DSCI 3870.

001: Management Science

Exam # 2 Version A
November 4, 2010
Time allotted: 75 minutes
Name:

SID#:

Please read this carefully

The questions, which you attempt today, consist of True/False and multiple-choice
questions worth 133 points total. Some of these questions are based on descriptive
cases. There are a total of 32 questions. Of these, 30 questions cover the 133
points and any 2 questions can be considered as embedded bonus questions
which will be taken into account when your test is graded.
Please answer all the questions (1 to 32) on the scantron sheet provided in the order
that they appear. After you are done, please turn in the scantron and this question
booklet.
Please note that you have to enter your name and Student ID Number (SID#) in the
above area and on the scantron. Failure to do so will result in a grade of zero .
This is an open book exam. As mentioned in the syllabus, you are not allowed to use a
programmable calculator and/or laptop computer. Any other type of calculator is allowed.
Besides the textbook, you are allowed to use only those notes, which have been handed out
in class, and notes, which you have recorded during, class sessions. Be sure to allocate you
time wisely between the multiple choice and T/F questions.
Acronyms such as LHS (left-hand side), RHS (right-hand side) etc. have been used
liberally. If you are unsure about an acronym, please ask Dr. Kulkarni/the invigilator
immediately.
Best of luck!!

1.

If Pij = the production of product i in period j, then to indicate that the limit on production
of the companys three products in period 2 is 400,
a.
P21 + P22 + P23 < 400
b.
P12 + P22 + P32 < 400
c.
P32 < 400
d.
P23 < 400

2.

In class we discussed a visually appealing network (i.e. node-arc) representation of

which type of model?
a.
Portfolio Selection (Finance)
b.
Media Selection (Marketing)
c.
Gasoline Blending
d.
Break-Even Analysis

3.

If a real-world problem is correctly formulated, it is not possible to have alternative

optimal solutions.
a. True
b. False

4.

If a decision variable is at zero in the optimal solution, its reduced cost is________.
(assume that non-negativity constraints are part of the formulation)
a. what its objective function coefficient would need to be before the variable could
become positive at optimality.
b. the amount its objective function coefficient would need to improve before the
variable could become positive at optimality.
c. zero.
d. infinity

5.

A constraint with a positive slack value

a.
will have a positive dual price.
b.
will have a negative dual price.
c.
will have a dual price of zero.
d.
has no restrictions for its dual price.

6.

Consider a partial output from a problem which has been solved to optimality.

Name
Assembly
Time

Final
Value

Shadow
Price

Constraint
R.H. Side

300

2.5

300

Allowable
Increase

Allowable
Decrease

120

60

What will happen if the right-hand-side for the Assembly Time constraint increases to
450?
a.
Nothing. The values of the decision variables, the dual prices, and the objective
function will all remain the same.
b.
The value of the objective function will change, but the values of the decision
variables and the dual prices will remain the same.
c.
The same decision variables will be positive, but their values, the objective
function value, and the dual prices will change.
d.
The problem will need to be resolved to find the new optimal solution and dual
price.
7.

8.

Sensitivity analysis information in computer output is based on the assumption of

a.
one coefficient change.
b.
two coefficient change.
c.
no coefficient change.
d.
all coefficients change.
When the right-hand sides of two constraints are each increased simultaneously by one
unit, the objective function value will be adjusted by the sum of the constraints dual
prices.
a. True
b. False

The next question is related to the formulation and graphical solution given below:
Max. 2x1 + 2x2
s.t.

4x1 + 1x2 400 - (A)

4x1 + 3x2 500 - (B)
1x1 + 2.5x2 300 - (C)
x1 , x2 0

x2
147
140
133
126
119
112
105
98
91
84
77
70
63
56
49
42
35
28
21
14
7
0

C: 1.0 x1 + 2.5 x2 = 300.0

Payoff: 2.0 x1 + 2.0 x2 = 300.0

B: 4.0 x1 + 3.0 x2 = 500.0

A: 4.0 x1 + 1.0 x2 = 400.0

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

85

90

95

100

Optimal Decisions(x1,x2): (50.0, 100.0)

A: 4.0x1 + 1.0x2 <= 400.0
B: 4.0x1 + 3.0x2 <= 500.0
C: 1.0x1 + 2.5x2 <= 300.0

9. Over what range can the coefficient (c2) of x2 vary before the current solution is no longer
optimal?
a. 1 c2 2.5
b. 1.5 c2 5
c. 0.8 c2 2.67
d. 0.5 c2 2.5

The next four questions are based on the following case:

Futurama Kitchen Appliances Ltd (FKA) produces trendy microwaves. Two of its microwave
models are the market leaders. FKA Genius is one of the models and is sold for a price of $ 150
and FKA Miracle is sold for a price of $120. Producing FKA Genius requires 2 standard heating
coils and 1 IC board and producing FKA Miracle requires 2 heavy duty heating coils and 1 IC
board. There are presently 76 standard heating coils and 70 heavy duty heating coils available.
There are 60 IC boards available. Variable definition for the linear programming problem, the
feasible region and the sensitivity analysis are provided below. You are required to answer the
questions which follow using this information.
Let, G = number of Genius models produced
M = number of Miracle models produced

x1

Hv. Dty. Ht. Coil: 0.0 G + 2.0 M = 70.0

M
35
34
33
32
31
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0

Payoff: 150.0 G + 120.0 M = 8340.0

IC Board: 1.0 G + 1.0 M = 60.0

St. Ht. Coil: 2.0 G + 0.0 M = 76.0

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38

Optimal Decisions(G,M): (38.0, 22.0)

St. Ht. Coil: 2.0G + 0.0M <= 76.0
Hv. Dty. Ht. Coil: 0.0G + 2.0M <= 70.0
IC Board: 1.0G + 1.0M <= 60.0

Futurama Kitchen Appliances

A
B
2
Decision Variables Genius
3
38
Quantity
4
150
Profit Contribution
5
6
Subject To
7
Stand Coil
2
8
Heavy Duty Coil
9
IC Boards
1

Cell
$C$3
$D$3

Cell
$E$7
$E$8
$E$9

C
Miracle
22
120

2
1

<=
<=
<=

RHS
76
70
60

Profit

LHS
76
44
60

Name
Quantity Genius
Quantity Miracle

Final
Value
38
22

Reduced
Cost
0
0

Objective
Coefficient
150
120

Allowable
Increase
1E+30

Allowable
Decrease
30
120

Name
Stand Coil LHS
Heavy Duty Coil LHS
IC Boards LHS

Final
Value
76
44
60

Shadow
Price
15

Constraint
R.H. Side
76
70
60

Allowable
Increase

Allowable
Decrease
26
26
22

1E+30
13

10.

What is the allowable increase for the RHS value of the constraint Standard
Coil?
a. 26
b. 22
c. 44
d. 13
e.

11. In the above sensitivity analysis, what is the allowable increase for the Miracle
model objective coefficient?
a. 30
b. 120
c. 0
d. 50
e.
12. What is the shadow (dual) price for the IC board constraint in the above sensitivity
analysis?
a. 0
b. 61
c. 150
d. 100
e. 120

13. What is the shadow (dual) price for the Heavy Duty Coil constraint in the above
sensitivity analysis?
a. 61
b. 150
c. 100
d. 120
e. 0

The next four questions refer to the following case:

The Denton County Sheriffs Department schedules some police officers for 8-hour shifts. The
beginning times for the shifts are 2:00 am, 6:00 am, 10:00 am, 2:00 pm, 6:00 pm and 10:00 pm.
An officer beginning a shift at one of these times works for the next 8 hours and he/she is paid
$240 for the entire shift if beginning the shift anytime from midnight to noon or $300 for the
entire shift if beginning the shift anytime from noon to midnight. During normal weekday
operations, the number of part-time reserve officers needed varies depending on the time of the
day. The department staffing guidelines require the following minimum number of part-time
reserve officers on duty (see the table below). The Denton County Sheriffs Department would
6

like to formulate a linear program and determine the least expensive way that part-time reserve
police officers could be scheduled to begin the 8-hour shifts at each of the six times (2:00 am,
6:00 am, 10:00 am, 2:00 pm, 6:00 pm and 10:00 pm). Let X1= the number of officers beginning
work at 2:00 am, X2= the number of officers beginning work at 6:00 am, and so on.
Time of Day
2:00 am 6:00 am
6:00 am 10:00 am
10:00 am 2:00 pm
2:00 pm 6:00 pm
6:00 pm 10:00 pm
10:00 pm 2:00 am

Minimum Officers on Duty

7
8
6
9
6
7

14.

An appropriate objective function would be:

a. Min: 240X1 + 240X2 + 240X3 + 300X4 + 300X5 + 300X6
b. Max: 7240X1 + 8240X2 + 6240X3 + 9300X4 + 6300X5 + 7300X6
c. Min: X1 + X2 + X3 + ..+ X22 + X23 + X24
d. Min: 7X1 + 8X2 + 6X3 + 9X4 + 6X5 + 7X6
e. Min: X1 + X2 + X3 + X4 + X5 + X6

15.

The constraint for 2:00 pm 6:00 pm is given as:

a. X1 + X2 9
b. X2 + X3 9
c. X3 +X4 9
d. X3 +X4 9
e. X4 +X5 9

16.

The constraint X4 + X5 6 is for:

a. Noon 4:00 pm
b. 10:00 am 2:00 pm
c. 6:00 pm 10:00 pm
d. Midnight 4:00 am
e. 2:00 am 6:00 am

17.

Scheduling exactly 7,8,6,9,6,7 officers to begin work respectively at 2:00 am, 6:00 am,
10:00 am, 2:00 pm, 6:00 pm and 10:00 pm is a feasible solution to the problem.
a. True
b. False

The next three questions are based on the following case:

The Meredith Ribbon Company produces paper and fabric decorative ribbon which it sells to
paper products companies and craft stores. The demand for ribbon is seasonal. Information about
projected demand and production for a particular type of ribbon is given.

Quarter 1
Quarter 2
Quarter 3
Quarter 4

Demand
(yards)
10,000
18,000
16,000
30,000

Production Cost Per

Yard
0.03
0.04
0.06
0.08

Production Capacity
(yards)
30,000
20,000
20,000
15,000

An inventory holding cost of $0.005 is levied on every yard of ribbon carried over from one
quarter to the next. The objective is to minimize total cost, the sum of production and inventory
holding cost. Define the decision variables as follows:.
Let Pi = the production in yards in quarter i
Let Si = the ending surplus (inventory) in quarter i
18. What is the appropriate objective function?
a. Max. 0.03P1 + 0.04P2 + 0.06P3 + 0.08P4 +0.005(S1 + S2 + S3 + S4 )
b. Min. P1 + P2 + P3 + P4 + S1 + S2 + S3 + S4
c. Min. 0.03P1 + 0.04P2 + 0.06P3 + 0.08P4 + 0.005(S1 + S2 + S3 + S4 )
d. Max. P1 + P2 + P3 + P4 + S1 + S2 + S3 + S4
e. None of the above
19. What does the constraint P3 20000 capture?
a. Demand capacity in period 3
b. Inventory capacity in period 3
c. Production capacity in period 3
d. Objective function
e. None of the above
20. The constraint that balances inventory, production, and demand in period 2 may be written
as:
a. S1 P2 S2 = 18000
b. S1 + P2 S2 = 18000
c. S1 P2 S2 = 18000
d. S1 + P2 S2 + 18000 = 0
e. None of the above

The next five questions are based on the following case

FarmFresh Foods manufactures a snack mix called TrailTime by blending three ingredients: a
dried fruit mixture, a nut mixture, and a cereal mixture. Information about the three ingredients
(per ounce) is shown below.
Ingredient

Cost

Volume

Dried Fruit
Nut Mix
Cereal Mix

0.35
0.45
0.25

1/4 cup
3/8 cup
1/2 cup

Fat
Grams
4
5
2

Calories
350
200
100

The company needs to develop a linear programming model whose solution would tell
them how many ounces of each mix to put into the TrailTime blend. TrailTime is packaged in
boxes that will hold between two and four cups. The blend should contain no more than 1200
calories and no more than 25 grams of fat. Dried fruit must be at most 20% of the volume of the
mixture, and nuts must be at least 20% of the weight of the mixture. Develop a model that meets
these restrictions and minimizes the cost of the blend.
Let us define the variables as follows,
D = ounces of dried fruit mix in the blend
N = ounces of nut mix in the blend
C = ounces of cereal mix in the blend
21. The objective function is given as:
a. Max. 0.25D + 0.375N + 0.50C
b. Max. 0.35D + 0.45N + 0.25C
c. Min. 0.35D + 0.45N + 0.25C
d. Min. 0.25D + 0.375N + 0.50C
22. The constraint on calories is given as:
a. 350D + 200N + 100C < 1200
b. 4D + 5N + 2C < 1200
c. 350D + 200N + 100C > 1200
d. 100D + 200N + 350C < 1200
23. The constraint 0.25D + 0.375N + 0.50 C < 4 represents ________.
a. the constraint on fat.
b. the constraint on minimum volume that has to be packaged.
c. the constraint on dried fruit volume
d. the constraint on maximum volume that can be packaged.

24. The restriction on nuts may be represented as:

a. -0.2D - 0.8N +0.2C > 0
b. -0.2D + 0.8N + 0.2C < 0
c. -0.2D + 0.8N - 0.2C > 0
d. -0.2D + 0.8N - 0.2C < 0
25. The constraint on dried fruit volume may be represented as:
a. 0.95D - 0.075N - 0.1 C < 0
b. 0.2D - 0.075N - 0.1 C < 0
c. 0.2D - 0.2N - 0.2 C > 0
d. 0.3D - 0.075N - 0.1 C < 0
26. In the game that we played in class, I gave you the option of buying at most two units of any
one resource after having built your toys. Most teams bought ________.
a. Nothing
b. 1 green diamond
c. 2 yellow triangles
d. 1 orange square
e. 2 blue triangles
The next five questions are based on the following case:
Round Tree Manor is a hotel that provides two types of rooms with three rental classes:
SuperSaver, Deluxe, and Business. The profit per night for each type of room and rental class is
as follows:
Rental Class
SuperSaver Deluxe Business
Room Type I
$ 30
$ 35

Type II
$ 20
$ 30
$ 40
Type I rooms do not have Internet access and are not available for the Business rental class.
Round Trees management makes a forecast of the demand by rental class for each night in the
future. A linear programming model developed to maximize profit is used to determine how
many reservations to accept for each rental class. The demand forecast for a particular night is
130 rentals in the SuperSaver class, 60 rentals in the Deluxe class, and 50 rentals in the Business
class. Round Tree has 100 Type I rooms and 120 Type II rooms.
Let, S1 = number of reservations allocated to SuperSaver - Type I
S2 = number of reservations allocated to SuperSaver - Type II
D1 = number of reservations allocated to Deluxe - Type I
D2 = number of reservations allocated to Deluxe - Type II
B2 = number of reservations allocated to Business - Type II

10

The algebraic LP formulation is given as:

Max.
30 S1 + 35 D1 + 20 S2 + 30 D2 + 40 B2
Subject to:
S1 + S2 130
D1 + D2 60
B2 50
S1+ D1 100
S2 + D2 + B2 120
S1,D1,S2,D2,B2 > 0
The formulation in Excel with the solution and the sensitivity report are shown below. Please
answer the questions that follow these outputs.

12
13
14
15
16
17

SuperSaver
Deluxe
Business
TypeI
TypeII
UnitProfitperAllocation

D E F G
H
RoomAllocations

S1 S2 D1 D2 B2 Allocated/Used
1 1 0 0 0
110
0 0 1 1 0
60
0 0 0 0 1
50
1 0 1 0 0
100
0 1 0 1 1
120
30 20 35 30 40

I
J

Forecast/Available
<=
130
<=
60
<=
50
<=
100
<=
120

MicrosoftExcel12.0SensitivityReport
AdjustableCells

Cell
Name
$C$5 S1
$D$5 S2
$E$5 D1
$F$5 D2
$G$5 B2

Final Reduced Objective Allowable Allowable

Value
Cost
Coefficient Increase Decrease
100
0
30
1E+30
5
10
0
20
5
20
0
5
35
5
1E+30
60
0
30
1E+30
5
50
0
40
1E+30
20

Constraints

Cell
Name
$H$12 SuperSaver
$H$13 Deluxe
$H$14 Business
$H$15 TypeI
$H$16 TypeII

Final
Value
110
60
50
100
120

Shadow Constraint Allowable Allowable

Price
R.H.Side Increase Decrease
0
130
1E+30
20
10
60
10
20
20
50
10
20
30
100
20
100
20
120
20
10

11

27.

How many reservations should be accepted in each rental class and what is the resulting
profit?
a. Round Tree should accept 110 Type I reservations and 120 Type II reservations for a
total profit of $7000
b. Round Tree should accept 110 SuperSaver reservations, 60 Deluxe reservations and
50 Business reservations for a total profit of $7000
c. Round Tree should accept 130 SuperSaver reservations, 60 Deluxe reservations and
50 Business reservations for a total profit of $7500
d. None of the above.

28.

Will Round Tree be fully booked based upon their optimal allocation plan?
a. Yes
b. No

29.

Management is considering offering a free breakfast to anyone upgrading from a

SuperSaver reservation to Deluxe class. What is the maximum cost of preparing this
breakfast that management can tolerate, while giving it away for free?
a. $15
b. $10
c. $ 5
d. They cannot give it away for free as they will incur a loss equal to the cost of preparing
the breakfast.

30.

With a little work, an unused office area could be converted to a rental room. If the
conversion cost is the same for both types of rooms, and assuming that management is
willing to incur this cost, would you recommend converting the office to a Type I or a
Type II room and why?
a. Either Type I or Type II room, it does not matter.
b. A Business room as it has most profit potential
c. Type II room because the incremental profit increase over a Type I room is $10
d. Type I room because the incremental profit increase over a Type II room is $10

31.

A Marketing consultant believes that at least one Type I room should be allocated to the
Deluxe rental class. Should management implement this advice? Why or why not?
a. Yes, they should, as the optimal profit will increase by $35
b. Yes, they should, as the optimal profit will increase by $30
c. No, they should not, as the optimal profit will decrease by $5
d. It does not matter either way as the optimal profit will stay unaffected.

32.

In a real world example that I showed in class, a million dollar prize competition was
instituted by which company?
a. Google
b. Microsoft
c. P&G
d. Facebook
e. Netflix
----------------------------------------------- END of EXAM ---------------------------------------------12