MANSCI- Reviewer 7.
A balanced assignment problem has an equal number of
rows and columns in its cost matrix. (T/F)
Assignment Method
8. The enumeration method is efficient for solving large
1. What is the primary objective of the assignment
assignment problems. (T/F)
method in linear programming?
9. The Hungarian method is a trial-and-error approach to
a) To maximize the number of assignments.
solving assignment problems. (T/F)
b) To minimize the overall cost (or maximize profit).
10. The Hungarian method involves reducing the cost
c) To ensure each individual is assigned multiple tasks. matrix through subtraction and addition. (T/F)
d) To balance the workload equally among individuals. 11. In the Hungarian method, if the number of lines needed
to cover all zeros equals the number of rows or columns, an
2. A balanced assignment problem is characterized by: optimal assignment is possible. (T/F)
a) A non-square cost matrix. 12. The opportunity cost table in the Hungarian method
b) An unequal number of rows and columns. represents the original costs of assignment. (T/F)
c) A square cost matrix (n x n). 13. If, in the Hungarian method, the number of lines to
cover all zeros is less than the number of rows or columns,
d) The use of the enumeration method exclusively. the opportunity cost table needs revision. (T/F)
3. The Hungarian method primarily involves: 14. A transportation problem focuses on assigning tasks to
individuals to minimize cost. (T/F)
a) Randomly assigning tasks and evaluating total costs.
15. Both the assignment and transportation problems are
b) A trial-and-error approach to find the minimum cost.
types of linear programming problems. (T/F)
c) Matrix reduction to find the optimal assignment.
ANSWERS:
d) Considering all possible assignment combinations.
1. B
4. In the Hungarian method, what is the significance of 2. C
drawing lines to cover all zeros in the opportunity cost 3. C
table? 4. A
5. B
a) It indicates the need to revise the opportunity cost table.
6. F
b) It confirms that an optimal assignment has been found. 7. T
8. F
c) It shows that the enumeration method should be used 9. F
instead. 10. T
d) It signifies the assignment process has failed and should 11. T
be restarted. 12. F
13. T
5. What type of problem involves transporting goods from 14. F
sources to destinations, minimizing the total 15. T
transportation cost?
Decision Theory
a) Assignment problem.
1. It is the body of knowledge and analytical
b) Transportation problem. techniques designed to help decision makers
choose from a set of alternatives based on possible
c) Enumeration problem.
consequences?
d) Hungarian problem. 2. What is the term for the chance of something
happening, which may be expressed as a fraction,
True or False decimal, or percentage?
6. The assignment method in linear programming always 3. It is the product of the probability that an event
aims to maximize the total cost. (T/F) will occur and the amount to be received upon
such an occurrence.
4. It takes into account only the worst possible Compute the marginal profit and marginal loss.
outcome for each alternative. Decision makers try
to maximize the minimum possible payoff.
5. What is the term for a tool that contains
probabilities and conditional monetary values of
outcomes, allowing expected values to be
computed?
6. What decision-making tool is used to examine the
additional benefits of an activity compared to the
additional costs it incurs?
7. In Marginal Analysis, when an additional unit is
produced, what are the possible outcomes?
PROBLEM SOLVING 1
The PSA construction operations manager has to decide
whether to accept a bid or not. If the manager accepts the
bid, the construction company may gain P3.5 million if it
succeeds, or lose P2.5 million if it fails. The probability that
it will succeed is 30%. Find the mathematical expectation if
the company accepts the bid.
PROBLEM SOLVING 2
Given this payoff table that represents profits and losses
per alternatives and states of nature, state which can be
chosen as the best act using the following solutions:
A. MAXIMAX B. MAXIMIN C. LAPLACE
Transportation Problem:
A company has two warehouses (W1, W2) and three stores
PROBLEM SOLVING 3 (S1, S2, S3). The warehouses have capacities of 100 and 150
units, respectively. The stores have demands of 50, 75, and
The storage manager of 1D Siopao Center is asked to 125 units, respectively. The transportation costs per unit
determine the number of siopao to be steamed per day to are:
maximize the profit. The past records of average sales per
day were retrieved and the standard deviation was
computed. A dozen of siopao costs P36.00 and can be sold
at P96.00. Pieces of siopao not sold within the day are
donated to the Amity Charity to feed the homeless. The
average sale per day is 200 dozen and the standard
deviation is 20. How many dozens of siopao should be
steamed per day? Find the optimal transportation plan to minimize the total
cost.
The data are summarized below:
Assignment Method Problem Solving
▪ Marginal cost per dozen- P36.00
Solution using the Least Cost Method:
▪ Selling price per dozen- P96.00
1. W1 to S3: 100 units (cost = 1)
▪ Average sale per day (μ)- 200
2. W2 to S2: 75 units (cost = 2)
▪ Standard deviation of sales (σ)- 20
3. W2 to S3: 25 units (cost = 3)
4. W2 to S1: 50 units (cost = 4) 7. In marginal analysis, when an additional unit is
produced, what are the possible outcomes?
Total Cost Calculation:
A. The unit will or will not be sold
1. W1 to S3: 100 units x 1 = 100 B. The unit will break or be defective
C. The unit will cost more or less
2. W2 to S2: 75 units x 2 = 150
Problem Solving Problem 1:
3. W2 to S3: 25 units x 3 = 75
Mathematical Expectation A construction manager is
4. W2 to S1: 50 units x 4 = 200 deciding whether to accept a bid. If accepted, the company
Total Cost: 100 + 150 + 75 + 200 = 525 may gain ₱3.5 million if successful, or lose ₱2.5 million if it
fails. The probability of success is 30%.
1. What is the body of knowledge and analytical
techniques designed to help decision-makers Solution:
choose from a set of alternatives based on Success Probability = 0.3 → Gain = ₱3.5 million
possible consequences?
A. Risk Management Failure Probability = 0.7 → Loss = ₱2.5 million
B. Decision Theory
Mathematical Expectation (ME): ME = (0.3 × 3,500,000) +
C. Forecasting
(0.7 × -2,500,000) ME = 1,050,000 + (-1,750,000) ME = -
2. What is the term for the chance of something
700,000 (Correct Answer: B)
happening, which may be expressed as a fraction,
decimal, or percentage? Problem 2:
A. Probability
Decision Criteria Based on Payoff Table
B. Statistics
C. Forecast Solutions:
3. What is the product of the probability that an Maximax Criterion: Highest of row maximums
event will occur and the amount to be received A1: 15,000
upon such an occurrence?
A. Payoff Value A2: 20,000 → Best Act: A2
B. Opportunity Cost
A3: 16,000
C. Expected Monetary Value
Maximin Criterion: Highest of row minimums
4. Which criterion takes into account only the
A1: -10,000
worst possible outcome for each alternative,
where decision-makers try to maximize the A2: 2,000 → Best Act: A2
minimum possible payoff?
A. Maximax Criterion A3: 1,000
B. Minimax Criterion Laplace Criterion: Row averages
C. Maximin Criterion
A1: (10,000 + 15,000 + (-10,000)) / 3 = 5,000
5. What tool is used to display probabilities and
A2: (20,000 + 18,000 + 2,000) / 3 = 13,333.33 → Best Act:
conditional monetary outcomes, allowing for the
A2
computation of expected values?
A. Payoff Table A3: (5,000 + 16,000 + 1,000) / 3 = 7,333.33
B. Decision Tree
All solutions choose A2 as the best act.
C. Probability Distribution
Problem 3: Inventory Decision for Siopao Production
6. Which decision-making tool is used to evaluate
additional benefits versus additional costs A dozen siopao costs ₱36 and sells for ₱96. Unsold siopao is
incurred? donated. Daily average sales = 200 dozen; standard
A. Marginal Analysis deviation = 20 dozen.
B. Breakeven Analysis Step 1: Compute Marginal Profit (MP) and Marginal Loss
C. Cost-Benefit Analysis (ML)
MP = Selling Price – Cost = 96 - 36 = ₱60
ML = Cost = ₱36 13-15. Break-even Volume= 600 shirts
BREAK-EVEN ANALYSIS
1. It is a modeling technique to determine the
number of units to sell or produce that will result
in zero profit.
2. Costs that stay the same no matter how much you
sell (e.g., rent, salaries).
3. Costs that change depending on how much you
sell (e.g., materials, shipping).
4. The number of units you need to sell to cover all
your costs.
5. It is how much you sell your product for.
6. This will help to show the maximum profit on a
particular product/service that can be generated.
7. Break-even analysis helps to determine the
amount of gain that could be sustained if there is a
sales downturn.
8. Total cost is the amount of money charged to the
FORECASTING
customer for each unit of a product or service.
1. What does a linear trend line represent in a time
9. The break-even point gives a manager a point of
series?
reference in determining how many units will be
A. The seasonal changes in data
needed to ensure a profit.
B. The irregular patterns in data
C. The overall direction of data over time
D. The daily variation in demand
2. Which of the following is the correct equation for a
linear trend line?
ANSWERS: 3. What does a positive slope (b) in the linear trend line
1. Break- even analysis indicate?
2. Fixed cost A. A decreasing trend
3. Variable cost B. No trend
4. Break- even point C. An increasing trend
5. Selling price D. A seasonal pattern
6. T 4. Which of the following is not typically considered
seasonal data?
7. F
A. Quarterly product sales
8. F
B. Monthly electricity consumption
9. T
C. Daily weather temperatures
10-12. Total Profit= (100,000)
D. Number of Facebook likes in 10 second
5. What is the purpose of using seasonal factors?
A. To remove all data trends
B. To show the long-term average
C. To adjust the forecast based on repeating patterns
D. To simplify data storage
ENUMERATION:
1-2. Two Forms of Exponential Smoothing
3-5. 3 types of time frames forecast
ANSWERS:
Part 1: Multiple Choice
1. C
2. B
3. C
4. D
5. C
Part 2: ENUMERATION
1-2. Two Forms of Exponential Smoothing answer:
1. Simple exponential smoothing
2. Adjusted exponential smoothing
3-5. 3 types of time frames forecast
3. short range
4. medium range
5. long range
