### Supply and demand

Assignment Help Financial Management
##### Reference no: EM131168

1) Assume that you have tried three different forecasting models. For the first, the MAD = 2.5, for the second, the MSE = 10.5, and for the third, the MAPE = 2.7. We can then say:
A) the third method is the best.
B) the second method is the best.
C) methods one and three are preferable to method two.
D) method two is least preferred.
E) None of the above

2) Sales for boxes of Girl Scout cookies over a 4-month period were forecasted as follows: 100, 120, 115, and 123. The actual results over the 4-month period were as follows: 110, 114, 119, 115. What was the MAD of the 4-month forecast?
A) 0
B) 5
C) 7
D) 108
E) None of the above

3) Mark Achin sells 3,600 electric motors each year. The cost of these is \$200 each, and demand is constant throughout the year. The cost of placing an order is \$40, while the holding cost is \$20 per unit per year. There are 360 working days per year and the lead-time is 5 days. If Mark orders 200 units each time he places an order, what would his total ordering cost be for the year?
A) \$2,000
B) \$2,720
C) \$200
D) \$720
E) None of the above

4) The annual demand for a product has been projected at 2,000 units. This demand is assumed to be constant throughout the year. The ordering cost is \$20 per order, and the holding cost is 20 percent of the purchase cost. The purchase cost is \$40 per unit. There are 250 working days per year. Currently, the company is ordering 500 units each time an order is placed. Assuming the company uses a safety stock of 20 units resulting in a reorder point of 60 units, what is the expected lead-time for delivery?
A) 4 days
B) 5 days
C) 6 days
D) 7 days
E) None of the above

5) R. C. Barker makes purchasing decisions for his company. One product that he buys costs \$50 per unit when the order quantity is less than 500. When the quantity ordered is 500 or more, the price per unit drops to \$48. The ordering cost is \$30 per order and the annual demand is 7,500 units. The holding cost is 10 percent of the purchase cost. If R. C. orders 500 units each time he places an order, what would the total annual holding cost be?
A) \$450
B) \$1,200
C) \$1,250
D) \$2,400
E) None of the above

6) Andre Candess manages an office supply store. One product in the store is computer paper. Andre knows that 10,000 boxes will be sold this year at a constant rate throughout the year. There are 250 working days per year and the lead-time is 3 days. The cost of placing an order is \$30, while the holding cost is \$15 per box per year. How many units should Andre order each time?
A) 200
B) 400
C) 500
D) 100
E) None of the above

7) Daniel Trumpe has computed the EOQ for a product he sells to be 400 units. However, due to recent events he has a cash flow problem. Therefore, he orders only 100 units each time he places an order. Which of the following is true for this situation?
A) Annual ordering cost will be lower than annual holding cost.
B) Annual ordering cost will be higher than annual holding cost.
C) Annual ordering cost will equal annual holding cost.
D) Annual ordering cost will be unaffected by the order policy change.

8) Judith Thompson, the manager of the student center cafeteria, has added pizza to the menu. The pizza is ordered frozen from a local pizza establishment and baked at the cafeteria. Judith anticipates a weekly demand of 10 pizzas. The cafeteria is open 45 weeks a year, 5 days a week. The ordering cost if \$15 and the holding cost is \$0.40 per pizza per year. The pizza vendor has a 4-day lead-time and Judith wants to maintain 1 pizza for safety stock. What is the optimal reorder point?
A) 10
B) 8
C) 4
D) 9
E) None of the above

9) Consider the material structure tree for item A below. If 20 units of A are needed, how many units of D are needed?

A) 11
B) 30
C) 160
D) 60
E) 220

10) The demand during the lead-time is normally distributed with a mean of 40 and a standard deviation of 4. If the company wishes to maintain a 90 percent service level, how much safety stock should be held?
A) 45.12
B) 41.28
C) 1.28
D) 5.12
E) None of the above

11) Consider the following linear programming problem:

Which of the following points (X,Y) is not a feasible corner point?
A) (0,60)
B) (105,0)
C) (120,0)
D) (100,10)
E) None of the above

12) Consider the following linear programming problem:

What is the optimum solution to this problem (X,Y)?
A) (0,0)
B) (50,0)
C) (0,100)
D) (400,0)
E) None of the above

13) When using a general LP model for transportation problems, if there are 4 sources and 3 destinations, which of the following statements is true?
A) There are typically 4 decision variables and 3 constraints.
B) There are typically 12 decision variables and 7 constraints.
C) There are typically 7 decision variables and 7 constraints.
D) There are typically 12 decision variables and 12 constraints.
E) There are typically 12 decision variables and 3 constraints.

14) Which of the following statements concerning the transshipment problem are false?
A) The number of units shipped into a transshipment point should be equal to the number of units shipped out.
B) There can be constraints on the number of units shipped out of an origin point.
C) There can be constraints on the number of units shipped into a destination point.
D) The transshipment problem can be solved with linear programming.
E) Any units shipped from one origin point must all go to the same destination point.

15) What is said to exist when total demand equals total supply in a transportation problem?
A) an equalized problem
B) an equilibrialized problem
C) a harmonized problem
D) a balanced problem
E) This situation can never occur.

16) A company must assign mechanics to each of four jobs. The time involved varies according to individual abilities. Table 30 shows how many minutes it takes each mechanic to perform each job. If the optimal assignments are made, how many total minutes would be required for completing the jobs?
A) 0
B) 4
C) 17
D) 16
E) None of the above

17) Given Table 31, the final table for an assignment problem, who should be assigned to job 2?
A) worker A
B) worker C
C) either worker A or worker C
D) neither worker A nor worker C
E) worker D

18) Formulate the transportation problem shown in the transportation table below as a standard form linear programming problem (meaning of variables, objective function, and constraints).

19) You can solve the problem, using the software. Show the solution on your answer sheet. Your solution should be expressed in the form of complete English statements.

20) Formulate the assignment problem shown in Table 30 (Question 30 above) as a standard form linear programming problem. Show your formulation at the bottom of your answer sheet.

21) Solve the problem. You can use software. Show the solution on your answer sheet. Your solution should be expressed in the form of complete English statements.

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