Question 1

Efficiency is defined as the ratio of:

Accepted Answer

A) actual output to effective capacity. 
B) actual output to design capacity. 
C) design capacity to effective capacity. 
D) effective capacity to actual output. 
E) design capacity to actual output. 
A) actual output to effective capacity. 
B) actual output to design capacity. 
C) design capacity to effective capacity. 
D) effective capacity to actual output. 
E) design capacity to actual output.

Question 2

Capacity in excess of expected demand that is intended to offset uncertainty is a:

Accepted Answer

A) margin protect. 
B) line balance. 
C) capacity cushion. 
D) timing bubble. 
E) positioning hedge. 
A) margin protect. 
B) line balance. 
C) capacity cushion. 
D) timing bubble. 
E) positioning hedge.

Question 3

The Laplace criterion treats states of nature as being equally likely.

Accepted Answer

A) True 
 B)False

Question 4

If the minimum expected regret is computed, it indicates to a decision maker the expected:

Accepted Answer

A) value of perfect information. 
B) payoff under certainty. 
C) monetary value. 
D) payoff under risk. 
E) risk-seeking. 
A) value of perfect information. 
B) payoff under certainty. 
C) monetary value. 
D) payoff under risk. 
E) risk-seeking.

Question 5

Decision trees, with their predetermined analysis of a situation, are really not useful in making health care decisions since every person is unique.

Accepted Answer

A) True 
 B)False

Question 6

The local operations manager for the Internal Revenue Service must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. She estimates that net revenues (in thousands of dollars)will vary with how well taxpayers comply with the new tax code just passed by Congress, as follows:
 
If she uses the minimax regret criterion, how many new examiners will she decide to hire?

Accepted Answer

A) one 
B) two 
C) three 
D) either one or two 
E) either two or three 
A) one 
B) two 
C) three 
D) either one or two 
E) either two or three

Question 7

Consider the following decision scenario:
 
*PV for profits ($000)
The minimax regret strategy would be:

Accepted Answer

A) A. 
B) B. 
C) C. 
D) D. 
E) E. 
A) A. 
B) B. 
C) C. 
D) D. 
E) E.

Question 8

Capacity decisions are usually one-time decisions; once they have been made, we know the limits of our operations.

Accepted Answer

A) True 
 B)False

Question 9

The new owner of a beauty shop is trying to decide whether to hire one, two, or three beauticians. She estimates that profits next year (in thousands of dollars)will vary with demand for her services, and she has estimated demand in three categories, low, medium, and high.
 
If she uses the maximax criterion, how many beauticians will she decide to hire?

Accepted Answer

A) one 
B) two 
C) three 
D) either one or two 
E) either two or three 
A) one 
B) two 
C) three 
D) either one or two 
E) either two or three

Question 10

The difference between expected payoff under certainty and expected payoff under risk is the expected:

Accepted Answer

A) monetary value. 
B) value of perfect information. 
C) net present value. 
D) rate of return. 
E) profit. 
A) monetary value. 
B) value of perfect information. 
C) net present value. 
D) rate of return. 
E) profit.

Question 11

Two professors at a nearby university want to coauthor a new textbook in either economics or statistics. They feel that if they write an economics book, they have a 50 percent chance of placing it with a major publisher, and it should ultimately sell about 40,000 copies. If they cannot get a major publisher to take it, then they feel they have an 80 percent chance of placing it with a smaller publisher, with ultimate sales of 30,000 copies. On the other hand, if they write a statistics book, they feel they have a 40 percent chance of placing it with a major publisher, and it should result in ultimate sales of about 50,000 copies. If they cannot get a major publisher to take it, they feel they have a 50 percent chance of placing it with a smaller publisher, with ultimate sales of 35,000 copies.
What is the probability that the statistics book would wind up being placed with a smaller publisher?

Accepted Answer

A) 0.6 
B) 0.5 
C) 0.4 
D) 0.3 
E) 0 
A) 0.6 
B) 0.5 
C) 0.4 
D) 0.3 
E) 0

Question 12

A decision maker's worst option has an expected value of $2,550, and the decision maker's best option has an expected value of $4,750. With perfect information, the expected value would be $6,000. The decision maker has received an offer from a banking firm that will make their position risk-free for a fee of $600. How much better off will the decision maker be if they take the offer?

Accepted Answer

A) $2,200 
B) $4,250 
C) $3,450 
D) $1,250 
E) $650 
A) $2,200 
B) $4,250 
C) $3,450 
D) $1,250 
E) $650

Question 13

The expected value of perfect information is inversely related to losses predicted.

Accepted Answer

A) True 
 B)False

Question 14

Capacity planning requires an analysis of needs: what kind, how much, and when.

Accepted Answer

A) True 
 B)False

Question 15

The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000)will vary depending upon whether passenger demand is low, medium, or high, as follows:
 
If he uses the minimax regret criterion, which size bus will he decide to purchase?

Accepted Answer

A) small 
B) medium 
C) large 
D) either small or medium 
E) either medium or large 
A) small 
B) medium 
C) large 
D) either small or medium 
E) either medium or large

Question 16

The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000)will vary depending upon whether passenger demand is low, medium, or high, as follows:
 
If he uses the maximin criterion, which size bus will he decide to purchase?

Accepted Answer

A) small 
B) medium 
C) large 
D) either small or medium 
E) either medium or large 
A) small 
B) medium 
C) large 
D) either small or medium 
E) either medium or large

Question 17

In decision theory, states of nature refer to possible future conditions.

Accepted Answer

A) True 
 B)False

Question 18

The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows:
 
For what range of probability that demand will be high, will she decide to lease the small facility?

Accepted Answer

A) 0-0.25 
B) 0-0.33 
C) 0.25-0.5 
D) 0.33-1 
E) 0.5-1 
A) 0-0.25 
B) 0-0.33 
C) 0.25-0.5 
D) 0.33-1 
E) 0.5-1

Question 19

The advertising manager for Roadside Restaurants, Inc., needs to decide whether to spend this month's budget for advertising on print media, television, or a mixture of the two. She estimates that the cost per thousand "hits" (readers or viewers)will vary depending upon the success of the new cable television network she plans to use, as follows:
 
If she uses the maximax criterion, which advertising strategy will she use?

Accepted Answer

A) print 
B) mixed 
C) television 
D) either print or mixed 
E) either mixed or television 
A) print 
B) mixed 
C) television 
D) either print or mixed 
E) either mixed or television

Question 20

The local operations manager for the Internal Revenue Service must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. She estimates that net revenues (in thousands of dollars)will vary with how well taxpayers comply with the new tax code just passed by Congress, as follows:
 
If she uses the Laplace criterion, how many new examiners will she decide to hire?

Accepted Answer

A) one 
B) two 
C) three 
D) either one or two 
E) either two or three 
A) one 
B) two 
C) three 
D) either one or two 
E) either two or three

Efficiency is defined as the ratio of:

Capacity in excess of expected demand that is intended to offset uncertainty is a:

The Laplace criterion treats states of nature as being equally likely.

If the minimum expected regret is computed, it indicates to a decision maker the expected:

Decision trees, with their predetermined analysis of a situation, are really not useful in making health care decisions since every person is unique.

Consider the following decision scenario: *PV for profits ($000) The minimax regret strategy would be:

Capacity decisions are usually one-time decisions; once they have been made, we know the limits of our operations.

The difference between expected payoff under certainty and expected payoff under risk is the expected:

The expected value of perfect information is inversely related to losses predicted.

Capacity planning requires an analysis of needs: what kind, how much, and when.

In decision theory, states of nature refer to possible future conditions.

The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: For what range of probability that demand will be high, will she decide to lease the small facility?

Introduction to Operations Management

Competitiveness, Strategy, and Productivity

Forecasting

Product and Service Design

Process Selection and Facility Layout

Work Design and Measurement

Location Planning and Analysis

Management of Quality

Quality Control

Aggregate Planning and Master Scheduling

Inventory Management

MRP and ERP

Jit and Lean Operations

Supply Chain Management

Scheduling

Project Management

Management of Waiting Lines

Linear Programming

Filters

Exam 5: Strategic Capacity Planning for Products and Services

Efficiency is defined as the ratio of:

Capacity in excess of expected demand that is intended to offset uncertainty is a:

The Laplace criterion treats states of nature as being equally likely.

If the minimum expected regret is computed, it indicates to a decision maker the expected:

Decision trees, with their predetermined analysis of a situation, are really not useful in making health care decisions since every person is unique.

Consider the following decision scenario: *PV for profits ($000) The minimax regret strategy would be:

Capacity decisions are usually one-time decisions; once they have been made, we know the limits of our operations.

The difference between expected payoff under certainty and expected payoff under risk is the expected:

The expected value of perfect information is inversely related to losses predicted.

Capacity planning requires an analysis of needs: what kind, how much, and when.

In decision theory, states of nature refer to possible future conditions.

The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: For what range of probability that demand will be high, will she decide to lease the small facility?

Introduction to Operations Management

Competitiveness, Strategy, and Productivity

Forecasting

Product and Service Design

Process Selection and Facility Layout

Work Design and Measurement

Location Planning and Analysis

Management of Quality

Quality Control

Aggregate Planning and Master Scheduling

Inventory Management

MRP and ERP

Jit and Lean Operations

Supply Chain Management

Scheduling

Project Management

Management of Waiting Lines

Linear Programming

Filters