You, Students Mine;

In due course, I have had you these collections. About 10 multiple choice questions per
chapter (+) from the course Operations Research (Management Science) [Them 5]. I hope
the questions and answers will assist you in your exam preparation! Good to have you.
M.H., Tadesse
Wollo University

THEME 5:
 Theme Five: Management Science and Financial Management
COURSE:
 Operations Research (Management Science)
CONTENTS (CHAPTERS-MINISTRY OF EDUCATION; TEST BLUEPRINT FOR
NATIONAL EXIT EXAMINATION TO BE HELD IN 2015 E.C):
 CHAPTER 1: INTRODUCTION TO OPERATIONS RESEARCH
 CHAPTER 2: LINEAR PROGRAMMING
 CHAPTER 3: TRANSPORTATION AND ASSIGNMENT PROBLEMS
 CHAPTER 4: DECISION THEORY
 CHAPTER 5: NETWORK MODELS
EXTRA QUESTIONS FROM NETWORK MODELS
ANSWERS TO EXTRA QUESTIONS FROM NETWORK MODELS:

C HAPTER 1: I NTRODU CTION TO O PERAT IONS R ESEARCH

1. Which of the following best defines Operations Research (OR)?
A. A field of study that deals with the design and operation of production systems.
B. A discipline that focuses on optimizing business processes and decision-making
using mathematical models
C. A management approach that emphasizes efficient resource allocation
D. A statistical analysis method used to predict future market trends.
2. Which of the following is NOT a key objective of Operations Research?
A. Maximizing profits
B. Minimizing costs
C. Maximizing customer satisfaction

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 D. Maximizing employee motivation
3. Operations Research is useful in managerial decision making because it:
A. Provides intuitive insights into complex business problems.
B. Helps managers make decisions based on personal judgment.
C. Offers a systematic and quantitative approach to decision-making.
D. Eliminates the need for human judgment in decision-making.
4. Which of the following is NOT an OR model used in decision making?
A. Linear programming
B. Simulation
C. Regression analysis
D. Queuing theory
5. Which of the following is an example of a deterministic OR model?
A. Markov chain analysis
B. Decision tree analysis
C. Inventory control model
D. Monte Carlo simulation
6. The application of Operations Research is NOT suitable for:
A. Manufacturing and production industries
B. Service industries
C. Healthcare organizations
D. Small businesses with limited resources
7. Which of the following is NOT a phase of the Operations Research process?
A. Problem identification
B. Model construction
C. Model validation
D. Model termination
8. Sensitivity analysis in Operations Research refers to:
A. Evaluating the impact of changes in model parameters on the optimal solution
B. Analyzing the emotional response of decision-makers to OR recommendations
C. Assessing the financial risks associated with implementing OR solutions.
D. Investigating the ethical implications of OR modeling
9. Which of the following statements best describes the role of Operations Research in
decision-making?
A. Operations Research provides definitive answers to all managerial problems.
B. Operations Research enhances decision-making by providing insights and
recommendations.
C. Operations Research eliminates the need for human judgment in decision-making.

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 D. Operations Research replaces traditional decision-making approaches entirely.
10. Which of the following is NOT a limitation of Operations Research?
A. Inability to handle real-world complexities and uncertainties.
B. Reliance on assumptions that may not always hold true.
C. Limited application to strategic decision-making
D. Need for specialized knowledge and skills to implement OR solutions.

A NSWER K EYS :

1. B 3. C 5. C 7. D 9. B
2. D 4. C 6. D 8. A 10. C

CHAPTER 2: L INEAR P ROGRAMMING

1. Linear programming is a mathematical technique used for:
A. Solving complex algebraic equations
B. Optimizing objective functions subject to constraints
C. Analyzing statistical data patterns
D. Designing efficient network layouts
2. In linear programming, the objective function is:
A. A set of constraints that need to be satisfied.
B. The main goal or target to be maximized or minimized.
C. The range of feasible solutions to a problem
D. A graphical representation of the decision variables
3. Which of the following is NOT a requirement for a problem to be solved using linear
programming?
A. The objective function and constraints must be linear.
B. The problem must have multiple solutions.
C. The decision variables must be continuous.
D. The feasible region must be convex.
4. The feasible region in linear programming represents:
A. The set of all possible solutions that satisfy the constraints.
B. The range of values for the objective function
C. The slope and intercept of the linear equation
D. The optimal solution to the problem
5. Which of the following is an example of a linear programming problem?
A. Minimizing transportation costs in a supply chain network
B. Predicting future stock market prices
C. Analyzing customer preferences in a survey

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 D. Designing a new marketing campaign
6. The graphical method in linear programming is used to:
A. Solve problems with more than two decision variables.
B. Determine the optimal solution for any linear programming problem.
C. Visualize the feasible region and identify the optimal solution.
D. Calculate the dual values for each constraint.
7. In linear programming, the shadow price (dual value) represents:
A. The range of acceptable values for the decision variables
B. The amount by which the objective function coefficient can change without
affecting the optimal solution.
C. The maximum allowable deviation from the right-hand side value of a constraint
D. The opportunity cost of relaxing or tightening a constraint.
8. The simplex method is an iterative algorithm used to:
A. Solve linear programming problems with binary decision variables.
B. Determine the sensitivity of the objective function to changes in the right-hand
side values of constraints.
C. Identify the feasible region and optimal solution graphically.
D. Find the optimal solution for linear programming problems with multiple decision
variables.
9. Which of the following statements is true about degeneracy in linear programming?
A. Degeneracy occurs when there is no feasible solution to the problem.
B. Degeneracy leads to multiple optimal solutions in linear programming.
C. Degeneracy refers to the violation of constraints in the problem.
D. Degeneracy is only applicable to linear programming problems with integer
decision variables.
10. Which of the following is NOT a limitation of linear programming?
A. Linear programming assumes linearity of the objective function and constraints.
B. It cannot handle problems with discrete or integer decision variables.
C. Linear programming requires a high level of mathematical expertise to solve.
D. It is limited to solving problems with a small number of variables and constraints.

A NSWER K EYS :
1. B 3. B 5. A 7. B 9. B
2. B 4. A 6. C 8. D 10. C

CHAPTER 3: T RANSPORT ATION AND A SSIGNMENT P ROBLEMS

1. The transportation problem in Operations Research deals with:
A. Optimally assigning tasks to individuals

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 B. Minimizing transportation costs while satisfying supply and demand constraints
C. Maximizing production capacity in a manufacturing plant
D. Allocating resources to projects based on their priority.
2. The transportation problem can be represented as a:
A. Linear programming model
B. Nonlinear programming model
C. Simulation model
D. Game theory model
3. The transportation problem involves which of the following elements?
A. Sources, destinations, and costs
B. Decision variables, objective function, and constraints
C. Decision trees, probabilities, and payoffs
D. Regression coefficients, independent variables, and dependent variables
4. In the transportation problem, the supply and demand constraints represent:
A. The maximum and minimum values for decision variables
B. The profit margins for different products
C. The availability and requirements of resources at different locations
D. The coefficients of the objective function
5. The initial feasible solution in the transportation problem can be obtained using
which method?
A. North-West Corner method
B. Simplex method
C. Monte Carlo simulation
D. Sensitivity analysis
6. The stepping-stone method is used to:
A. Determine the optimal solution in the transportation problem.
B. Identify the critical path in project management.
C. Calculate the dual values for each constraint.
D. Test the robustness of the solution to changes in the objective function coefficients.
7. In the assignment problem, the objective is to:
A. Minimize total transportation costs.
B. Maximize the production capacity of a plant.
C. Optimally assign individuals to tasks with minimum cost or maximum profit
D. Allocate resources to projects based on priority.
8. The Hungarian method is an algorithm used to solve:
A. The transportation problem
B. The assignment problem

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 C. The critical path method problem
D. The waiting line problem
9. In the assignment problem, if the number of sources is equal to the number of
destinations, it is called:
A. Unbalanced assignment problem
B. Balanced assignment problem
C. Transshipment problem
D. Traveling salesman problem
10. Which of the following is NOT a limitation of the transportation and assignment
problems?
A. They assume linearity of costs and constraints.
B. They cannot handle problems with nonlinear objective functions.
C. They are only applicable to transportation-related industries.
D. They require a known supply and demand for all sources and destinations.

A NSWER K EYS :
1. B 3. A 5. A 7. C 9. B
2. A 4. C 6. A 8. B 10. C

CHAPTER 4: D ECISION T HEORY

1. Decision theory is concerned with:
A. Making decisions based on intuition
B. Making decisions based on historical data
C. Making decisions under uncertainty and risk
D. Making decisions without considering the consequences
2. The maximin criterion in decision theory is used when:
A. The decision-maker is risk-neutral.
B. The decision-maker is risk-averse.
C. The decision-maker is risk-seeking.
D. The decision-maker is risk-ignorant.
3. The expected monetary value (EMV) criterion is based on:
A. Maximizing the minimum possible outcome
B. Maximizing the expected outcome
C. Minimizing the maximum possible outcome
D. Minimizing the expected outcome
4. Sensitivity analysis in decision theory is used to:
A. Determine the best decision criterion to use.
B. Evaluate the effect of changing input parameters on the optimal decision.

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 C. Identify the possible outcomes of a decision.
D. Calculate the expected value of a decision.
5. The decision tree is a graphical representation of:
A. Uncertain events and their probabilities
B. Historical data for decision-making
C. Sensitivity analysis results
D. Expected monetary values.
6. The objective of decision theory is to:
A. Eliminate uncertainty in decision-making.
B. Minimize the decision-making process.
C. Maximize the decision-maker's satisfaction or utility.
D. Ensure a deterministic outcome for every decision.
7. In decision theory, the regret is defined as:
A. The difference between the expected payoff and the payoff under each state of
nature
B. The difference between the best and worst outcomes
C. The probability of each state of nature occurring
D. The cost associated with each decision alternative.
8. The Hurwicz criterion in decision theory involves a coefficient of optimism, denoted
by:
A. α
B. β
C. γ
D. δ
9. The minimax regret criterion is used when:
A. The probabilities of the states of nature are known.
B. The decision-maker is risk-averse.
C. The decision-maker is risk-seeking.
D. The decision-maker is risk-neutral.
10. The concept of dominance in decision theory refers to:
A. Eliminating decision alternatives with lower expected payoffs
B. Selecting the alternative with the highest expected payoff
C. Ignoring the probabilities of the states of nature
D. Maximizing the coefficient of optimism

A NSWER K EYS :
1. C 3. B 5. A 7. A 9. B
2. B 4. B 6. C 8. A 10. A

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 C HAPTER 5: N ETWORK M ODELS
1. In network models, which of the following represents the nodes?
A. Paths
B. Arcs
C. Vertices
D. Flows
2. Which of the following is NOT a type of network model?
A. Transportation model
B. Assignment model
C. Linear programming model
D. Shortest path model
3. The maximum amount of flow that can be sent from the source to the sink in a
network is known as:
A. Minimum cut
B. Maximum flow
C. Critical path
D. Spanning tree
4. In a transportation network model, the supply at each source and the demand at
each destination must satisfy which of the following conditions?
A. Supply = Demand
B. Supply > Demand
C. Supply < Demand
D. Supply ≤ Demand
5. Which of the following algorithms is commonly used to find the shortest path in a
network?
A. Dijkstra's algorithm
B. Ford-Fulkerson algorithm
C. Simplex algorithm
D. Hungarian algorithm
6. The objective of the assignment model is to:
A. Minimize transportation costs.
B. Maximize network flow.
C. Assign tasks to resources optimally.
D. Find the shortest path in the network.
7. In a network model, arcs represent:
A. Decision variables

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 B. Paths or routes
C. Constraints
D. Decision outcomes
8. The minimum cost flow problem in network models is an example of:
A. Integer programming
B. Nonlinear programming
C. Dynamic programming
D. Network optimization
9. Which of the following is a property of a spanning tree in a network?
A. It contains all nodes of the network.
B. It has the shortest path between any two nodes.
C. It has the maximum flow between any two nodes.
D. It has the minimum cost of transportation.
10. The transportation problem in network models can be solved using which
technique?
A. Simplex method
B. Genetic algorithm
C. Monte Carlo simulation
D. Stepping-stone method
A NSWER K EYS :
1. C 3. B 5. A 7. B 9. A
2. C 4. A 6. C 8. D 10. A



E XTRA QUESTIONS FROM NETWORK MODELS:

1. Network models in Operations Research are used to represent:
A. Physical networks like transportation or communication systems
B. Social networks on social media platforms
C. Financial networks in banking institutions
D. All the above
2. In a network model, a node represents:
A. The starting point of a journey
B. An intersection or decision point
C. The endpoint of a journey
D. The flow of goods or information

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 3. The shortest path problem in network models is concerned with finding:
A. The path with the least number of nodes
B. The path with the lowest cost or distance
C. The path with the highest capacity
D. The path with the maximum flow
4. The maximum flow problem in network models is concerned with finding:
A. The path with the least number of nodes
B. The path with the lowest cost or distance
C. The path with the highest capacity
D. The path with the maximum flow
5. The minimum spanning tree problem in network models is concerned with finding:
A. The path with the least number of nodes
B. The path with the lowest cost or distance
C. The path with the highest capacity
D. The path with the maximum flow
6. The traveling salesman problem (TSP) in network models involves finding:
A. The shortest path between two nodes
B. The path with the lowest cost or distance that visits each node exactly once.
C. The path with the highest capacity
D. The path with the maximum flow
7. The critical path method (CPM) in network models is used for:
A. Finding the shortest path in a network
B. Determining the optimal assignment of resources
C. Managing project schedules and identifying the critical activities
D. Maximizing the flow in a network
8. In a project network diagram, a dummy activity is used to:
A. Represent a task with no duration.
B. Represent a task that is not essential for the project.
C. Represent a task that requires additional resources.
D. Represent a task that has a variable duration.
9. The goal of network optimization in Operations Research is to:
A. Minimize the number of nodes in the network.
B. Maximize the number of edges in the network.
C. Minimize or maximize an objective function while satisfying constraints.
D. Equalize the flow in all paths of the network.
10. The critical path in a project network represents:
A. The shortest path from the starting node to the ending node

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 B. The path with the highest capacity
C. The path with the lowest cost or distance
D. The longest sequence of dependent activities that determines the project duration.
11. The float or slack time of an activity in a network model is:
A. The difference between its earliest start time and latest start time
B. The difference between its earliest finish time and latest finish time
C. The difference between its earliest start time and earliest finish time
D. The difference between its latest start time and latest finish time
12. The objective of project crashing in network models is to:
A. Extend the project duration.
B. Reduce the project duration.
C. Increase the project cost.
D. Minimize the number of critical activities.
13. In a network model, a dummy activity is used to:
A. Represent a decision point.
B. Indicate a delay in the project schedule.
C. Connect two consecutive activities with no time or resource requirement.
D. Represent a critical activity.
14. The transportation problem is an example of a:
A. Shortest path problem
B. Maximum flow problem
C. Assignment problem
D. Linear programming problem
15. The minimum spanning tree problem is concerned with:
A. Finding the shortest path between two nodes
B. Finding the longest path between two nodes
C. Finding the most efficient allocation of resources
D. Finding the tree that connects all nodes with minimum total cost.
16. In a network model, the objective of the minimum-cost flow problem is to:
A. Maximize the total flow in the network.
B. Minimize the total flow in the network.
C. Minimize the cost of sending flow from sources to destinations.
D. Maximize the cost of sending flow from sources to destinations.

ANSWERS TO E X TRA QUESTIONS FROM NETWORK MODELS:

A) P HYSI CAL NETWORKS LI KE TRAN SPORT ATION OR C OMMUNICATION SYS TEMS

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B) A N INTERSECTION OR D ECISION POINT
B) T HE PATH WITH THE LOWEST COST OR DIST ANCE
D ) T HE PATH WITH THE MAXIMUM FLOW
B ) T HE PATH WITH THE LOWEST COST OR DIST ANCE
B ) T HE PATH WITH THE LOWEST COST OR DIST ANCE THAT VISITS EA CH NODE EXACTLY ONCE
C ) M ANAGING PROJECT SC HEDULES AND IDENTIFYING THE CRITICAL ACT IVITIES
A ) R EPRESENT A TAS K WIT H NO DURATION
C ) M INIMIZE OR MAXIMI ZE AN OBJECTIVE FUNCTION WHILE SATISFYING CONSTRAINTS
D ) T HE LONGEST SEQUE NCE OF DEPENDENT ACT IVITIES THAT DETERMINES THE PROJECT
DURATION
A) T HE DIFFERENCE BETWEEN ITS EARLIEST START TIM E AND LATEST START TIME
B ) R EDUCE THE PROJECT D URATI ON
C ) C ONNECT TWO C ONSECUTIVE ACTI VITIES WITH NO TIME OR RESOURCE REQUI REMENT
C ) A SSIGNMENT PROBLEM
D ) F INDING THE TREE THAT CONNECTS ALL N ODES WI TH MINIMUM TOTAL COST
C ) M INIMIZE THE COST OF SENDING FLOW FROM SOU RCES TO DESTINATI ONS



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