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MIDTERM EXAMINATION
I. Multiple Choice: Write the letter of your answer in CAPITAL LETTERS on the space provided before the number. Strictly no
erasures.
___________1. The Kayabangan Company plans to expand its sales force by opening several new branch offices. Kayabangan will
consider opening only two types of branches: 20-person branches (Type A) and 10-person branches (Type B).
Expected initial cash outlays are PHP 1,300,000 for a Type A branch and PHP 670,000 for a Type B branch. Expected
annual cash inflow, net of income taxes, id PHP 92,000 for a Type A branch and PHP 38,000 for a Type B branch.
Kayabangan will hire no more than 200 employees for the new branch offices and will open no more than 20 branch
offices. Linear programming will be used to help decide how many branch offices should be opened. Kayabangan had
PHP 10,400,000 in capital available for the new branch offices.
In a system of equations for a linear programming model, which of the following equations would not represent
constraint?
A. A + B ≤ 20 C. PHP 92,000A + PHP 36,000 B ≤ PHP 128,000
B. 20A + 10B ≤ 200 D. PHP 1,300,000A + PHP 670,000B ≤ PHP 10.4M
___________2. Covid Corporation manufactures Product C and Product A which are processed as follows:
Type D Machine Type B Machine
Product C 6 hours 4 hours
Product A 9 hours 5 hours
The contribution margin is PHP 12 for Procut C and PHP 7 for Product A. The available time daily for processing the
two products is 120 hours for Machine Type D and 80 hours for Machine type B. How would the restriction
(constraint) for Machine Type B expressed?
A. 4C + 5A B. 4C + 5A ≤ 80 C. 6C + 9A ≤ 120 D. 12C + 7A
___________3. Kapayapaan Corporation produces a product in 100 gallon batches. The basic ingredients used are material X costing
PHP 40 per gallon and material Y costing PHP 20 per gallon. No more than 1 gallon of Y can be used, and at least 15
gallons of X must be used.
How would the objective function (minimizing of product cost) be expressed?
A. 20Y + 40X B. 40Y + 20X C. Y + 15X D. 40Y + 150X
___________4. Statement I: In business, linear programming is used for planning resource allocations (to make optimum use of
limited resources).
Statement II: Conditions calling for the use of linear programming include specification of a cost or revenue objective
formula.
A. Only Statement I is true. C. Only Statement II is true.
B. Both statements are true. D. Neither statements are true.
___________5. The _____________ is a procedure involving a set of mathematical steps to solve linear programming problems.
A. Sensitivity Analysis C. Simplex Algorithm
B. Simplex Method D. Computer Solution
___________6. It is the dollar amount one would be willing to pay for one additional resource unit.
A. Peso Value B. Currency Value C. Demand Value D. Marginal Value
___________7. Which of the following are other forms of sensitivity?
A. Changing individual constraint parameters
B. Adding new constraints
C. Adding new variables
D. All of the above
___________8. What are the typical types of general-purpose quantitative methods software packages?
A. Excel spreadsheet C. Neither A and B
B. QM for Windows D. Both A and B
___________9. Statement I: A problem presented for a transportation example consists of 9 variables.
Statement II: A linear programming is used to determine asset allocations for a portfolio.
Which of the following is correct?
A. Only Statement I is false. C. Only Statement II is false.
B. Both statements are false. D. Neither statements are false.
___________10. Statement I: The mathematical steps of the simplex method were simply programmed in prewritten software
packages designed for the solution of linear programming problems.
Statement II: The ability to solve linear programming problems quickly and cheaply on the computer, regardless of
the size of the problem, popularized linear programming and expanded its use by business.
Which of the following is correct?
A. Only Statement I is false. C. Only Statement II is false.
B. Both statements are false. D. Neither statements are false.
___________11. _____________ is the analysis of the effect of parameter changes on the optimal solution.
A. Sensitivity Analysis C. Simplex Algorithm
B. Simplex Method D. Computer Solution
___________12. What example determines how much to invest in each alternative in order to maximize the return?
A. Investment B. Product C. Marketing D. Transportation
___________13. What example determines how many dozen (boxes) of each product to produce in order to maximize profit?
A. Investment B. Product C. Marketing D. Diet
___________14. What example desires to know the number of advertisements it should purchase in order to maximize exposure?
A. Investment B. Product C. Marketing D. Diet
___________15. What example determines the amount of different kinds of nutrients which should be included in a diet and minimize
the cost?
A. Investment B. Product C. Marketing D. Diet
___________16. Statement I: Excel can be used to solve linear programming problems, although the data input requirements can be
more time-consuming and tedious than with a software package like QM for Windows that is specifically designed
for the purpose.
Statement II: QM for Windows can be used to solve linear programming problems, although the data input
requirements can be more time-consuming and tedious than with a software package like Excel that is specifically
designed for the purpose.
Which of the following is correct?
A. Only Statement I is false. C. Only Statement II is false.
B. Both statements are false. D. Neither statements are false.
___________17. The Gantt Chart below shows that the project is
NOW
Time in Weeks
Activity 2 4 6 8 10 12 14 16
A
B
C
D ------------------------
Legend: FINISHED
------------------------ IN PROCESS OR NOT YET FINISHED
A. Complete B. Ahead of schedule C. On schedule D. Behind schedule
___________18. Hennepin Co. used 30 hours to produce the first batch of units. The second batch took an additional 18 hours. How
many total hours will the first four batches require?
A. 76.8 hours B. 96.2 hours C. 120.0 hours D. 61.44 hours
___________19. Ridgefield, Inc. is considering a three-phase research project. The expected time for completion of phase 1 of the
project are
Optimistic 4 months
Most likely 8 months
Pessimistic 18 months
Using the program evaluation and review technique (PERT), the expected time for completion of phase 1 should be
A. 8 months B. 9 months C. 10 months D. 18 months
___________20. Statement I: Linear Programming is a model that consists of a linear relationship representing a firm’s decision(s),
given an objective and resource constraints.
Statement II: Objective Function is a linear relationship that reflects the objective of an operation.
Statement III: A non-feasible solution does not violate any of the constraints.
Statement IV: The last point the objective function touches as it leaves the feasible solution area is model constraint.
Statement V: A non-negativity constraint restricts the decision variables to zero or positive values.
Which of the following is correct?
A. Statements I, II, III are true. C. Statements II, IV, V are true.
B. Statements I, II, V are true. C. Statements II, IV, V are true.
___________21. Statement I: Management Science is the actual use of the model that has been developed.
Statement II: Implementation is the application of scientific approach to solving management problem in order to
help manager make better decisions.
Which of the following is correct?
A. Only Statement I is true. C. Only Statement II is true.
B. Both statements are true. D. Neither statements are true.
___________22. The Arrogant Company makes toys A and B, each of which needs two processes; cutting and wrapping. The
contribution margin is PHP 6 for Product A and PHP 5 for Product B. The table below shows the maximum number
of units (constraint) of each product that may be processed in two departments.
Maximum Capacities (in Product Units)
Cutting Wrapping
Product A 60 80
Product B 60 40
Considering the constraint is processing, which combination of Products Y and Z maximizes the total contribution
margin?
A. 40 units of A and 20 units of B C. 80 units of A and 0 units of B
B. 60 units of A and 0 units of B D. 0 units of A and 40 units of B
___________23. In a system of equation for a linear programming model, what can be done to equalize an inequality such as 6X + 4Y
≤ 30?
A. Nothing B. Add a slack variable C. Add padding D. Multiply each element by 1
___________24. A firm must decide the mix of production of Product X and Product Y. There are only two resources used in the two
products, resources A and B. Data related to the two products are given in the following table:
Product X Product Y
Resource A 3 7
Resource B 2 1
C – CHARACTER P – PERSEVERANCE A – ATTITUDE ROCHELLE ANN D. CHIL, CPA
3
___________56. Statement I: The most obvious way to ascertain the effect of a change in the parameter of a model is to make the
change in the original model, resolve the model and compare the solution results with the original.
Statement II: The most obvious way to ascertain the effect of a change in the parameter of a model is to make the
change in the revised model, resolve the revised model and compare the solution results with the revision.
Which of the following is correct?
A. Only Statement I is false. C. Only Statement II is false.
B. Both statements are false. D. Neither statements are false.
___________57. “Integer and non-integer variables are allowed in integer programming.” This statement is ___________.
A. True B. False C. Irrelevant D. Relevant
___________58. “In total integer model, some solution values for decision variables are integers and others can be non-integers.”
This statement is _____________.
A. True B. False C. Irrelevant D. Relevant
___________59. “Under mixed integer model, some solution values for decision variables are integers and others can be non-
integers.” This statement is _____________.
A. True B. False C. Irrelevant D. Relevant
___________60. “In a model which the constraints are all less than or equal and the constraint coefficient is positive, a feasible
solution is always ensured by rounding down.” This statement is _____________.
A. True B. False C. Irrelevant D. Relevant
___________61. These are various applications of mathematics in business or any complex system.
A. Operations Management C. Management Science
B. Quantitative Methods D. Project Scheduling Techniques
___________62. Statement I: The constraints itself can be in terms of any type of activity of valuation.
Statement II: In the marketing example, the objective is to maximize the audience exposure.
Which of the following is correct?
A. Only Statement I is true. . C. Only Statement II is true.
B. Both statements are true. D. Neither statements are true.
___________63. “In a 0-1 integer model, the solution values of the decision variables are zero or one.” This statement is
__________.
A. True B. False C. Irrelevant D. Relevant
___________64. “Integer programming expresses the optimization of a linear function subject to a set of linear constraint over
integer variables.” This statement is __________.
A. True B. False C. Irrelevant D. Relevant
___________65. “Total integer models all decision variables have integer solution values.” This statement is ____________.
A. True B. False C. Irrelevant D. Relevant
___________66. Statement I: The Xij is a double prospective variable.
Statement II: The unbalanced transportation model shows supply equals demand such that all constraints are
equalities.
Which of the following is correct?
A. Only Statement I is false . C. Only Statement II is false.
B. Both statements are false. D. Neither statements are false.
___________67. It is the discipline of applying quantitative methods oriented to planning.
A. Operations Research C. Quantitative Methods
B. Quantitative Techniques D. Network Models
___________68. A management science technique used to determine the optimal way to achieve an objective, subject to restrictions,
in cases in which all the mathematical relationships are linear.
A. Network Flow Models C. Linear Programming
B. Integer Programming D. Computer Solutions
___________69. A model that represents the flow of items through a system.
A. Network models C. Chain models
B. Network flow models D. Chain flow models
___________70. A type of linear programming model similar to a transportation model, except that the supply at each source is
limited to one unit and the demand at each destination is limited to one unit.
A. Assignment model C. Transportation model
B. Transshipment model D. Network models
___________71. A mathematical symbol that represent levels of activity by the firm.
A. Decision Variable C. Linear Programming
B. Objective Function D. Parameters
___________72. Which of the following basic elements of project plans includes a detailed statement of what is to be accomplished
by the project, how it will achieve the company’s goals and meet the strategic plan, and an estimate of when it needs
to be completed, the cost and the return?
A. Objectives B. Project Scope C. Schedules D. Contract Requirements
___________73. Which of the following basic elements of project plans includes a discussion of how to approach the project, the
technological and resource feasibility, the major tasks involved, and a preliminary schedule; it includes a
justification of the project and what constitutes project success?
A. Objectives B. Project Scope C. Schedules D. Contract Requirements
___________74. Which of the following defines Contract Requirements?
A. A list of all major events, tasks and subschedules, from which a master schedule is developed
B. The overall project budget for all resource requirements and procedures for budgetary control
C. A discussion of how to approach the project, the technological and resource feasibility, the major tasks
involved, and a preliminary schedule; it includes a justification of the project and what constitutes project
success
D. A general structure of managerial. Reporting and performance responsibilities including a detailed list of staff,
suppliers, subcontractors, managerial requirements and agreements, reporting requirements, and a projected
organizational structure.
___________91. A model that consists of linear relationships representing a firm’s decision(s), given an objective and resource
constraints.
A. Decision Variable C. Linear Programming
B. Parameters D. Objective Function
___________92. The _______________ for an objective coefficient is the range of values over which the current optimal solution
point will remain optimal.
A. Optimal Range C. Coefficient Range
B. Sensitivity Range D. Solution Range
___________93. Statement I: The shadow price is the marginal economic value of one additional unit of a resource.
Statement II: The standard form requires all variables to be the left of the inequality and numeric values to the right.
Which of the following is correct?
A. Only Statement I is false . C. Only Statement II is false.
B. Both statements are false. D. Neither statements are false.
___________94. “When supply exceeds demand, a dummy row is added to the tableau.” This statement is __________.
A. True B. False C. Irrelevant D. Relevant
___________95. “A penalty cost is the difference between the largest and next largest cell cost in a row (or column).” This statement
is _________.
A. True B. False C. Irrelevant D. Relevant
___________96. “In the minimum cell cost method as much as possible is allocated to the cell with the minimum cost.” This
statement is _________.
A. True B. False C. Irrelevant D. Relevant
___________97. It is a person skilled in the application of management science technique.
A. Accountant C. Auditor
B. Consultant D. Management Scientist
___________98. Statement I: In order for a project to be selected to be undertaken, it typically has to offer some kind of positive gain
or benefit for the organization that is considering it.
Statement II: Return on Asset is a performance measure that is often used to evaluate the expected outcome of a
project or to compare a number of different products.
Which of the following is correct?
A. Statement I is true C. Statement II is true.
B. Both statements are true. D. Neither statements are true.
___________99. These are made up of individuals from various areas and departments within a company.
A. Project groups C. Project teams
B. Department groups D. Department teams
___________100. It is a computer-based system that help decision maker address complex problem that are across different parts of
an organization and operation.
A. Decision Support C. Decision Support System
B. Support System D. Support Decision System
___________101. “With the northwest corner method, an initial allocation is made to the cell in the upper left-hand corner of the
tableau,” This statement is _______.
A. True B. False C. Irrelevant D. Relevant
___________102. It is a discipline that adapts the scientific approach for problem solving to help managers make informed decisions.
A. Management Advisory Services C. Management Science
B. Management Consultancy D. Management Services
___________103. Statement I: Integer and non-integer variables are allowed in integer programming.
Statement II: In total integer model some solution values for decision variables are integers and others can be non-
integers.
Statement III: Under mixed integer model, some solution values for decision variables are integers and others can be
non-integer.
Statement IV: In a model which the constraints are less than or equal and the constraint coefficient is positive, a
feasible solution is always ensured by rounding down.
Which of the following is true?
A. Statement I and II are false. C. Statement II and III are true.
B. Statement III and IV are false. D. Statement I and III are true.
___________104. It is a type of a linear programming problem in which a product is to be transported from a number of sources to a
number of destinations at the minimum cost.
A. Transportation model B. Network Flow model C. Linear Programming model D. Transshipment model
___________105. A linear relationship that represents a restriction n decision making.
A. Model Constraints C. Non-negativity Constraints
B. Feasible Solution D. Decision Variable
___________106. “When demand exceeds supply, a dummy column is added to the tableau.” This statement is __________.
A. True B. False C. Irrelevant D. Relevant
___________107. Statement I: Fractional relationships between variables in constraints must not be eliminated.
Statement II: Fractional relationships between variables in constraints must be eliminated.
Which of the following is correct?
A. Only Statement I is false. C. Only Statement II is false.
B. Both statements are false. D. Neither statements are false.
___________108. It is represented as lines, connect nodes and show flow from one point to another.
A. Branches B. Nodes C. Network D. Model
___________111. Statement I: Management is generally perceived to be concerned with the planning, organization, and control of an
ongoing process or activity such as the production of a product or delivery of a service.
Statement II: Project management is different in that it reflects a commitment of resources and people to a typically
important activity for a relatively short time frame, after which the management effort is dissolved.
Statement III: Projects have the continuity of supervision that is typical in the management of a production process.
Which of the following is correct?
A. Statements I and III are true. C. All of the statements are true.
B. Statement III is false. D. All of the statements are false.
___________112. It restricts the decision variables to zero or positive values.
A. Non-negativity Constraints C. Model Constraints
B. Decision Variable D. Objective Function
___________113. Statement I: Series is an activity can be performed simultaneously.
Statement II: Parallel is an activity cannot be performed unless another activity is undertaken.
Which of the following is correct?
A. Statement I is true. C. Statement I false.
B. Statement II is false. D. Both b and c.
___________114. Statement I: Events are discreate moments in time representing the start or finish of an activity; they consume no
resources.
Statement II: Activities are tasks to be accomplished; they consume resources, including time, and have a duration
over time.
Which of the following is correct?
A. Only Statement I is true. C. Only Statement II is true.
B. Both statements are true. D. Neither statements are true.
___________115. Which of the following is/are the integer programming models?
A. 1-2 B. 0-1 C. 2-3 D. 3-4
___________116. What are the five steps in scientific method?
A. Definition of the problem, Model construction, Model solution, Observation, Implementation
B. Model construction, Model solution, Definition of the problem, Implementation, Observation
C. Observation, Model construction, Model solution, Implementation, Definition of the problem
D. Observation, Definition of the problem, Model construction, Model solution, Implementation
___________117. Shadow prices are also known as
A. Marginal Values B. Peso Values C. Dual Values D. Zero Values
___________118. The other term for simplex method
A. Simplex Algorithm C. Sensitivity Analysis
B. Computer Solution D. Marginal Value
___________119. Statement I: Linear Programming is a technique used to optimize an objective function (maximize revenue or profit
function or minimize a cost function, subject to constraints (such as scarce resources, minimum/maximum levels of
production, performance, etc.)
Statement II: Linear Programming is a technique used to optimize an objective function (minimize revenue or
profit function or maximize a cost function, subject to constraints (such as scarce resources, minimum/maximum
levels of production, performance, etc.)
Which of the following is correct?
A. Only Statement I is true. C. Only Statement II is true.
B. Both statements are true. D. Neither statements are true.
___________120. It is the last point the objective function touches as it leaves the feasible solution area.
A. Optimal Solution C. Optimal Solution Point
B. Solution Point D. Solution Optimal Point
“Keep your feet on the ground. You have a long way to go.”