Max 3x1 Week 6 Question Paper

Question 1

When we are attempting to make a business decision, the decision criteria should always be to minimize cost. Answer Selected Answer: False Question 2

EVSI can never exceed EVPI Answer Selected Answer: True Question 3

You are currently paying $12 per hour for labor, and labor costs are included in the calculation of the objective function coefficients of a maximization problem. The shadow price for labor printed on the sensitivity analysis report is $8. It would be economically beneficial to you if you could secure extra labor for $15 per hour. Answer Selected Answer: True Question 4

If project 1
the certainty of a certain amount is compared with the willingness to gamble that amount on a larger amount. Question 7

Banner Tools produces two styles of steel hammers with wooden handles. The first sells for $6 and consists of .5 pounds of steel; the second sells for $15 and consists of 1 pound of steel. Since steel costs the firm $4 per pound and the handle, labor, and packaging costs amount to $1 for either hammer, the profits coefficients are $6 - .5($4) - $1 = $3 for the smaller hammer and $15 – 1($4) - $1 = $10 for the larger hammer. Thus the objective function for this model is MAX 3X1 + 10X2. Given that the shadow price for steel is $2, which of the following statements is correct? Answer Selected Answer: d. Banner should buy at least as much as the “ALLOWABLE INCREASE”, but only if it can be purchase for less than $6 per pound. Question 8

Nike may build a factory at Millville (Y1) or it may not. It may also build a regional warehouse at the same site (W1). But Nike will not build a warehouse without also building a factory. So, its choices are: (1) neither factory nor warehouse; (2) factory only; or (3) factory and warehouse. The appropriate linear constraint to express this
Offer B Question 13

Extel Industries produces integrated circuit components for use in the next generation of automobiles. In particular, it can make the AT50 unit that can control the air temperature in the car, the V35 unit that monitors vibration and makes adjustments accordingly, and the GM30 that regulates the engine so that the car provides maximum efficiency. The unit profits on these units are $84, $112, and $126, respectively. Each of these units uses different quantities of three computer chips (as shown below), which Extel purchases from a Taiwanese distributor. C101 H122 P043 AT50 1 1 1 V35 1 1 2 GM30 1 2 1 Each week Extel receives 350 C101’s, 300 H122’s, and 400 P043’s. The purchase price for these chips represents a sunk cost to Extel. Solve this using linear optimization. Which units will Extel produce? Answer Selected Answer: b. AT50 and