1.A beverage stand can sell either soft drinks or coffee on any given day.

If the stand sells soft

drinks and the weather is hot, it will make P 2,500; if the weather is cold, the profit will be P
1,000. If the stand sells coffee and the weather is hot, it will make P 1,900; if the weather is
cold, the profit will be P 2,000. The probability of cold weather on a given day at this time is
60%. Considering only the information given, if the probability of hot weather forecast is 50%,
then how much would the vendor be willing to pay for the forecast?

Answer: 300

2. A particular manufacturing job is subject to an estimated 90% learning curve. The first unit
required 50 labor hours to complete. What is the cumulative average time per unit after four
units are completed?

Answer: 40.5 hours

3.Lemon Company manufactured the first batch of product in 10 hours. The second batch took
additional 6 hours. What percentage learning curve occurred? (whole number)

answer: 80%

4.A store sells four products, F, O, U and R. The store manager has made random number
assignments as follows:
Product Assignment
E 0-1
0 2-6
U7-8
R9
What is the probability that a customer will select Product F?

Answer: 20%

A company is selling a particular product which was sold for P 1.00 each and the cost per unit
was P 0.30. The frequency distribution of the demand of the product is:
Unit sales volume Probability
2,000 0.10
3,000 0.15
4,000 0.20
5,000 0.35
6,000 0.20
What is the estimated demand for this product using an expected value approach?
5,000
4,000
6,000
4,400

6. A company is selling a particular product which was sold for P 1.00 each and the cost per unit
was P 0.30. The frequency distribution of the demand of the product is:
Unit sales volume Probability
2,000 0.10
3,000 0.15
4,000 0.20
5,000 0.35
6,000 0.20
What is the estimated demand for this product using the deterministic value approach?

4,000
6,000
4,400
5,000

7. A company is selling a particular product which was sold for P 1.00 each and the cost per unit
was P 0.30. The frequency distribution of the demand of the product is:
Unit sales volume Probability
2.000 0.10
3,000 0.15
4.000 0.20
5,000 0.35
6.000 0 20
What is the conditional profit of having 4,000 units available but only selling 3,000 units?

1,800
4,000
2,100
2,800

8. A wine maker must decide whether to harvest grapes now or in four weeks. Harvesting now
will vield 100,000 bottles of wine, netting P 2 per bottle. If the wine maker waits for four weeks
and weather turns cold (probability of 20%), the yield will be cut in half but net P 3 per bottle. If
the weather does not turn cold, the yield will depend on rain. With rain (probability: 50%), a full
yield netting P 4 per bottle will result. Without rain, there will still be a full 100,000 bottle vield,
but the net amount will be P 3 per bottle only. What is the optimal expected value?
350,000
310,000
200,000
400,000

9. A construction contractor has been invited to submit a bid on a large and complicated
construction project. The preparation of the bid proposal will cost about P 20,000.
Management feels that if the company bids low enough to result in a net profit P 50,000, there
would be a 60% chance of getting the job. If the company bids high enough to result in a P
100,000 net profit, the chance of getting the contract would be only 20%. What should the
company do?

Bid low, enough to allow for P 50,000 profit since the expected value of payoff is P
22,000
Bid high, enough to allow for a P 100,000 profit since the expected value of payoff is
P 4,000
Make no bid
Big high, enough to allow for a P 100,000 profit since the expected value of payoff is
P 20,000

10. If a cost function behaves that the average costs per unit of output decline systematically as
cumulative production doubles, the cost function is referred to as

linear cost curve

growth curve
parabolic curve
learning curve