Quantitative Analysis for Management, 11e (Render) Chapter 1 Introduction to Quantitative Analysis

1) Interviews, statistical sampling, and company reports provide input data for quantitative analysis models. Answer: TRU !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# ") In t-e early 1.//s, #enry 0ord pioneered t-e principles of t-e scientific approac- to management. Answer: 0A') !iff: " Topic: 1#AT I) $UA%TITATI& A%A'()I)2 3) 4anagers do not need to 5e familiar wit- t-e limitations, assumptions, and6or specific applica5ility of t-e quantitative analysis tec-nique to use it for accurate decision ma7ing. Answer: 0A') !iff: " Topic: I%TR+!U,TI+% 8) !uring 1orld 1ar II, many new scientific and quantitative tec-niques were developed to assist t-e military, and t-ese developments were so successful t-at many companies started using similar tec-niques in managerial decision ma7ing and planning after t-e war. Answer: TRU !iff: " Topic: 1#AT I) $UA%TITATI& A%A'()I)2 9) 1-en a pro5lem is difficult to quantify, it may 5e necessary to develop unspecific o5:ectives. Answer: 0A') !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# ;) T-e $uantitative Analysis Approac- consists of si< steps. Answer: 0A') !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# =) A mat-ematical model s-ows t-e relations-ip 5etween quantifia5le and non-quantifia5le information. Answer: 0A') !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,#

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?) !ecision varia5les may also 5e called parameters. Answer: 0A') !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# .) 4odel varia5les can 5e controlla5le or uncontrolla5le. Answer: TRU !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 1/) A series of steps or procedures t-at are repeated is 7nown as an algorit-m. Answer: TRU !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 11) A model is a representation of a situation. Answer: TRU !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 1") A parameter is a measura5le quantity t-at may vary or is su5:ect to c-ange. Answer: 0A') !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 13) Trying various approac-es and pic7ing t-e one resulting in t-e 5est decision is called incomplete enumeration. Answer: 0A') !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 18) All pro5lems can 5e solved 5y considering only t-e quantitative issues. Answer: 0A') !iff: 1 Topic: 1#AT I) $UA%TITATI& A%A'()I)2 19) A profit equation is an e<ample of a sc-ematic model. Answer: 0A') !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 1;) Testing t-e data and model s-ould 5e done 5efore t-e results -ave 5een analy@ed. Answer: TRU !iff: 1 Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 1=) )ensitivity analysis -elps us estimate t-e effect of 7nown and un7nown errors in our model. Answer: TRU !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 1?) 4odels can -elp us analy@e a pro5lem and sell a decision to t-ose w-o must implement it. Answer: TRU !iff: 1 Topic: #+1 T+ ! & '+* A $UA%TITATI& A%A'()I) 4+! ' AA,)A: ,ommunication " ,opyrig-t > "/1" *earson ducation, Inc. pu5lis-ing as *rentice #all

1.) A sensitivity analysis allows a manager to answer t-e Bw-at ifB questions. Answer: TRU !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# "/) +ne pro5lem in using a quantitative model is t-at t-e necessary data may 5e unavaila5le. Answer: TRU !iff: 1 Topic: *+))IA' *R+A' 4) I% T# $UA%TITATI& A%A'()I) A**R+A,# "1) 1-ic- of t-e following terms is interc-angea5le wit- quantitative analysis2 A) management science A) economics ,) financial analysis !) statistics ) %one of t-e a5ove Answer: A !iff: 1 Topic: 1#AT I) $UA%TITATI& A%A'()I)2 "") +perations Researc- is 7nown as A) t-e science of numerical analysis. A) t-e science of sensitivity analysis. ,) t-e science of 5etter. !) t-e science of modeling. ) %one of t-e a5ove Answer: , !iff: " Topic: I%TR+!U,TI+%

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"3) 1-o is credited wit- pioneering t-e principles of t-e scientific approac- to management2 A) Adam )mitA) #enri 0ayol ,) Co-n R. 'oc7e !) 0rederic7 1. Taylor ) ,-arles Aa55age Answer: ! !iff: " Topic: 1#AT I) $UA%TITATI& A%A'()I)2 "8) ADn) EEEEEEEE is a representation of reality or a real-life situation. A) o5:ective A) model ,) analysis !) algorit-m ) %one of t-e a5ove Answer: A !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# "9) A measura5le quantity t-at may vary, or is su5:ect to c-ange, and can 5e controlled is 7nown as aDn) A) decision varia5le. A) algorit-m. ,) parameter. !) solution. ) %one of t-e a5ove Answer: A !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# ";) A set of logical and mat-ematical operations performed in a specific sequence is called aDn) A) complete enumeration. A) diagnostic analysis. ,) algorit-m. !) o5:ective. ) %one of t-e a5ove Answer: , !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,#

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"=) T-e a5ility to e<amine t-e varia5ility of a solution due to c-anges in t-e formulation of a pro5lem is an important part of t-e analysis of t-e results. T-is type of analysis is called EEEEEEEE analysis. A) sensitivity A) implicit ,) normal !) scale ) o5:ective Answer: A !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# "?) 1-ic- of t-e following is not one of t-e steps in t-e quantitative analysis approac-2 A) !efining t-e *ro5lem A) !eveloping a )olution ,) +5serving a -ypot-esis !) Testing a )olution ) Implementing t-e Results Answer: , !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# ".) T-e condition of improper data yielding misleading results is referred to as A) gar5age in, gar5age out. A) 5rea7-even point. ,) uncontrolla5le varia5le. !) postoptimality. ) %one of t-e a5ove Answer: A !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 3/) <pressing profits t-roug- t-e relations-ip among unit price, fi<ed costs, and varia5le costs is an e<ample of A) a sensitivity analysis model. A) a quantitative analysis model. ,) a postoptimality relations-ip. !) a parameter specification model. ) %one of t-e a5ove Answer: A !iff: 1 Topic: #+1 T+ ! & '+* A $UA%TITATI& A%A'()I) 4+! '

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31) T-e widespread applica5ility of operations researc- met-ods to 5usiness followed w-ic- war2 A) T-e U.). ,ivil 1ar A) 1orld 1ar I ,) 1orld 1ar II !) T-e Forean 1ar ) T-e &ietnam 1ar Answer: , !iff: " Topic: 1#AT I) $UA%TITATI& A%A'()I)2 3") 1-ic- of t-e following statementDs) are true regarding t-e advantages of mat-ematical modeling2 A) 4odels accurately represent reality. A) 4odels can -elp decision ma7ers formulate pro5lems. ,) 4odels can save time. !) 4odels may 5e t-e only way to solve some large and comple< pro5lems in a timely manner. ) All of t-e a5ove Answer: !iff: 1 Topic: #+1 T+ ! & '+* A $UA%TITATI& A%A'()I) 4+! ' 33) A measura5le quantity t-at is in-erent in t-e pro5lem is called aDn) A) decision varia5le. A) uncontrolla5le varia5le. ,) algorit-m. !) parameter. ) enumeration varia5le. Answer: ! !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 38) Trying various approac-es and pic7ing t-e one t-at results in t-e 5est decision is called A) t-e trial-and-error met-od. A) incomplete enumeration. ,) complete enumeration. !) algorit-mic appro<imation. ) sensitivity analysis. Answer: A !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,#

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39) 4odels t-at do not involve ris7 or c-ance are A) pro5a5ilistic models. A) postoptimality models. ,) deterministic models. !) 4I) models. ) %one of t-e a5ove Answer: , !iff: " Topic: #+1 T+ ! & '+* A $UA%TITATI& A%A'()I) 4+! ' 3;) If input data are accurate to t-ree significant digits, t-en t-e solution results can 5e accurate to -ow many significant digits2 A) one A) two ,) t-ree !) four ) si< Answer: , !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 3=) *ostoptimality analysis is most closely associated witA) collecting input data. A) developing a model. ,) sensitivity analysis. !) writing a computer program. ) %one of t-e a5ove Answer: , !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 3?) T-e 5rea7-even point is an e<ample of a A) postoptimality model. A) quantitative analysis model. ,) sc-ematic model. !) sensitivity analysis model. ) %one of t-e a5ove Answer: A !iff: 1 Topic: #+1 T+ ! & '+* A $UA%TITATI& A%A'()I) 4+! '

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3.) )toc-astic models are synonymous witA) deterministic models A) sc-ematic models. ,) qualitative models. !) conceptual models. ) %one of t-e a5ove Answer: !iff: " Topic: G'+))AR( 8/) A controlla5le varia5le is also called a A) parameter. A) decision varia5le. ,) mat-ematical model. !) measura5le quantity. ) %one of t-e a5ove Answer: A !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 81) valuating all possi5le values of a varia5le in a model is called A) trial and error. A) complete enumeration. ,) an algorit-m. !) varia5li@ation. ) %one of t-e a5ove Answer: A !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 8") 1-at is t-e formula for t-e 5rea7-even point of a simple profit model2 A) 0i<ed ,ost 6 &aria5le ,ost *er Unit A) D)elling *rice *er Unit H&aria5le ,ost *er Unit) 6 0i<ed ,ost ,) 0i<ed ,ost 6 D)elling *rice *er Unit H&aria5le ,ost *er Unit) !) 0i<ed ,ost 6 D&aria5le ,ost *er Unit H )elling *rice *er Unit) ) )elling *rice *er Unit H D0i<ed ,ost 6 &aria5le ,ost *er Unit) Answer: , !iff: " Topic: #+1 T+ ! & '+* A $UA%TITATI& A%A'()I) 4+! ' AA,)A: $uantitative )7ills

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83) T-e 5rea7-even point of a simple profit model represents aDn) A) decision varia5le. A) uncontrolla5le varia5le. ,) parameter. !) constant. ) %one of t-e a5ove Answer: A !iff: 3 Topic: #+1 T+ ! & '+* A $UA%TITATI& A%A'()I) 4+! ' 88) ADn) EEEEEEEE model is one t-at is accurate and correctly represents t-e pro5lem or system under investigation. A) ro5ust A) valid ,) sensitive !) optimal ) feasi5le Answer: A !iff: " Topic: #+1 T+ ! & '+* A $UA%TITATI& A%A'()I) 4+! ' 89) 1-ic- <cel feature is an optimi@ation tec-nique t-at can ma<imi@e or minimi@e a quantity given a set of limitations or constraints2 A) +ptimi@er A) Goal )ee7 ,) Analysis Tool-*a7 !) Algorit-m Auilder ) )olver Answer: !iff: 3 Topic: T# R+' +0 ,+4*UT R) A%! )*R A!)# T 4+! ') I% T# $UA%TITATI& A%A'()I) A**R+A,# AA,)A: Use of IT 8;) 1-ic- <cel feature allows t-e user to specify a target or goal and t-e varia5le t-at is desired to c-ange in order to ac-ieve t-at goal2 A) )olver A) Goal )earc,) Target )earc!) Goal )ee7 ) Target )ee7 Answer: ! !iff: 3 Topic: T# R+' +0 ,+4*UT R) A%! )*R A!)# T 4+! ') I% T# $UA%TITATI& A%A'()I) A**R+A,# AA,)A: Use of IT 8=) All of t-e following are real computer applications t-at perform quantitative analysis e<cept A) )olver in <cel. A) Goal )ee7 in <cel. ,) <cel $4. !) *+4-$4 for 1indows. ) $A for 1indows. Answer: !iff: " Topic: T# R+' +0 ,+4*UT R) A%! )*R A!)# T 4+! ') I% T# $UA%TITATI& A%A'()I) . ,opyrig-t > "/1" *earson ducation, Inc. pu5lis-ing as *rentice #all

A**R+A,# AA,)A: Use of IT 8?) As one attempts to develop a model, w-ic- of t-e following pro5lems mig-t s-e encounter2 A) T-e pro5lem may not fit a te<t5oo7 approac-. A) T-ere will 5e no data availa5le to test t-e model. ,) %ot everyone will understand t-e pro5lem in t-e same way. !) All of t-e a5ove ) %one of t-e a5ove Answer: ! !iff: 1 Topic: *+))IA' *R+A' 4) I% T# $UA%TITATI& A%A'()I) A**R+A,# 8.) 1-ic- of t-e following is a picture, drawing, or c-art of reality2 A) scale model A) p-ysical model ,) mat-ematical model !) sc-ematic model ) a5stract model Answer: ! !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 9/) 1-ic- of t-e following is not considered a possi5le pro5lem in t-e quantitative analysis approac-2 A) validity of t-e data A) lac7 of commitment ,) resistance to c-ange !) su5:ective solutions ) -ard-to-understand mat-ematics Answer: ! !iff: " Topic: *+))IA' *R+A' 4) I% T# $UA%TITATI& A%A'()I) A**R+A,#

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91) $uantitative analysis is EEEEEEEE. Answer: t-e scientific approac- to managerial decision ma7ing !iff: " Topic: 1#AT I) $UA%TITATI& A%A'()I)2 9") Identify t-e steps of t-e quantitative analysis approac-. Answer: D1) !efining t-e *ro5lem, D") !eveloping a 4odel, D3) Acquiring Input !ata, D8) !eveloping a )olution, D9) Testing t-e )olution, D;) Analy@ing t-e Results, and D=) Implementing t-e Results !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# AA,)A: Analytic )7ills 93) A controlla5le varia5le is also called a EEEEEEEE varia5le. Answer: decision !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 98) A picture, drawing, or c-art of reality is a EEEEEEEE model Answer: sc-ematic !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 99) Identify some possi5le pro5lems in t-e quantitative analysis approac-. Answer: Answers will vary 5ut may include: conflicting viewpoints, ignoring t-e impact on ot-er departments, poor assumptions, outdated solutions, difficulty matc-ing t-e te<t5oo7 approac-, trading off model comple<ity wit- ease of understanding, poor input data, -ard-to-understand mat-ematics, and -aving only one answer is limiting. !iff: " Topic: *+))IA' *R+A' 4) I% T# $UA%TITATI& A%A'()I) A**R+A,# 9;) Identify t-ree potential pro5lems wit- people Dtwo wit- management and one wit- t-e quantitative analysts t-emselves) t-at may -inder successful implementation of a quantitative model. Answer: Answers will vary 5ut may include: D1) lac7 of commitment 5y management, D") resistance to c-ange 5y management, and D3) lac7 of commitment 5y quantitative analysts. !iff: " Topic: I4*' 4 %TATI+%I%+T CU)T T# 0I%A' )T *

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9=) In ma7ing a decision, 5ot- EEEEEEEE and quantitative factors must 5e considered. Answer: qualitative !iff: " Topic: 1#AT I) $UA%TITATI& A%A'()I)2 9?) Inaccurate model input data leads to inaccurate model solutions. T-is p-enomenon is commonly referred to as EEEEEEEE. Answer: gar5age in, gar5age out !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# 9.) T-e solution process of EEEEEEEE implies t-at we loo7 at all possi5le solutions. Answer: complete enumeration !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# ;/) +nce we -ave a solution, we s-ould t-en perform EEEEEEEE analysis. Answer: sensitivity or postoptimality !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# ;1) EEEEEEEE models do not involve ris7 or c-ance. Answer: !eterministic !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# ;") EEEEEEEE models are synonymous wit- stoc-astic models. Answer: *ro5a5ilistic !iff: " Topic: T# $UA%TITATI& A%A'()I) A**R+A,# ;3) #ow can an analyst overcome t-e t-reats to successful implementation of a quantitative model2 Answer: Answers will varyJ one solution is for analysts to wor7 wit- users and ta7e t-eir feelings into account instead of telling t-em w-at to do. !iff: " Topic: I4*' 4 %TATI+%I%+T CU)T T# 0I%A' )T *

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