize
b. The cost
c. The revenues are profits to be maximized
d. The scars resources
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64. Mocho Company wants to allocate its available paths between 2 investment alternatives: stacks
and bonds, which differ in terms of return and risk. The company will invest at most 60% in
either investment choice and desires to earn at least 20% from the investment.
To allocate its available funds between stocks and bonds, the appropriate mathematical
technique that much the company can use is
a. Queuing theory
b. Capital budgeting
c. PERT or CPM
d. Linear programming
Javee Corporation produces and sells 2 products, A and B. the contribution margin per unit of A is P10,
while of that B is P15. 2 types of materials, X and Y, are used to produce both products. At present, the
company is experiencing some difficulties in acquiring the said materials, so it could produce as much
quantity of A and B as it wants to produce. To properly allocate the available materials and, at the same
time, maximize its total contribution margin, the following model will be used:
3A + 6B ≤ 500
65. The mathematical functions that the company will use to allocate this scars materials and
maximize the total contribution margin are an example of a (an)
a. Linear programming model
b. Expected value model
c. FTV model
d. EQQ model
66. In the given mathematical functions, Max CM = 10A + 15B is the
a. Constraint function
b. Objective function
c. Shadow point
d. Objection function
67. The 2 inequality function are the
a. Objective function
b. Feasible solution
c. Constraints
d. Irrelevant variables
68. The point at which A = 60 and B = 40
a. Would minimize contribution margin
b. Would minimize cost
c. Is a corner point
d. Is a feasible point
69. To solve a linear programming problem, slack, surplus, and artificial variables must be employed.
Which of the following statements about a slack variable is correct?
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Kit Corporation produces 2 products, Tik and Tak, which uses 2 types of materials, Buk and Bok. Fixed
quantities of materials Buk and Bok are available each math. There is no constraint on the number of
unit of product Tik that can be solved, but the demand for product Tak is limited.
B Demand Constraint
C
Units of Product
E
F G H
75. The feasible solution region is bounded by the lines connecting points
a. A,B,C,D, and F
b. B, C, D, and F
c. B, C,D, and G
d. A, C, E , and H
76. If the profit line for Tik and Tak is moved rightward on the graph while maintaining its slope, the
mix of Tik and Tak that will resolve in the maximum profit (the optimal solution) can determined
from
a. Any point within the feasible solution region touched by the profit line
b. The last point in the feasible solution region touched by the profit line
c. The first point in the feasible solution region touched by the profit line
d. Any corner point in the feasible solution region
Jasper Company produces 2 products, C and D, each of which requires 2 processes, grinding and mixing,
the contribution margin is P15 for product C and P20 for product D. the numbers are required to process
the 2 products are as follows:
Product C Product D
Grinding 10 20
Mixing 10 10
The numbers of hours available during the period are 400 hours for grinding and 300 hours for mixing.
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a. 0 20
b. 30 0
c. 20 10
d. 40 0
Balls Inc. produces 2 products, squid balls(S) and fish balls (F), in 2 departments, the mixing
department and deep frying department. Production of the 2 products (combined)during any period
cannot exceed 23,700 kilos. Data on the 2 products follow:
82. Using linear programming, the objective function to determine the optimal production of the
balls each period is
a. CM = 40M + 30D
b. CM = 40S + 30F
c. 40S + 30S ≤ CM
d. 5S + 5.10F = 70
83. Which of the following is not a constraint function for this linear programming problem?
a. 3S + 1.5F ≤ 48,000
b. 2S + 3.6F ≤ 72,000
c. S + F ≤ 23,700
d. CM = 40S + 30F
84. The optimal number of units for product D can solved by calculating
a. 2/3 (48,000 – 1.5F) + 3.6F = 72,000
b. 2S + 3.6S ≤ 72,000
c. 3S + 1.5F ≤ 48,000
d. CM = 40S + 30F
Bags Company reduces travelling bags and document bags. It uses 4 cutting machine and 4 sewing
machines which it trends for 2,000 per month. Each machine’s capacity is 300 hours per month. As of
now, no additional machines can be obtained.
85. If a linear programming model is used to determine the optimal product mix that will maximize
contribution margin (CM), the objective function is
a. Max. CM = 350T + 200D
b. Min. VC = 1,000T + 700D
c. Max. S = 1,350T + 900D
d. Max. Cm =550TD
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86. How should the constraint function for the cutting machine be expressed?
a. C + S ≤ 1,200
b. 2C + 4S ≤ 1,200
c. 2T + D ≤ 1,200
d. 4T + D ≤ 1,200
87. How should the constraint function for the sewing machine be expressed?
a. 4T + D ≤ 1,200
b. 4T + D ≤ 4
c. 4T + D ≤ 300
d. 4T + D ≤ 1,200
88. Aside from the cutting machine and sewing machine constraint, another constraint in this linear
programming model for Bags Company is
a. 350T + 200D = CM
b. T + D = 1,000
c. T ≤ 1,000
d. D ≤ 1,000
89. If the graphical approach is used in this linear programming model, the graph will look like
a. C.
Document Bags
Travelling Bags
b. d.
90. Which of the following product combinations per points is not a corner point in the feasible
solution region of the linear programming graph for this LP model?
a. 0 1,000
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b. 50 1,000
c. 100 1,000
d. 300 0
91. If the following product combinations represent the corner points of the feasible solution region,
what is the optimal mix?
a. 0 0
b. 0 1,000
c. 50 1,000
d. 300 0
92. The maximum amount that the company would be willing to spent on advertising to increase the
demand for document bags to 1,200 units is
a. P0
b. P40,000
c. P180,000
d. P22,500
93. Cheen Corporation makes 2 products that are processed in 2 machines. The objective function
and the constraints are as follows:
Max. P = 16A + 8B
8A + 12B ≤ 72
8A + 4B ≤ 40
A≥O:B≥
Where A is the number of units of the first product:
B is the number of units of the second product
a. P48
b. P80
c. P160
d. P128
Chooch Company reduces 2 types of its product, regular and special. Pertinent data about the 2 product
are as follows:
94. How should the objective function (maximization of contribution margin) be expressed?
a. 20M + 28P
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b. 46 ( R + S)
c. 20R + 28S
d. 20R +28S ≤ 380
95. How should the restriction (constraints) for the 2 processes ( missing and packing) be expressed?
Mixing Packing
a. 4R + 2R ≤ 20 8S + 6S ≤ 28
b. 4M + 8M ≤ 200 2P + 6P ≤ 180
c. 4R + 8S ≤ 200 2R + 6S ≤ 180
d. 6R + 14S ≤ 200 6R + 14S ≤ 180
96. If the simplex method is use to solve this linear programming problem, how many slacks
variables are needed for the simplex tableau?
a. 3
b. 2
c. 1
d. None
97. A toothbrush manufacturer asks your advised on how to maximize his profit by achieving the
best product mix given certain scars resources. You decide that a linear programming technique
should be of help. The following information has been gathered:
The following tableau was developed when a linear programming problem involving maximization of
contribution margin was solved using the simplex method:
Cj 15 25 0 0
Product Mix Quantity X Y S1 S2
0 S1 600 3 6 1 0
0 S2 800 6 4 0 1
Zj 0 0 0 0 0
Cj-Zj 15 25 0 0
98. If Cj is the contribution margin per unit in the products are X and Y, the objective function is
a. CM = 15X + 25Y
b. 15X + 25Y = 600
c. 15X + 25Y = 880
d. 15X + 25Y + S1 + S2 = CM
a. if 600 units of X and 880 units of Y are produced , total contribution margin is equal to 0
b. no unit of X and Y will be produced, the total contribution margin is equal to 0
c. the optimal product mix is 600 units of S1 and 880 units of S2
d. 3 units of X and units of Y must be produced to maximize contribution margin
102. The 4 values of Zj in the variables column (all 0 in the tableau) are the amounts by which
contribution margin would be reduce 1 unit of any of the variables (X, Y, S1, and S2) were added to the
mix. In the given tableau, if one unit of X is produce, the reduction in the contribution margin is
a. P15
b. P25
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c. P40
d. P0
Following is the first tableau develop when a linear programming problem involving maximization of
contribution margin was solved using the simplex method:
Cj 15 25 0 0
Product Mix Quantity X Y S1 S2
0 S1 600 3 6 1 0
0 S2 880 6 4 0 1
Zj 0 0 0 0 0
Cj-Zj 15 25 0 0
103. The values 15 and 25 in the Cj-Zj row indicate that the present product mix (0 of X and 0 of Y) is not
the optimal solution hence can still be improve. The second tableau should therefore be developed.
Using the procedures in the simplex method, the next tableau is developed by identifying the new row,
and that is
a. Row X
b. Row Y
c. Row S1
d. Row S2
a. Row X
b. Row Y
c. Row S1
d. Row S2
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a. 100 ½ 1 1/6 0
b. 150 ¾ 2/3 ¼ 0
c. 3,600 18 36 6 0
d. 2,400 12 24 4 0
106. The row that will not be replaced will have new elements in the new tableau. The elements are
a. 880 6 4 0 1
b. 100 ½ 1 1/6 0
c. 600 3 6 1 0
d. 480 4 0 -2/3 1
a. 0 0 0 0 0
b. 2,500 15 25 0 0
108. If the answer to the items 103 to 107 are summarized and the Cj-Zj values are computed, the new
tableau will be
a.
Cj 15 25 0 0
Product Mix Quantity X Y S1 S2
25 Y 100 1/2 1 1/6 0
0 S2 480 4 0 -2/3 1
Zj 2,500 12.5 25 25/6 0
Cj-Zj 2.5 0 -25/6 0
b.
Cj 15 25 0 0
Product Mix Quantity X Y S1 S2
15 X 100 1/2 1 1/6 0
0 S2 480 4 0 -2/3 1
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c.
Cj 15 25 0 0
Product Mix Quantity X Y S1 S2
25 X 100 1/2 1 1/6 0
0 S1 480 4 0 -2/3 1
Zj 2,500 12.5 25 25/6 0
Cj-Zj 2.5 0 -25/6 0
d.
Cj 15 25 0 0
Product Mix Quantity X Y S1 S2
25 Y 100 1/2 1 1/6 0
0 S1 480 4 0 -2/3 1
Zj 2,500 12.5 25 25/6 0
Cj-Zj 2.5 0 -25/6 0
109. The answer in item no. 108 (2nd tableau) indicates that the product mix is
Product X Product Y
a. 100 480
b. 100 0
c. 0 100
d. 480 100
110. from the product mix in the 2 nd tableau (item no. 108), the total contribution margin is
a. P2,541.67
b. P1,500
c. P0
d. P2,500
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Shown below is a tableau when a linear programming problem involving maximization of contribution
margin was solve using the simplex method:
Cj 15 25 0 0
Product Mix Quantity X Y S1 S2
25 Y 40 0 1 0.25 0
15 X 120 1 0 -1/6 4
Zj 2,800 15 25 3.75 0
Cj-Zj 0 0 -3.75 0
c. the total contribution margin from the present product mix is P2,843.75
c. 2,800 units of Zj
113. From the table, the total contribution margin to be earned optimal product mix is
a. P160
b. P2,843.75
c. P2,800
The following information were taken from the solution to a linear programming problem involving
maximization of contribution margin:
Subject to:
Non-negativity constraints: X ≥ O : Y ≥ O
114. What is the shadow price if one unit is added to the material constraint
a. P6.75
b. P0.625
c. P62.50
P 40
115. Should the company acquire additional unit of material B if the cost per unit is P0.20?
a. yes, because the acquisition cost is less than the shadow price of material B
b. yes, because the acquisition cost is greater than the shadow price of material B
c. yes, because the contribution margin will increase by P0.20 per unit
116. A university has a centralized printing office where the different colleges have their hand outs and
other instructional materials reproduce for distribution to their students. Recently, there have been lonn
delays in printing the materials, because of the increase the number of the job requests from the
different colleges. The university administration is considering decentralizing printing offices to reduce
the backlogs and print the instructional materials on time.
An appropriate technique for minimizing the waiting time for a printing job, as well as the cost of
providing printing services is
a. linear programming
b. regression analysis
c. queuing theory
d. PERT or CPM
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117. Queuing theory minimize the sum of the waiting costs and of the
118. Movi-World operates 10 cinemas in a mall. At present, each cinema has a ticket booth where
customers fall in line to buy ticket. The company is planning to change its present system into a 1-line,
multi-server system. The booths will be installed in just 1 ticketing center and the customer fall in just 1
line. When a book teller is free, the person at the head of the line goes to the teller. In the new system is
implemented, it is expected to
119. Clients arrive at an ATM booth at an average of 10 clients per hour. The ATM ca serve (process
requests: balance inquiry, fund transfer, withdrawals, bills payment, etc.) at an average rate of 12 clients
per hour
a.5
b.10
c.12
d.2
120. What is the average number of clients waiting in line, not being serviced?
a. 5 clients
b. 4 clients
c. 10 clients
d. 12 clients
a. 60 minutes
b. 14.38 minutes
C. 25 minutes
d. 50 minutes
122. It is the mathematical model that shows a constant percentage reduction in the average direct
labor input time required per unit as the accumulate output doubles
a. PERT
b. CPM
C. Queuing theory
d. Learning curve
A particular manufacturing job is subject to an estimated 60% learning curve. The first unit required 20
labor hours to complete.
123. A doubling of production will reduce the cumulative average unit completion by
a. 40%
b. 20%
c. 60%
d. 30%
124. What is the cumulative time per unit after four hours are completed?
a. 60 hours
b. 20 hours
c. 7.20 hours
d. 28.80 hours
a. go hours
b. 39.20 hours
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c. 28.80 hours
d. 7.20 hours
The first unit of a manufacturing job required 59 labor hours to complete. When production was
doubled, the cumulative average time per unit to complete the two units was 40 hours.
a. 40%
b.50%
c.20%
d.80
127. Assuming the learning curve continues, the cumulative (total) time required to produce 8 hours
units is
a. 25.60 hours
b. 320 hours
c. 204.80 hours
d. 40 hours
128. What is the time required to produce the second unit if the first unit required 50 hours to
complete?
a. 40 hours
b. 50 hours
c. 30 hours
d. 80 hours
129. A learning curve of 70% assumes that direct labor costs are reduced by 30% for each doubling of
output. What is the cost of the 8th unit produced as an appropriate percentage of the first unit
produced?
a.34.30%
b.70%
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c.30%
d.0.343%
The cumulative average labor cost per unit for the first batch (of 100 units) produced using a new
process is P200. The cumulative average labor cost after the second batch is P140.
a.30%
b.70%
c.140%
d.200%
131. Assuming that the learning curve obtained in Item #130 continues, the cumulative (total) labor cost
of four batches is
a. P80,000
b. P56,000
c.P39,200
d.P98
132. It is the study of how the outcome of a decision process changes as one or more of the assumptions
used in the process change. Different scenarios are presented, showing the outcome in each scenario as
the assumptions change
a. Sensitivity analysis
b. Learning curve
c. Queuing theory
d. PERT