Operation Research

Assignment - A
Q1. Explain how and why operation research methods have been valuable in aiding executives decisions. Ans: OPERATIONS RESEARCH (OR) describes the discipline that is focused on the application of information technology for informed decision-making. In other words, OR represents the study of optimal resource allocation. The goal of OR is to provide rational bases for decision making by seeking to understand and structure complex situations, and to utilize this understanding to predict system behavior and improve system performance. Much of the actual work is conducted by using analytical and numerical techniques to develop and manipulate mathematical models of organizational systems that are composed of people, machines, and procedures. In OR, problems are decomposed into basic components and solved via mathematical analysis. Some of the analytical methods used in OR include mathematical logic, simulation, network analysis, queuing theory, and game theory. The actual OR process can in general be described via three steps: i) A set of potential solutions to a problem is identified and developed (the set may be rather large). ii) The alternatives derived in the first step are analyzed, and reduced to a smaller set of solutions (the solutions have to be feasible and workable). iii) The alternatives derived in the second step are subjected to simulated implementation and, if feasible, exposed to an actual analysis in a real-world environment. It has to be pointed out that in the final step, psychology and management sciences often play a rather important role. Generally speaking, OR improves the effectiveness and the efficiency of an institution, entailing some benefits, such as: Decrease Cost or Investment Increase Revenue or Return on Investment Increase Market Share Manage and Reduce Risk Improve Quality Increase Throughput while Decreasing Delays

 Achieve Improved Utilization form Limited Resources Demonstrate Feasibility and Workability OR may assist decision-makers in almost any management function, supports the key decision making process, allows to solve urgent problems, can be utilized to design improved multistep operations (processes), setup policies, supports the planning and forecasting steps, and measures actual results. OR can also be applied at the non-manager levels as well, as engineers or consumers alike can benefit from the improved and streamlined decisionmaking process. Q2. Develop a multi item deterministic inventory model for determining economic order quantity when (i)the production is assumed to be instantaneous (ii) the shortage is not allowed Ans: ECONOMIC ORDER QUANTITY (EOQ) is the number of units that a company should add to inventory with each order to minimize the total costs of inventory, such as holding costs, order costs, and shortage costs that is used as part of a continuous review inventory system, in which the level of inventory is monitored at all times, and a fixed quantity is ordered each time the inventory level reaches a specific reorder point. The EOQ provides a model for calculating the appropriate reorder point and the optimal reorder quantity to ensure the instantaneous replenishment of inventory with no shortages which can be a valuable tool for small business owners who need to make decisions about how much inventory to keep on hand, how many items to order each time, and how often to reorder to incur the lowest possible costs. The EOQ model assumes that demand is constant, and that inventory is depleted at a fixed rate until it reaches zero. At that point, a specific number of items arrive to return the inventory to its beginning level. Since the model assumes instantaneous replenishment, there are no inventory shortages or associated costs. Therefore, the cost of inventory under the EOQ model involves a tradeoff between inventory holding costs (the cost of storage, as well as the cost of tying up capital in inventory rather than investing it or using it for other purposes) and order costs (any fees associated with placing orders, such as delivery charges). Ordering a large amount at one time will increase a small business's holding costs, while making more frequent orders of fewer items will reduce holding costs but increase order costs, whereas the model finds the quantity that minimizes the sum of these costs.

The basic EOQ formula is as follows: TC = PD + HQ/2 + SD/Q where TC is the total inventory cost per year, PD is the inventory purchase cost per year (price P multiplied by demand D in units per year), H is the holding cost, Q is the order quantity, and S is the order cost (in dollars per order). Breaking down the elements of the formula further, the yearly holding cost of inventory is H multiplied by the average number of units in inventory. Since the model assumes that inventory is depleted at a constant rate, the average number of units is equal to Q/2. The total order, cost per year is S multiplied by the number of orders per year, which is equal to the annual demand divided by the number of orders, or D/Q. Finally, PD is constant, regardless of the order quantity. Taking these factors into consideration, solving for the optimal order quantity gives a formula of: HQ/2 = SD/Q, or Q = the square root of 2DS/H. The EOQ will sometimes change as a result of quantity discounts, which are provided by some suppliers as an incentive for customers to place larger orders. To determine whether it makes sense to take advantage of a quantity discount when reordering inventory, a small business owner must compute the EOQ using the formula (Q the square root of 2DS/H), compute the total cost of inventory for the EOQ and for all price break points above it, and then select the order quantity that provides the minimum total cost.
Q3. a) b) c) d) Ans: a) Pure strategy A pure strategy provides a complete definition of how a player will play a game. In particular, it determines the move a player will make for any situation he or she could face. A player's strategy set is the set of pure strategies available to that player. With pure strategies, agents possible choice rules regarding whether different buyer types will behave in the same way or in different ways at a decision making point are nite. Define the following Pure strategy Mixed Strategy Saddle point Pay-off matrix

John Forbes Nash proved that there is equilibrium for every finite game. One can divide Nash equilibria into two types: a. Pure strategy Nash equilibria involves all players playing pure strategies. b. Mixed strategy Nash equilibria involve at least one player playing mixed strategy. While Nash proved that every finite game has a Nash equilibrium, not all have pure strategy Nash equilibria. However, many games do have pure strategy Nash equilibria (e.g. the Coordination game, the Prisoner's dilemma, the Stag hunt). Further, games can have both pure strategy and mixed strategy equilibria. The existence of pure strategy Nash equilibria (PNE) is shown in the prescribed model of shopbots and pricebots, where .

It has been established that no PNE exist when prices are selected from a continuous strategy space. Here, it is assumed that prices are chosen from a strategy space that is discrete rather than continuous, deriving the set of pure strategy Nash equilibria. This set is symmetric in the case of 2 sellers, but is often asymmetric in the case of S > 2 sellers. b) Mixed Strategy A mixed strategy is an assignment of a probability to each pure strategy which allows a player to randomly select a pure strategy. Since probabilities are continuous, there are infinitely many mixed strategies available to a player, even if their strategy set is finite. One can also regard a pure strategy as a degenerate case of a mixed strategy, in which that particular pure strategy is selected with probability 1 and every other strategy with probability 0. A totally mixed strategy is a mixed strategy in which the player assigns a strictly positive probability to every pure strategy. In the theory of games a player is said to use a mixed strategy whenever he or she chooses to randomize over the set of available actions. Formally, a mixed strategy is a probability distribution that assigns to each available action a likelihood of being selected. If only one action has a positive probability of being selected, the player is said to use a pure strategy.

To illustrate, one can consider the childrens game Matching Pennies, in which each of two players can choose either heads (H) or tails (T); player 1 wins a dollar from player 2 if their choices match and loses a dollar to player 2 if they do not. This game can be represented as follows: Here player 1s choice determines a row, player 2s choice determines a column, and the corresponding cell indicates the payoffs to players 1 and 2 in that order. This game has a unique Nash equilibrium that requires each player to choose each action with probability one-half. Another example is provided by the Hawk-Dove game, which has been used by evolutionary biologists to model animal conflicts: In this game any strategy profile in which one player chooses H and the other picks D is in equilibrium. Hence, there are two pure strategy equilibria, (H,D) and (D,H). In addition, there is a mixed strategy equilibrium in which each player selects H with probability 2/3. c) Saddle point In mathematics, a saddle point is a point in the domain of a function that is a stationary point, derived from the fact that in two dimensions the surface resembles a saddle that curves up in one direction, and curves down in a different direction (like a horse saddle or a mountain pass). In terms of contour lines, a saddle point can be recognized, in general, by a contour that appears to intersect itself like, two hills separated by a high pass will show up a saddle point, at the top of the pass, like a figure-eight contour line. A simple criterion for checking if a given stationary point of a realvalued function F(x,y) of two real variables is a saddle point is to compute the function's Hessian matrix at that point: if the Hessian is indefinite, then that point is a saddle point. For example, the Hessian matrix of the function z = x2 y2 at the stationary point (0,0) is the matrix which is indefinite. Therefore, this point is a saddle point. This criterion gives only a sufficient condition. For example, the point (0,0) is a saddle point for the function z = x4 y4, but the Hessian matrix of this function at the origin is the null matrix, which is not indefinite. In the most general terms, a saddle point for a smooth function (whose graph is a curve, surface or hypersurface) is a stationary

point such that the curve/surface/etc. in the neighborhood of that point is not entirely on any side of the tangent space at that point. In dynamical systems, a saddle point is a periodic point where stable and unstable manifolds have a dimension that is not zero. If the dynamic is given by a differentiable map f then a point is hyperbolic if and only if the differential of n (where n is the period of the point) has no eigenvalue on the (complex) unit circle when computed at the point. d) Pay-off matrix The Payoff Matrix is an expression of the First Law of Decision Science wherein each row represents one action that the decision maker might or might not freely choose to perform and each column represents a possible state of nature. At the time the decision must be made, the decision maker assumes that one of the columns represents the actual decision situation, but does not know which column is the correct one. The cells of the matrix represent payoffs that the decision maker would receive the action chosen which is represented by a particular row and the actual state of nature were the one represented by a particular column. Two Kinds of "Easy" Decisions a) Certainty: When a decision is made under the assumption of certainty, considering one state of nature to be possible; the payoff matrix has only one column of payoffs, and the best decision is the one with the best payoff. b) Stochastic Dominance: If action A has a better payoff than action B under each individual state of nature, then it is said that action B is stochastically dominated by action A. If the payoff matrix truly represents everything the decision maker hopes (or fears) to receive from the decision in question, then no rational decision maker will ever choose to perform action B. The payoff matrix assigns each alternative action a row of possible payoffs. A decision rule converts this row of payoffs into a single number that somehow represents the whole row. Once this is done, it is easy to pick the alternative action whose representative number is better than the other alternative actions' representative numbers. Several decision rules exist, wherein each has a different way to convert a row of possible payoffs into a single representative number, such as:

 the simple average of the possible payoffs for an alternative actions; the worst possible payoff for an alternative action; the best possible payoff for an alternative action; the statistical expectation of the possible payoffs for an alternative action; the maximum possible regret for an alternative action; the statistical expectation of the possible regrets for an alternative action. Q4. Define simplex method of linear programming with an example.

Ans: Simplex method is considered one of the basic techniques from which many linear programming techniques are directly or indirectly derived. The simplex method is an iterative, stepwise process which approaches an optimum solution in order to reach an objective function of maximization or minimization. Matrix algebra provides the deterministic working tools from which the simplex method was developed, requiring mathematical formulation in describing the problem. An example can help us explain the simplex method in detail. Example of Linear Programming Simplex Method: Assume that a small machine shop manufactures two models, standard and deluxe. Each standard model requires two hours of grinding and four hours of polishing; each deluxe module requires five hours of grinding and two hours of polishing. The manufacturer has three grinders and two polishers. Therefore in 40 hours week there are 120 hours of grinding capacity and 80 hours of polishing capacity. There is a contribution margin of $3 on each standard model and $4 on each deluxe model. Before the simplex method can be applied, the following steps must be taken: The relationship which establish the constraints or inequalities must be set up first. Letting x and y be respectively the quantity of items of the standard model and deluxe model that are to be manufactured, the system of inequalities or the set of constraints: 2x + 5y 120 4x + 2y 80 Both x and y must be positive values or zero (x 0; y 0). Although this illustration involves only less-than-or-equal-to type constraints, equal-to and greater-than-or-equal-to type constraints can be encountered in maximization problems. The objective function is the total contribution margin the manager can obtain from the two models. A contribution margin of $3 is expected for each standard

model and $4 for each deluxe model. The objective function is CM = 3x + 4y. The problem is now completely described by mathematical notation. The first tow steps are the same for the graphic method, the simplex method requires the use of equations, in contrast to the inequalities used by the graphic method. Therefore the set of inequalities (to-less-than-or-equal-to type constraints) must be transformed into a set of equations by introducing slack variables, s1 and s2. The use of slack variables involves the addition of an arbitrary variable to one side of the inequality, transforming it into an equality. This arbitrary variable is called a slack variable, since it takes up the slack in the inequality. The inequalities rewritten as equalities are: 2x + 5y + s1 = 120 4x + 2y + s2 = 80 The unit contribution margins of the fictitious products s1 and s2 are zero, and the objective equation becomes: Maximize: CM = 3x + 4y + 0s1 + 0s2 At this point, the simplex method can be applied and the first matrix or tableau can be set up as shown below:

MIX 0 0 s1 s2

0 Quantity 120 80 0

3 x 2 4 -3

4 y 5 2 -4

0 s1 1 0 0

0 s2 0 1 0

Objective Row Variable Row Problem Rows Index Row

Quantity Column

Variable ObjectiveColumn Column

Q5. What do you understand by the transportation problem? What is the basic assumption behind the transportation problem? Describe any method of solving transportation problem. Ans: A typical transportation problem deals with sources where a supply of some commodity is available and destinations where the commodity is demanded. The classic statement of the transportation problem uses a matrix with the rows representing sources and columns representing destinations. The algorithms for solving the problem are based on a matrix representation, as shown below. The costs of shipping from sources to destinations are indicated by the entries in the matrix. If shipment is impossible between a given source and destination, a large cost of M is entered. This discourages the solution from using such cells. Supplies and demands are shown along the margins of the matrix. As in the example, the classic transportation problem has total supply equal to total demand.

MATRIX MODEL OF A TRANSPORTATION PROBLEM The network model of the transportation problem is shown in the following figure, wherein sources are identified as the nodes on the left and destinations on the right. Allowable shipping links are shown as arcs, while disallowed links are not included.

NETWORK FLOW MODEL OF THE TRANSPORTATION PROBLEM Only arc costs are shown in the network model, as these are the only relevant parameters. All other parameters are set to the default values. The network has a special form important in graph theory which is called a bipartite network since the nodes can be divided into two parts with all arcs going from one part to the other. On each supply node the positive external flow indicates supply flow entering the network. On each destination node a demand is a negative fixed external flow indicating that this amount must leave the network. The optimum solution for the example is shown in the figure below:

OPTIMUM SOLUTION, Z = 46 Variations of the classical transportation problem are easily handled by modifications of the network model. If links have finite capacity, the arc upper bounds can be made finite and if supplies represent raw materials that are transformed into products at the sources and the demands are in units of product, the gain factors can be used to represent transformation efficiency at each source. Whereas, if some minimal flow is required in certain links, the arc lower bounds can be set to nonzero values.

Assignment - B
Q1. What do you understand by queue? Give some important application of queuing theory. Ans: QUEUE, commonly pronounced as /kju/ kew, is a particular kind of collection in which the entities in the collection are kept in order and the principal, or only operations on the collection are the addition of entities to the rear terminal position and removal of entities from the front terminal position. This makes the queue a First-In-First-Out (FIFO) data structure by which, the first element added to the queue will be the first one to be removed. This is equivalent to the requirement that once an element is added, all elements that were added before have to be removed before the new element can be invoked. The defining attribute of a queue data structure is the fact that allows access to only the front and back of the structure. Furthermore, elements can only be removed from the front and can only be added to the back. QUEUING THEORY is the mathematical study of waiting lines, or queues. The theory enables mathematical analysis of several related processes, including arriving at the (back of the) queue, waiting in the queue (essentially a storage process), and being served at the front of the queue. The theory permits the derivation and calculation of several performance measures including the average waiting time in the queue or the system, the expected number waiting or receiving service, and the probability of encountering the system in certain states, such as empty, full, having an available server or having to wait a certain time to be served. Queuing theory has applications in diverse fields, including telecommunications, traffic engineering, computing and the design of factories, shops, offices and hospitals, generally considered a branch of operations research because the results are often used when making business decisions about the resources needed to provide service. It is applicable in a wide variety of situations that may be encountered in business, commerce, industry, healthcare, public service and engineering, also frequently encountered in customer service situations as well as transport and telecommunication. Q2. Describe a method to obtain an initial feasible solution for a transportation problem.

Ans: There are three different methods to obtain the initial basic feasible solution via: 1) NORTH-WEST CORNER RULE Step (1): The first assignment is made in the cell occupying the upper lefthand (North West) corner of the transportation table. The maximum feasible amount is allocated there, i.e; x11 = min( a1, b1 ) . Step (2): If b1 > a1, the capacity of origin O1 is exhausted but the requirement at D1 is not satisfied. So move downs to the second row, and make the second allocation: x21 = min ( a2 , b1 x11 ) in the cell ( 2,1 ). If a1 > b1 , allocate x12 = min ( a1 - x11 , b2 ) in the cell ( 1,2) . Continue this until all the requirements and supplies are satisfied. 2) LOWEST COST ENTRY METHOD: This method starts with the lowest cost position. 3) VOGEL S APPROXIMATION METHOD: Step 1: For each row of the transportation table, identify the smallest and the next to-smallest costs. Determine the difference between them for each row. Display them alongside the transportation table by enclosing them in parenthesis against the respective rows. Similarly compute the differences for each column. Step 2: Identify the row or column with the largest difference among all the rows and columns. If a tie occurs, use any arbitrary tie breaking choice. Let the greatest difference correspond to ith row and the minimum cost be Cij. Allocate a maximum feasible amount xij = min (ai , bj ) in the (i, j)th cell, and cross off the ith row or jth column. Step 3: Re compute the column and row differences for the reduced transportation table and go to step 2. Repeat the procedure until all the rim requirements are satisfied. After calculating the cost of transportation by the above three methods, one thing is clear that Vogels approximation method gives an initial basic feasible solution which is much closer to the optimal solution than the other two methods. It is always worthwhile to spend some time finding a good initial solution because it can considerably reduce the total number of iterations required to reach an optimal solution. Once the initial feasible solution is reached, the next step is to check the optimality. An optimal solution is one where there is no other set of

transportation routes transportation cost.

(allocations)

that

will

further

reduce

the

total

Thus, there is a need to evaluate each unoccupied cell (represents unused routes) in the transportation table in terms of an opportunity of reducing total transportation cost. Q3.
(1) The Sanders Garden Shop mixes two types of grass seed into a blend. Each type of grass has been rated (per pound) according to its shade tolerance, ability to stand up to traffic, and drought resistance, as shown in the table. Type A seed costs $1 and Type B seed costs $2. If the blend needs to score at least 300 points for shade tolerance, 400 points for traffic resistance, and 750 points for drought resistance, how many pounds of each seed should be in the blend? Which targets will be exceeded? How much will the blend cost? Shade Tolerance Traffic Resistance Drought Resistance Type A 1 2 2 Type B 1 1 5

Ans: Let x is the quantity of Type A seed, y - of Type B in the mixture. I suppose the goal is to minimize the
cost (as in the popular Diet Problem - follow the link in Sources below for more information), then we'll have the following linear programming problem: Minimize { Cost = x + 2y } subject to constraints: x 0, y 0, x + y 300; 2x + y 400; 2x + 5y 750 The feasible region is an open domain - part of the 1st quadrant (open up-right) - with corner points (375, 0), (250, 50), (100, 200) and (0, 300). The minimum is attained in the second vertex, so the optimal solution is Minimum_Cost = 350, x = 250, y = 50, the constraint 2x + y 400 is exceeded by 150.

(2) Lakewood Fashions must decide how many lots of assorted ski wear to order for its three
stores. Information on pricing, sales, and inventory costs has led to the following payoff table, in thousands. Order Size 1 lot Low 12 Demand Medium 15 High 15

2 lots 3 lots a. b. c.

9 6

25 35

35 60

What decision should be made by the optimist? What decision should be made by the conservative? What decision should be made using minimax regret?

ANS: a. b. c. 3 lots 1 lot 3 lots

Regret table: Order Size 1 lot 2 lots 3 lots PTS: 1 Low 0 3 6 Demand Medium 20 10 0 High 45 25 0 Maximum Regret 45 25 6

TOP: Decision making without probabilities

Assignment - C (Q1 to Q15 - answer in TRUE or FALSE) 1. Ans: The process of decision making is more limited than that of problem solving. True

2. The terms 'stochastic' and 'deterministic' have the same meaning in quantitative analysis. Ans: False 3. Ans: The volume that results in marginal revenue equaling marginal cost is called the breakeven point. False

4. Problem solving encompasses both the identification of a problem and the action to resolve it. Ans: True 5. Ans: 6. Ans: The decision making process includes implementation and evaluation of the decision. False The most successful quantitative analysis will separate the analyst from the managerial team until after the problem is fully structured. False

7. The value of any model is that it enables the user to make inferences about the real situation. Ans: True 8. Ans: 9. Ans: 10. Ans: Uncontrollable inputs are the decision variables for a model. False The feasible solution is the best solution possible for a mathematical model. False A company seeks to maximize profit subject to limited availability of man-hours. Manhours is a controllable input. False

11. Frederick Taylor is credited with forming the first MS/OR interdisciplinary teams in the 1940's. Ans: False 12. Ans: 13. Ans: 14. To find the choice that provides the highest profit and the fewest employees, apply a single-criterion decision process. False The most critical component in determining the success or failure of any quantitative approach to decision making is problem definition. True The first step in the decision making process is to identify the problem.

Ans: 15. Ans:

True All uncontrollable inputs or data must be specified before we can analyze the model and recommend a decision or solution for the problem. True

16 . Which of the following is a valid objective function for a linear programming problem? a. Max 5xy b. Min 4x + 3y + (2/3)z c. Max 5x2 + 6y2 d. Min (x1 + x2)/x3 17. A negative dual price for a constraint in a minimization problem means a. as the right-hand side increases, the objective function value will increase. b. as the right-hand side decreases, the objective function value will increase. c. as the right-hand side increases, the objective function value will decrease. d. as the right-hand side decreases, the objective function value will decrease. 18. Infeasibility means that the number of solutions to the linear programming models that satisfies all constraints is a. at least 1. b. 0. c. an infinite number. d. at least 2. 19. A marketing research application uses the variable HD to represent the number of homeowners interviewed during the day. The objective function minimizes the cost of interviewing this and other categories and there is a constraint that HD 100. The solution indicates that interviewing another homeowner during the day will increase costs by 10.00. What do you know? a. the objective function coefficient of HD is 10. b. the dual price for the HD constraint is 10. c. the objective function coefficient of HD is --10. d. the dual price for the HD constraint is -- 10. 20 . For a two-person, zero-sum, mixed-strategy game, it is necessary to solve the LP for only one of the players to learn the optimal strategies for both players. a. 1. b. the number of operating units. c. 100. d. any arbitrary value. 21. For a two-person, zero-sum, mixed-strategy game, each player selects its strategy according to a. what strategy the other player used last. b. a fixed rotation of strategies. c. a probability distribution. d. the outcome of the previous game. 22. The assignment problem constraint x31 + x32 + x33 + x34 2 means a. agent 3 can be assigned to 2 tasks. b. agent 2 can be assigned to 3 tasks. c. a mixture of agents 1, 2, 3, and 4 will be assigned to tasks.

d. there is no feasible solution. 23. The difference between the transportation and assignment problems is that a. total supply must equal total demand in the transportation problem b. the number of origins must equal the number of destinations in the transportation problem c. each supply and demand value is 1 in the assignment problem d. there are many differences between the transportation and assignment problems 24. Consider a shortest route problem in which a bank courier must travel between branches and the main operations center. When represented with a network, a. the branches are the arcs and the operations center is the node. b. the branches are the nodes and the operations center is the source. c. the branches and the operations center are all nodes and the streets are the arcs. d. the branches are the network and the operations center is the node. 25. Activities G, P, and R are the immediate predecessors for activity W. If the earliest finish times for the three are 12, 15, and 10, then the earliest start time for W a. is 10. b. is 12. c. is 15. d. cannot be determined. 26. For an activity with more than one immediate successor activity, its latest-finish time is equal to the a. largest latest-finish time among its immediate successors. b. smallest latest-finish time among its immediate successors. c. largest latest-start time among its immediate successors. d. smallest latest-start time among its immediate successors. 27. The economic production lot size model is appropriate when a. demand exceeds the production rate. b. there is a constant supply rate for every period, without pause. c. ordering cost is equivalent to the production setup cost. d. All of the alternatives are correct. 28. Annual purchase cost is included in the total cost in a. the EOQ model. b. the economic production lot size model. c. the quantity discount model. d. all inventory models. 29. Inventory position is defined as a. the amount of inventory on hand in excess of expected demand. b. the amount of inventory on hand. c. the amount of inventory on hand plus the amount of inventory on order. d. None of the alternatives is correct. 30. which of the following relationships is incorrect? a. As the order quantity increases, the number of orders placed annually decreases. b. As the order quantity increases, annual holding cost increases. c. As the order quantity increases, annual ordering cost increases.

d. As the order quantity increases, average inventory increases. 31. In a waiting line situation, arrivals occur, on average, every 10 minutes, and 10 units can be received every hour. What are and ? a. = 10, = 10 b. = 6, = 6 c. = 6, = 10 d. = 10, = 6 32. The arrival rate in queuing formulas is expressed as a. the mean time between arrivals. b. the minimum number of arrivals per time period. c. the mean number of arrivals per channel. d. the mean number of arrivals per time period. 33. For many waiting line situations, the arrivals occur randomly and independently of other arrivals and it has been found that a good description of the arrival pattern is provided by a. a normal probability distribution. b. an exponential probability distribution. c. a uniform probability distribution. d. a Poisson probability distribution. 34. Making a good decision a. requires probabilities for all states of nature. b. requires a clear understanding of decision alternatives, states of nature, and payoffs. c. implies that a desirable outcome will occur. d. All of the alternatives are true. 35. Algebraic methods such as the simplex method are used to solve a. nonlinear programming problems. b. any size linear programming problem. c. programming problems under uncertainty. d. graphical models. 36. A basic solution and a basic feasible solution a. are the same thing. b. differ in the number of variables allowed to be zero. c. describe interior points and exterior points, respectively. d. differ in their inclusion of nonnegativity restrictions. 37. In the simplex method, a tableau is optimal only if all the cj zj values are a. zero or negative. b. zero. c. negative and nonzero. d. positive and nonzero. 38. The stepping-stone method requires that one or more artificially occupied cells with a flow of zero be created in the transportation tableau when the number of occupied cells is fewer than a. m + n 2 b. m + n 1 c. m + n

d. m + n + 1 39. Using the transportation simplex method, the optimal solution to the transportation problem has been found when a. there is a shipment in every cell. b. more than one stepping-stone path is available. c. there is a tie for outgoing cell. d. the net evaluation index for each unoccupied cell is 0. 40. When there is a tie between two or more variables for removal from the simplex tableau, a. post-optimality analysis is required. b. their dual prices will be equal. c. converting the pivot element will break the tie. d. a condition of degeneracy is present.