Q1: Solve only 3 parts from the following quantitative problems:

1. Personal Mini Warehouses is planning to expand its successful Orlando

business into Tampa. In doing so, the company must determine how many
storage rooms of each size to build. Its objective and constraints follow:
Maximize monthly earnings = 50 X 1 +20 X 2
Subject to:
2 X 1 +4 X 2 ≤ 400¿ )

100 X 1 +50 X 2 ≤ 8000 ( square footage required )

X 1 ≤ 60(rental limit expected )

X 1 , X 2 ≥0

Where:
X 1 =number of large spaces devloped

X 2 =number of small spaces devloped

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Final Exam-Quantitative Methods- Dr Magda Mustafa Sadig
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2. Quarterly demand for Jaguar XJ18’s at a New York auto dealership is
forecast with the equation:
Y^ =10+ 3 X

Where:
X = time period (quarter 1 of last year = 0
(Quarter 2 of last year = 1
(Quarter 3 of last year = 2
(Quarter 4 of last year = 3
(Quarter 5 of last year = 4 and so on
and : Y^ =¿ Predicted quarterly demand

The demand for luxury sedans is seasonal, and the indices for quarters 1, 2, 3, and
4 are 0.80, 1.00, 1.30 and 0.90, respectively. Using the trend equation, forecast the
demand for each quarter of next year. Then adjust each forecast to adjust for
seasonal (quarterly) variations.

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3. Patterson Electronics supplies microcomputer circuitry to a company that
incorporates microprocessors into refrigerators and other home appliances. One
of the components has an annual demand of 250 units, and this is constant
throughout the year. Carrying cost is estimated to be $1 per unit per year, and
the ordering cost is $20 per order.
a. To minimize cost, how many units should be ordered each time an order is
placed?
b. How many orders per year are needed with the optimal policy?
c. What is the average inventory if costs are minimized?
d. Suppose the ordering cost is not $20, and Patterson has been ordering 150
units each time an order is placed. For this order policy to be optimal, what
would the ordering cost have to be?

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4. The Maitland Furniture store gets an average of 50 customers per shift. The
manager of Maitland wants to calculate whether she should hire 1, 2, 3, or 4
salespeople. She has determined that average waiting times will be 7 minutes
with 1 salesperson, 4 minutes with 2 salespeople, 3 minutes with 3 salespeople,
and 2 minutes with 4 salespeople. She has estimated the cost per minute that
customers wait at $1. The cost per salesperson per shift (including benefits) is
$70. How many salespeople should be hired?

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5. Customers enter the waiting line at a cafeteria on a first-come, first-served
basis. The arrival rate follows a Poisson distribution, and service times follow
an exponential distribution. If the average number of arrivals is 6 per minute
and the average service rate of a single server is 10 per minute, what is the
average number of customers in the system?

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6. Vacation Inns is a chain of hotels operating in the southwestern part of the
United States. The company uses a toll-free telephone number to take
reservations for any of its hotels. The average time to handle each call is 3
minutes, and an average of 12 calls are received per hour. The probability
distribution that describes the arrivals is unknown. Over a period of time it is
determined that the average caller spends 6 minutes either on hold or receiving
service. Find the average time in the queue, the average time in the system, the
average number in the queue, and the average number in the system.

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7. Sales of Cool-Man air conditioners have grown steadily during the past 5 years:
year 1 2 3 4 5 6
sales 450 495 518 563 584 ?
a. The sales manager had predicted, before the business started, that year 1’s
sales would be 410 air conditioners. Using exponential smoothing with a
weight of develop forecasts for years 2 through 6.
b. Using smoothing constants of 0.6 and 0.9, develop forecasts for the sales of
Cool-Man air conditioners.

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8. Flemming Accessories produces paper slicers used in offices and in art stores.
The minislicer has been one of its most popular items: Annual demand is 6,750
units and is constant throughout the year.
Kristen Flemming, owner of the firm, produces the minislicers in batches.
On average, Kristen can manufacture 125 minislicers per day. Demand for
these slicers during the production process is 30 per day.
The setup cost for the equipment necessary to produce the minislicers is
$150. Carrying costs are $1 perminislicer per year. How many minislicers
should Kristen manufacture in each batch?

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9. Dorsey Distributors has an annual demand for a metal detector of 1,400. The
cost of a typical detector to Dorsey is $400. Carrying cost is estimated to be
20% of the unit cost, and the ordering cost is $25 per order. If Dorsey orders in
quantities of 300 or more, it can get a 5% discount on the cost of the detectors.
Should Dorsey take the quantity discount? Assume the demand is constant.

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Q2: Draw a circle around the letter of the correct answer:
1. When using a graphical solution procedure, the region bounded by the set of
constraints is called the
a. Solution.
b. Feasible region.
c. Infeasible region.
d. Maximum profit region.
e. None of the above.
2. A feasible solution to an LP problem:
a. Must satisfy all of the problem’s constraints simultaneously.
b. Need not satisfy all of the constraints, only some of them.
c. Must be a corner point of the feasible region.
d. Must give the maximum possible profit.
3. Qualitative forecasting models include:
a. Regression analysis.
b. Delphi.
c. Time-series models.
d. Trend lines.
4. A forecasting model that only uses historical data for the variable being
forecast is called a:
a. Time-series model.
b. Causal model.
c. Delphi model.
d. Variable model.

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5. One example of a causal model is:
a. Exponential smoothing.
b. Trend projections.
c. Moving averages.
d. Regression analysis.
6. Sales for a company are typically higher in the summer months than in the
winter months. This variation would be called a
a. Trend.
b. Seasonal factor.
c. Random factor.
d. Cyclical factor.
7. Which of the following is a basic component of an inventory control
system?
a. planning what inventory to stock and how to acquire it
b. forecasting the demand for parts and products
c. controlling inventory levels
d. developing and implementing feedback measurements for revising plans and
forecasts
e. all of the above are components of an inventory control system
8. Which of the following is not an assumption in models?
a. arrivals come from an infinite or very large population
b. arrivals are Poisson distributed
c. arrivals are treated on a FIFO basis and do not balk or renege
d. service times follow the exponential distribution
e. the average arrival rate is faster than the average service rate
9. A queuing system described as would have
a. Exponential service times.
b. Two queues.
c. Constant service times.
d. Constant arrival rates.
10.The utilization factor for a system is defined as
a. Mean number of people served divided by the mean number of arrivals per
time period.
b. The average time a customer spends waiting in a queue.
c. Proportion of the time the service facilities are in use.
d. The percentage of idle time.
e. None of the above.
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11.In analyzing a problem, you should normally study
a. The qualitative aspects.
b. The quantitative aspects.
c. Both a and b.
d. Neither a nor b.
12.Quantitative analysis is
a. A logical approach to decision making.
b. A rational approach to decision making.
c. A scientific approach to decision making.
d. All of the above.

13.Frederick Winslow Taylor

a. Was a military researcher during World War II.
b. Pioneered the principles of scientific management.
c. Developed the use of the algorithm for QA.
d. All of the above.
14.An input (such as variable cost per unit or fixed cost) for
a. a model is an example of
b. a decision variable.
c. a parameter.
d. an algorithm.
e. a stochastic variable.
15.The point at which the total revenue equals total cost (meaning zero profit) is
called the
a. Zero-profit solution.
b. Optimal-profit solution.
c. Break-even point.
d. Fixed-cost solution.
16.Quantitative analysis is typically associated with the use of
a. Schematic models.
b. Physical models.
c. Mathematical models.
d. Scale models.

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17.Sensitivity analysis is most often associated with which step of the quantitative
analysis approach?
a. defining the problem
b. acquiring input data
c. implementing the results
d. analyzing the results
18.A deterministic model is one in which
a. There is some uncertainty about the parameters used in the model.
b. There is a measurable outcome.
c. All parameters used in the model are known with complete certainty.
d. There is no available computer software.

Q3: For the correct statements encircle the word (true) and encircle the word
(false) for the false statements:
1. In an LP problem, at least one corner point must be an optimal solution if an
optimal solution exists.
a. True
b. False
2. In exponential smoothing, if you wish to give a significant weight to the most
recent observations, then the smoothing constant should be close to 0.
a. True
b. False
3. The reorder point is the quantity that is reordered each time an order is
placed.
a. True
b. False
4. A queuing system described as would have an exponential service times.
a. True
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 b. False
5. Poisson distribution is a probability distribution that is often used to describe
random arrivals in a queue.
a. True
b. False

Q4: Solve the following questions shortly:

A. It is important to understand the assumptions underlying the use of any
quantitative analysis model. What are the assumptions and requirements for
an LP model to be formulated and used?
B. What is the difference between a causal model and a time-series model?
C. Why is inventory an important consideration for managers?
D. What is the waiting line problem? What are the components in a waiting line
system? What are the assumptions underlying common queuing models?

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