# BSOP 209 Week 8 Final Exam

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1.            (TCO 8) What are the three parts of a wait-line system? (Points : 15)

2.            (TCO 9) What is the objective function of LP? (Points : 15)

3.            (TCO 11 & 12) What are two of the steps in a simplex maximization problem? (Points : 15)

4.            (TCO 10) What will happen if the right-hand side of a constraint is changed? (Points : 15)

5.            (TCO 15 & 16) What are three of the basic steps that both PERT and CPM follow? (Points : 15)

6.            (TCO 16) What is a “dummy activity?” (Points : 15)

7.            (TCO 3, 4, & 5) What is the formula for linear regression? Define each part. (Points : 15)

8.            (TCO 1) What are the four qualitative forecasting approaches that are available to us? (Points : 15)

9.            (TCO 6) Describe the “revenue junction.” (Points : 15)

10.          (TCO 8) What are the three parts of a typical queuing system? (Points : 15)

11.          (TCO 8) When designing a waiting line system, what “qualitative” concerns need to be considered? (Points : 15)

12.          (TCO 8) What is the expected value with perfect information? (Points : 15)

1.  (TCO 1 &2) What is the forecast for Aug based on a weighted moving average applied to the following past demand data and using the weights: 5, 3, 1.5? (largest weight is for most recent data)

2. (TCO 3, 4, and 5) The XYZ Paint Shop owns and operates a dozen shops in southern Iowa. Their signature paint is black epoxy. Sales (X, in millions of dollars) is related to Profits (Y, in hundreds of thousands of dollars) by the regression equation Y = 6.321 + 0.65X. What is your forecast of profit for a store with sales of \$25 million? \$65 million? (Points : 30)

3.  (TCO 6 and 7) A product is currently made in a job shop, where fixed costs are \$4,500 per year and variable cost is \$10 per unit. The firm sells the product for \$70 per unit. What is the break-even point for this operation? What is the profit (or loss) on a demand of 220 units per year? (Points : 30)

4.   (TCO 13, 14) XYZ coating company has reviewed four new processes for improving their coating line. The four processes, labeled A, B, C, and D use different technology and have different capacities. All the processes have the same level of production and the lifetime. The four states of nature represent four levels of consumer acceptance of the firm’s products. Values in the table are net present value of future profits in millions of dollars. Forecasts indicate that there is a 0.4 probability of acceptance level 1, 0.3 chance of acceptance level 2, 0.6 chance of acceptance level 3, and 0.5 change of acceptance level 4………..Using the criterion of expected monetary value, which production alternative should be chosen? (Points : 30)

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# BSOP 209 Week 6 Quiz

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1. Question: (TCO 14) Briefly discuss the decision methods used when there is complete uncertainty as to which state in a decision environment may occur. (Points : 10)

2. Question: (TCOs 10,11 and 12) Chad’s Pottery Barn has enough clay to make 24 small vases or 6 large vases. He has only enough of a special glazing compound to glaze 16 of the small vases or 8 of the large vases. Let X1 = the number of small vases and X2 = the number of large vases.

The smaller vases sell for \$3 each, and the larger vases would bring \$9 each.

3. Question: (TCO 13, 14) XYZ coating company has reviewed four new processes for improving their coating line. The four processes, labeled A, B, C, and D use different technology and have different capacities. All the processes have the same level of production and the lifetime.

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# BSOP 209 Week 6 Homework Assignment

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A.2

Even though independent gasoline stations have been having a difficult time, Susan Helms has been thinking about starting her own independent gasoline station. Susan’s problem is to decide how large her station should be. The annual returns will depend on both the size of her station and a number of marketing factors related to the oil industry and demand for gasoline. After a careful analysis, Susan developed the following table:

 Size of First Station Good Market (\$) Fair Market (\$) Poor Market (\$) Small 50000 20000 -10000 Medium 80000 30000 -20000 Large 100000 30000 -40000 Very Large 300000 25000 -160000

For example, if Susan constructs a small station and the market is good, she will realize a profit of \$50,000.

e) Develop a decision tree. Assume each outcome is equally likely, then find the highest EMV.

• A.3

Clay Whybark, a soft-drink vendor at Hard Rock Cafe’s annual Rockfest, created a table of conditional values for the various alternatives (stocking decision) and states of nature (size of crowd):

 States of Nature ( demand) Alternatives Big Average Small Large Stock \$ 22000 \$ 12000 -\$ 2000 Average Stock \$ 14000 \$ 10000 \$ 6000 Small Stock \$ 9000 \$ 8000 \$ 4000

The probabilities associated with the states of nature are 0.3 for a big demand, 0.5 for an average demand, and 0.2 for a small demand.

a)    Determine the alternative that provides Clay Whybark the greatest expected monetary value (EMV).

b) Compute the expected value of perfect information (EVPI).

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# BSOP 209 Week 5 Assignment Linear Programming Concept Paper And Problems

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BSOP 209 Week 5 Assignment Linear Programming Concept Paper

BSOP 209 Week 5 Homework Assignment Problem B1, B2

BSOP 209 Week 5 Graph 1

BSOP 209 Week 5 Graph 2

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# BSOP 209 Week 4 Quiz Waiting Line Models and Linear Programming

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1. Question: (TCO 6) What is the first step in solving a break-even analysis using a graphic approach?

2. Question: (TCO 7) Define NPV.

3. Question: (TCO 9) What limits the use of a graphical solution to LP?

4. Question: (TCO 8) What are the three parts of a wait-line system?

5. Question: (TCO 8) In reference to queuing, what is a limited or finite population?

6. Question: (TCO 8) What does FIFO mean?

7. Question: (TCO 8) Describe or define a negative exponential-probability distribution.

8. Question: (TCO 8) Which waiting-line model has a dependent relationship between the length of the queue and the arrival rate?

9. Question: (TCOs 6 and 7) XYZ plating is going ahead on an expansion project. They will be able to earn \$300 per hour and run 3,000 hours per year. What is the net present value for the next five years with an interest rate of 6%?

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# BSOP 209 Week 3 Homework Assignment

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S7.17

Markland Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs for proposal A are \$50,000, and for proposal B, \$70,000. The variable cost for A is \$12.00, and for B, \$10.00. The revenue generated by each unit is \$20.00.

a)    What is the break-even point in units for proposal A?

b) What is the break-even point in units for proposal B?

S7.18

Using the data in Problem S7.17:

a)    What is the break-even point in dollars for proposal A if you add \$10,000 installation to the fixed cost?

b)   What is the break-even point in dollars for proposal B if you add \$10,000 installation to the fixed cost?

S7.30

What is the net present value of an investment that costs \$75,000 and has a salvage value of \$45,000? The annual profit from the investment is \$15,000 each year for 5 years. The cost of capital at this risk level is 12%.

S7.31

The initial cost of an investment is \$65,000 and the cost of capital is 10%. The return is \$16,000 per year for 8 years. What is the net present value?

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# BSOP 209 Week 2 Quiz Linear Regression, Correlation, and Forecast Error

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1. Question: (TCO 1) For a moving average forecast to be of any use to us, what assumption must be true?

2. Question: (TCOs 3 and 4) In a regression equation, what is y hat?

3. Question: (TCOs 1 and 2) Given the following data, calculate the two-year moving averages for years 5 through 10.

4. Question: (TCOs 3, 4 and 5) While conducting an accounting audit of their finished goods inventory, Farmer’s Market clerks were able to construct the following data one of their nonseasonal baskets.

(a) Use trend projection to estimate the relationship between time and sales (state the equation). (b) Calculate forecasts for the first four months of the next year

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# BSOP 209 Week 2 Homework Assignment

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4.24

Howard Weiss, owner of a musical instrument distributorship, thinks that demand for bass drums may be related to the number of television appearances by the popular group Stone Temple Pilots during the previous month. Weiss has collected the data shown in the following table:

 Stone Temple Pilot’s TV Appearances Demand for Bass Drums 3 3 4 6 7 7 6 5 8 10 5 7

a)    Graph these data to see whether a linear equation might describe the relationship between the group’s television shows and bass drum sales.

b)   Use the least-squares regression method to derive a forecasting equation.

c)    What is your estimate for bass drum sales if the Stone Temple Pilots performed on TV nine times last month?

d)   What are the correlation coefficient (r) and the coefficient of determination (r2) for this model, and what do they mean?

4.46 Thirteen students entered the business program at Hillcrest College 2 years ago. The following table indicates what each student scored on the high school SAT math exam and their grade-point averages (GPAs) after students were in the Hillcrest program for 2 years.

 Student SAT Score GPA A 421 2.90 B 377 2.93 C 585 3.00 D 690 3.45 E 608 3.66 F 390 2.88 G 415 2.15 H 481 2.53 I 729 3.22 J 501 1.99 K 613 2.75 L 709 3.90 M 366 1.60

a)    Is there a meaningful relationship between SAT math scores and grades?

b)   If a student scores a 350, what do you think his or her GPA will be?

c) What about a student who scores 800?

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