Question;Problem No. 1The construction manager for Acme, Inc. must decide whether to build single-family homes,apartments, or condominiums. She estimates annual profits will vary with the economy, asfollowsProbabilitiesHomesApartmentsCondominiums30%Weak Economy$191,000.$72,000.$23,000.40%Normal Economy$86,000.$164,500.$93,500.REQUIREMENT:1. Select the best strategy under:a. The Maxi-Min decision criterion.b. The Mini-Max Regret decision criterion.c. The Expected Opportunity Loss decision criterion30%Strong Economy$65,000.$82,000.$202,000.Problem No.2Problem No.3Problem No. 4A new shopping mall is considering setting up an information desk staffed by one (1) employee.Based upon information obtained from similar information desks, it is believed that people willarrive at the desk at the rate of fifteen (15) per hour. It takes an average of two (2) minutes toanswer a question. It is assumed that arrivals are poisson-distributed and that answer times arenegative-exponentially-distributed.REQUIREMENT:1. Find the proportion of the time that the employee will be busy.2. Find the average number of people just waiting in line to get some information.3. Find the expected time a person will spend just waiting in line to have his/herquestion(s) answered.Multiple Choice: (select the most correct response)1. In the growth stage of a products life cycle, a typical operations strategy would be:a. Increasing capacity.b. Short production runs.c. Cost minimization.d. Increases in process stability.2. Which statement is true?a. The mission statement precedes analysis of external andinternal factors.b. Market segments are selected prior to development of themission statement.c. Functional strategy is formulated prior to corporate strategy.d. The marketing functional strategy dictates the products andservices that the firm will offer.3. Product innovation rates are a(an):a.b.c.d.A goal-based measure.A corporate goal.A productivity measure.An external factor.4. In decision theory, the three states of nature are:a.b.c.d.Local, regional, and national.Low, medium, and highShort-term, mid-term, and long-term.Certainty, uncertainty, and risk.-2-5. Simple or single-stage decision making models are characterized by:a.b.c.d.e.Event nodes.Decision nodes.Decision arrows.Conditional payoff tables or matrices.Decision chains.6. Under uncertainty, the risk averter decision criterion is:a.b.c.d.LaPlace.Maxi-max.Expected value.Maxi-min.7. When probabilities are assigned to events, the decision maker may use:a.b.c.d.The pessimistic criterion.The equally-likely criterion.The expected opportunity loss criterion.The optimistic criterion.8. An advantage of simulation modeling is:a. It generates an optimal solution to the problem.b. It allows the inclusion of real-world complications.c. It can be used in similar problem applications with only slightmodifications.d. It forces managers to identify every single relevant variable withinThe problem.9. Options in designing simulation models include all except:a.b.c.d.Repeating- versus non-repeating random numbers.Most versus all relevant variables.One versus several random number strings.Time-incrementing versus event-incrementing.10. Which of the following probability distributions cannot be simulated?a. normal.b. poisson.c. uniform.d. all can be simulated.11. The service facility is a combination of:a.b.c.d.Arrival rates and service rates.Servers and customers.Queue length and queue discipline.Channels and phases.12. In queuing problems, the calling population is either:a.b.c.d.Known or unknown.Finite or infinite.Single or multi-phased.Random or scheduled.13. A maintenance shop employing one mechanic and servicing 50 machines would bedescribed as a:a.b.c.d.Single-channel, priority system.Multi-channel, infinite calling population system.Single-channel, finite calling population system.Multi-channel, finite calling population system.14. The likelihood that a decision-maker would ever receive a return equal tothe expected opportunity loss (EOL) when making an actual decision is:a.b.c.d.100%Dependent on the event probabilities.0%Dependent on the number of states of nature.15. Commonly obtained measures of a queuing systems performance include:a. Average time each customer spends in the system, and the probabilitythat the service system will be idle.b. The average queue length, and the maximum time a customer may spendin the queue.c. Maximum queue length, and the probability of a specific number ofcustomers in the system.d. Average queue length, and the probability that the waiting time will exceed a specified period.True or False: (select the one correct response)16. Bayes Theorem provides the justification for employing the expected valuedecision criterion.TRUEFALSE17. Decision trees are solved by starting in the present and working into thefuture.TRUEFALSE18. In a decision tree, a node () represents an event.TRUEFALSE19. Combining randomness and long-term event probabilities results in theduplication of reality in simulation modeling.TRUEFALSE20. Several proposed courses of action may be run simultaneously through asimulation model, so as to save time and expense.TRUEFALSE21. Lambda () is the Greek character used to denote the average service ratein queuing theory.TRUEFALSE22. In a restaurant, the average time spent in the system is the time between acustomers arrival and departure.TRUEFALSE23. The most common queuing models assume a service rate that is normallydistributed.TRUEFALSE24. A simulation is iconic when the relevant variables of the system beingsimulated exhibit chance in their behavior.TRUEFALSE25. Random number intervals are based on cumulative probability distributions.TRUEFALSE26. Results of simulation experiments with large numbers of trials will generallybe better than those with fewer trials.TRUEFALSE27. Given the value of lambda (), a theoretical frequency distribution forsystem arrivals can be established.TRUEFALSE28. In queuing problems, the term reneging refers to the fact that somecustomers switch queues before receiving service.TRUEFALSE29. All queuing systems exhibit first-in, first-out queue discipline.TRUEFALSE30. In queuing theory, the theoretical frequency distribution of system arrivalsmust be statistically identical to the observed distribution of system arrivals.TRUEFALSEPRACTICAL PROBLEMS Multiple Choice (select the one correct response)31. In problem one, the best strategy under the maxi-min decision criterion is:a.b.c.d.Homes, $65,000.00Homes, $86,000.00Apartments, $72,000.00Condos, $23,000.0032. In problem one, the best strategy under the mini-max regret decision criterion isa.b.c.d.Apartments, $119,000.00Apartments, $120,000.00Condos, $71,000.00Condos, $168,000.0033. In problem one, the best strategy under the EOL decision criterion is:a.b.c.d.Apartments, $71,700.00Homes, $72,500.00Apartments, $120,000.00Homes, $137,000.0034. In problem two, the game plan under the maxi-max decision criterion is:a.b.c.d.select the new product line.improve the old product line.select the new product line and conduct thorough development.select the new product line and conduct rapid development.35. In problem two, the game plan under the maxi-min decision criterion is:a.b.c.d.select the new product line.improve the old product line.select the new product line and conduct thorough development.select the new product line and conduct rapid development.36. In problem two, the game plan under the expected value decision criterion is:a.b.c.d.select the new product line.improve the old product line.select the new product line and conduct thorough development.select the new product line and conduct rapid development.37. In problem three, the average daily number of garments held overnight is:a.b.c.d.e.15.7171.4265.7168.57none of the above.38. In problem three, the average maximum drycleaning capacity per day is:a.b.c.d.e.15.7171.4265,7168.57none of the above.39. In problem three, the average daily number of garments actually cleaned is:a.b.c.d.e.15.7171.4265,7168.57none of the above.40. In problem four, the proportion of the time that the employee will be busy is:a.b.c.d.60 %50 %13 %none of the above.41. In problem four, the average number of people just waiting in line to get someinformation is:a.b.c.d.2.000.500.25none of the above.42. In problem four, the expected time that a person will spend just waiting in lineto have his/her question(s) answered is:a.b.c.d.1 minute2 minutes4 minutesnone of the above.
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