1.

Probability Distribution

1. If only one event may occur on any one trial, then the events are said to be

a. independent.

b. exhaustive.

c. mutually exclusive.

d. continuous.

2. New probabilities that have been found using Bayes’ theorem are called

a. prior probabilities.

b. posterior probabilities.

c. Bayesian probabilities.

d. joint probabilities.

3. A measure of central tendency is

a. expected value.

b. variance.

c. standard deviation.

d. all of the above.

4. To compute the variance, you need to know the

a. variable’s possible values.

b. expected value of the variable.

c. probability of each possible value of the variable.

d. all of the above.

5. The square root of the variance is the

a. expected value.

b. standard deviation.

c. area under the normal curve.

d. all of the above.

6. Which of the following is an example of a discrete

distribution?

a. the normal distribution

b. the exponential distribution

c. the Poisson distribution

d. the Z distribution

7. The total area under the curve for any continuous

distribution must equal

a. 1.

b. 0.

c. 0.5.

d. none of the above.

8. Probabilities for all the possible values of a discrete random variable

a. may be greater than 1.

b. may be negative on some occasions.

c. must sum to 1.

d. are represented by area underneath the curve.

9. In a standard normal distribution, the mean is equal to

a. 1.

b. 0.

c. the variance.

d. the standard deviation.

10. The probability of two or more independent events

occurring is the

a. marginal probability.

b. simple probability.

c. conditional probability.

d. joint probability.

e. all of the above.

11. In the normal distribution, 95.45% of the population lies within

a. 1 standard deviation of the mean.

b. 2 standard deviations of the mean.

c. 3 standard deviations of the mean.

d. 4 standard deviations of the mean.

12. If a normal distribution has a mean of 200 and a standard deviation of 10, 99.7% of the
population falls within what range of values?

a. 170–230

b. 180–220

c. 190–210

d. 175–225

e. 170–220

13. If two events are mutually exclusive, then the probability of the intersection of these two
events will equal

a. 0.

b. 0.5.

c. 1.0.

d. cannot be determined without more information.

14. If P(A) =0.4 and P(B) = 0.5 and P(A and B) = 0.2, then P(B\A) = _____.

a. 0.80.
b. 0.50.

c. 0.10

d. 0.40.

e. none of the above.

15. If P(A) =0.4 and P(B) = 0.5 and P(A and B) = 0.2, then P(A or B) = _____.

a. 0.7.

b. 0.9.

c. 1.1.

d. 0.2.

e. none of the above.

2. Decision Analysis

FALSE 1. The first step in the decision-making process is identifying a problem.

FALSE 2. The step in the decision-making process that involves choosing a best alternative is
termed implementation.
FALSE 3. A discrepancy between an existing and a desired state of affairs is an opportunity .
FALSE 4. The final step in the decision-making process is implementing the chosen alternative.
TRUE 5. It is possible that at the end of the decision-making process that you may be required
to start the decision process over again.
TRUE 6. The price of a particular computer brand is a possible decision criterion.
TRUE 7. A decision criterion defines what is relevant in a decision.
FALSE 8. An optimistic manager will follow a maximin approach.
TRUE 9. Decision making is synonymous with managing.
TRUE 10. Managerial decision making is assumed to be rational .
FALSE 11. One assumption of rationality ts that we cannot know all of the alternatives.
FALSE 12. Accepting solutions that are ''good enough'' is termed satisfying.
FALSE 13. The ideal situation for making decisions is low risk.
TRUE 14. Managers regularly use their intuition in decision making.
TRUE 15. Risk is the condition in which the decision maker is able to estimate the likelihood of
certain outcomes.
3. PERT CPM

1. Which one of the following statements best describes a difference between basic PERT
and the Critical Path Method (CPM) of network analysis?

A. PERT uses probability distribution on the activity times while CPM uses point estimates
for the activity times.

B. PERT does not allow for slack times on the activities while CPM does.

C. PERT considers only activity cost while CPM considers only activity time.

D. PERT determines the least-cost path through a network while CPM determines the least-
time path through a network.

2. Critical Path Method (CPM) is a technique for analyzing, planning, and scheduling
large, complex projects by determining the critical path from a single time estimate for
each event in a project. The critical path:

A. Is the shortest path from the first event to the last event for a project?

B. Is an activity within the path that requires the most number of times?

C. Has completion that reflects the earliest time to complete the project.

D. Is the maximum amount of time an activity may be delayed without delaying the total
project beyond its target completion time

3. Pick up the correct statement from the following:

A. Program Evaluation and Review Technique, is event oriented

B. Program Evaluation and Review Technique is not event oriented

C. Critical Path Method is event oriented

D. Critical Path method is event oriented..

4. PERT analysis is based on

A. optimistic time

B. pessimistic time

C. most likely time

D. All of the above.

5. Critical path method

A. is an improvement upon bar chart method

B. provides a realistic approach to daily problems

C. avoids delays which are very common in bar charts

D. All of the above.

6. The performance of a specific task in CPM, is known

A. Dummy

B. Event

C. Activity

D. Contract.

7. The estimated time required to perform an activity, is known as

A. event

B. dummy

C. duration

D. Float.

8. If D is the duration, ES and EF are the earliest start and finish, LS and LF are latest
start and latest finish time, and then the following relation holds good

A. EF = ES + D

B. LS = LF ? D

C. LF = LS + D

D. All of the above.

9. If TL is the latest allowable event occurrence time, total activity slack(s), is equal to

A. LST-EST

B. LFT- EFT

C. TL-EFT

D. All of the above.

10. Pick up the incorrect statement from the following:

A. The activity is the time consuming part of a project

B. The beginning and end of a job, are called events

C. The activity which consumes maximum time, is called a node

D. Logically and sequentially connected activities and events form a network

11. In CPM analysis,

A. emphasis is given to activities

B. uncertainties are not allowed

C. activities are represented by arrows

D. All of the above.

12. Pick up the correct statement from the following:

A. The early start time of an activity is the maximum of the early finish times of all its
immediate predecessors

B. The sequence of the activities on the longest path in the network, is the project's
critical path

C. The procedure of finding the early start and early finish times of each of the beginning
activities, then those of their successors, their successors' successors, and so on is
called the forward pass through the network

D. All of the above

13. In a PERT network, the earliest (activity) start time is the

A. Earliest time that an activity can be finished without delaying the entire project.

B. Latest time that an activity can be started without delaying the entire project.

C. Earliest time that an activity can start without violation of precedence requirements.

D. Latest time that an activity can be finished without delaying the entire project.

14. Which of the following is one of the assumptions of PERT?

A. Total project completion time follows a normal probability distribution.

B. Activity times are dependent and correlated.

C. Project completion time follows a skewed chi-square distribution.

D. Activity times are known with certainty

15. The artificial activity which indicates that an activity following it, cannot be started
unless the preceding activity is complete, is known as:

A. Free float

B. Event

C. Dummy

D. Constant

4. Linear Programming

1. Objective of linear programming for an objective function is to

A. maximize or minimize
B. subset or proper set modeling
C. row or column modeling
D. adjacent modeling

2. For a linear programming equations, convex set of equations is included in region of

A. feasible solutions
B. disposed solutions
C. profit solutions
D. loss solutions

3. In graphical solutions of linear inequalities, solution can be divided into

A. one subset
B. two subsets
C. three subsets
D. four subsets

4. Linear programming used to optimize mathematical procedure and is

A. subset of mathematical programming
B. dimension of mathematical programming
C. linear mathematical programming
D. all of above

5. In linear programming, objective function and objective constraints are

A. solved
 B. linear
C. quadratic
D. adjacent

6. In linear programming, constraints can be represented by

A. equalities
B. inequalities
C. ratios
D. both a and b

7. One subset which satisfies inequality part of equation is graphically represented by

A. domain area of y intercept
B. range area of x intercept
C. straight line
D. shaded area around straight line

8. If there is no significant differences in item quality supplied by different sources then it

is classified as
A. homogenous
B. heterogeneous
C. indifferent items
D. different items

9. One of two subsets for solution set, one subset satisfies equality part of equation and
other subset solves
A. range part of equation
B. domain part of equation
C. equality part of equation
D. in-equality part of equation

10. For linear inequalities, solution set for a group of inequalities is classified as
A. concave set
B. convex set
C. loss set
D. profit set

11. In linear programming, lack of points for a solution set is said to

A. have no feasible solution
B. have a feasible solution
C. have single point method
D. have infinite point method

12. In maximization problem, optimal solution occurring at corner point yields the
A. mean values of z
B. highest value of z
C. lowest value of z
D. mid values of z
 13. In linear programming, oil companies used to implement resources available is classified
as
A. Implementation modeling
B. transportation models
C. oil model
D. resources modeling

14. Linear programming model which involves funds allocation of limited investment is
classified as
A. Ordination budgeting model
B. capital budgeting models
C. Funds investment models
D. funds origin models

15. In transportation models designed in linear programming, points of demand is classified

as
A. Ordination
B. transportation
C. destinations
D. origins

5. Queuing Analysis

True or False:

TRUE 1. If the customers are served in the order of their arrival, then this is known as the first-
come, first-served (FCFS) service discipline.
TRUE 2. Under Served in random order (SIRO) rule, customers are selected for service at
random, irrespective of their arrivals in the service system. In this every customer in the queue
is equally likely to be selected. The time of arrival of the customers is, therefore, of no
relevance in such a case.
FALSE 3. L = probability of exactly n customers in queuing system.
FALSE 4. Pn = expected (avg.) number of customers in queuing system. .
FALSE 5. Lt = expected (avg.) queue length (excludes customers being served) or no of
Customers.
FALSE 6. Wt = expected waiting time in system (includes service time) for each individual
customer or time a customer spends in the system.
TRUE 7. Wq = waiting time in queue (excludes service time) for each individual customer or
Expected time a customer spends in a queue.
TRUE 8. Queuing theory is the mathematical study of the congestion and delays of waiting in
line.
FALSE 9. Service mechanism is the first element of the queuing structure that relates to the
information about the arrival of the population in the system, whether they come individually or
in groups.
TRUE 10. Library counter, hotel reception are examples of Single Service Facility.
FALSE 11. In M/M/N model, the arrival times and service rates follow Markovian distribution or
exponential distribution which are probabilistic distributions.
FALSE 12. Queue model is a parameter that explains how the customers arrive at a service
facility.
TRUE 13. The difference between the earlier model and this model is the number of servers.
TRUE 14. By applying queuing theory, a business can develop more efficient queuing systems,
processes, pricing mechanisms, staffing solutions and arrival management strategies to reduce
customer wait times and increase the number of customers that can be served.
FALSE 15. The simplest arrival process is one where we have completely irregular arrivals (i.e.
the same constant time interval between successive arrivals).

6. Learning Curve

FALSE 1. Experience curves may be valid for industrial applications, but have no role in services
such as health care procedures.
FALSE 2. Experience curves are the opposite of learning curves—as one rises, the other falls.
TRUE 3. Learning curves are based on the premise that people and organizations become
better at their tasks as the tasks are repeated.
FALSE 4. The earliest application of learning curves appears in the work of architect Frank
Lloyd Wright.
FALSE 5. Learning curves can only be applied to labor.
TRUE 6. If the learning rate for a process is 100 percent, then each unit in a series of units will
have the same labor requirements.
TRUE 7. If the first unit in a series of units takes 200 days to complete, and the learning rate is
80%, then the second unit will take 160 days.
FALSE 8. An 80% learning curve means that with each unit increase in production, labor
requirements fall by 20%.
TRUE 9. A 90% learning curve implies that each time the production volume is doubled the
direct time per unit is reduced to 90% of its previous value.
TRUE 10. The learning rate in the steel industry and the learning rate in heart surgery have
both been estimated at 79 percent.
TRUE 11. A project manager bases his time and labor estimates on a learning rate of 86%. The
actual learning rate turns out to be 89%. The manager, because of the decreased learning, will
complete his project in more time and with more labor use.
TRUE 12. The learning curve may not be permanent; it can be disrupted by changes in
process, personnel, or product.
TRUE 13. Learning curves can be used to establish budgets.
FALSE 14. The arithmetic approach (or successive doubling approach) to learning curve
calculations allows us to determine the hours required for any unit.
TRUE 15. The logarithmic approach to learning curve calculations allows us to determine the
hours required for any unit.

7. Economics
1. Economics is a social science that studies the choices that individuals, businesses,
governments, and entire societies make in the presence of ____________.

A. Necessity
B. Scarcity
C. Efficiency
D. Poverty
2. Which of the following questions is an example of a microeconomic question?
A. What is the effect of an increase in the quantity of money on the price level?
B. What is the effect of a decrease in the price of chocolate chip cookies on the
quantity purchased of doughnuts?
C. What is the effect of an increase in government spending on economic growth?
D. What is the relationship between the unemployment rate and the inflation rate?

3. Which of the following questions is an example of a macroeconomic question?

A. What is the impact of the development of a vaccine against lyme disease?

B. What is the effect of a decrease in the availability of chocolate chips on the market for
chocolate chip cookies?
C. How does an increase in the price of crude oil affect the market for minivans?
D. What is the effect of an increase in the price of housing on the cost of living?

4. All of the following categories are factors of production except____________.

A. Money
B. Entrepreneurship
C. Capital
D. Land

5. __________ is the level of consumption that people enjoy, on the average, and is measured
by average income per person.

A. The cost of living

B. The business cycle
C. The standard of living
D. Profit
6. The amount of money that it takes to buy the goods and services that a typical family
consumes is ____________.

A. the cost of living

B. Income
C. the standard of living
D. Inflation

7. A business cycle can be described as ___________ followed by ___________ followed by

___________ followed by ___________.
A. an expansion, a peak, a depression, a trough
B. an inflation, a peak, a recession, a trough
C. an inflation, a peak, a deflation, a trough
D. an expansion, a peak, a recession, a trough

8. The highest valued alternative that we give up to get something is the ____________.

A. opportunity cost
B. incentive
C. marginal cost
D. marginal benefit

9. A graphical relationship between two variables that move in the same direction is
called a ____________ relationship.
A. Positive
B. Negative
C. Linear
D. Inverse

10. The slope of a straight line ____________.

A. equals the value measured on the y&axis divided by the value measured on the x&
axis
B. is constant
C. increases as the value of the variable measured on the x&axis increases
D. increases as the value of the variable measured on the x&axis decreases

11. The amount that consumers plan to buy during a given time period at a particular
price is the ____________.
A. quantity demanded
B. demand
C. quantity supplied
D. Supply

12. When the price of a good or service rises, ceteris paribus, its opportunity cost
____________.
A. falls
B. cannot be determined
C. remains the same
D. rises
13. When the price of a good rises, ceteris paribus, people cannot afford to buy all the
things they previously bought so they buy less. This is called the ____________ effect.
A. substitution
B. quantity
C. price
D. Income

14. Willingness and ability to pay is a measure of ____________.

A. efficiency
B. opportunity cost
C. marginal cost
D. marginal benefit
15. If the price of a good falls, then the demand for its complement will ___________.

A. decrease
B. remain the same
C. decrease initially and then increase
D. increase

16. A good whose demand increases as income increases is a ____________.

A. normal good
B. substitute
C. complement
D. inferior good

17. If the price of a good falls, ceteris paribus, there is a _______________ the supply curve.
A. movement down along
B. leftward shift of
C. movement up along
D. rightward shift of

18. All of the following are likely to cause an increase in the supply of beef except
____________.

A. a fall in feed grain that is fed to cattle

B. an increase in the demand for chicken
C. an increase in the number of cattle ranchers
D. an increase in the demand for leather goods

19. A market moves toward its equilibrium through adjustments in ____________.

A. Supply
B. Demand
C. Price
D. Incentives
20. In the market for chocolate chip cookies, an increase in demand will result in ___________.

A. an increase in price and a decrease in quantity

B. a decrease in both price and quantity
C. an increase in both price and quantity
D. a decrease in price and an increase in quantity