Test Bank For Applied Management Science: Modeling, Spreadsheet Analysis, and Communication for Decision Making, 2nd Edition 2nd Editionpdf download
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Test Bank For Applied Management
Science: Modeling, Spreadsheet Analysis,
and Communication for Decision Making,
2nd Edition 2nd Edition
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applied-management-science-modeling-spreadsheet-analysis-and-
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CHAPTER 1
INTRODUCTION TO MANAGEMENT SCIENCE MODELS
TRUE/FALSE QUESTIONS
(d, easy)
a. Gene Woolsey.
b. N. Karmarkar.
c. A. A. Markov.
d. George Dantzig
(d, medium)
(a, medium)
a. functional constraints.
b. non-negativity requirements.
c. management preferences.
d. boundary restrictions.
(c, easy)
(a, medium)
6. Profit maximization will yield the same result as cost
minimization when:
(d, easy)
(c, difficult)
a. non-negativity constraints.
b. boundary (upper or lower) constraints.
c. integer constraints.
d. resource constraints.
(d, easy)
a. actual data.
b. generic symbols.
c. both actual data and generic symbols.
d. neither actual data nor generic symbols.
(b, medium)
(d, medium)
(c, difficult)
12. At what state in the management science process should the
operating personnel, who are responsible for solution
implementation, first be consulted?
a. Problem definition.
b. Mathematical modeling.
c. Solution of the model.
d. Communication/marketing of results.
(a, easy)
(b, medium)
a. simulation.
b. queuing.
c. decision analysis.
d. internet programming.
(d, easy)
(d, easy)
a. Andrey A. Markov
b. E. K. Erlang
c. Jon von Neuman
d. N. Karmarkar
(c, easy)
a. Problem definition.
b. Data gathering.
c. Constructing a model shell.
d. Quantifying the objective and constraints.
(a, easy)
18. Which executive reaction to your management science solution
would suggest the model is invalid?
(b, medium)
19. Which Excel function finds the value X such that 55% of the
probability lies below X from a normal distribution with mean
= 20 and standard deviation = 3?
a. NORMDIST(.55,20,3,TRUE)
b. NORMSDIST(.55,20,3)
c. NORMINV(.55,20,3)
d. NORMSINV(.55,20,3)
(c, easy)
20. Which Excel data analysis tool returns the p-value for the F-
test?
a. Descriptive Statistics.
b. Regression.
c. Exponential Smoothing.
d. ANOVA.
(b, medium)
SHORT ANSWER QUESTIONS
(Model shells define the model before actual data are gathered.
Building a model shell guides the decision maker as to what kind of
data to seek and the relative accuracy required of the data. Once
the appropriate data has been determined, actual numbers replace the
parametric unknowns in the model and the model is solved.) (medium)
(Check assumptions.
Check data.
Modify approximations.
Add constraints.
Develop an entirely new model.) (medium)
D Direct Mail
P Newspaper Ad
M Movies
T Television
R Radio
S Roadsigns
(MAX XD + XP + X M + XT + XR + XS
ST DXD + PXP + MXM + TXT + RXR + SXS Z
XR A
XT B
XD + XP + X M + XS C
XD, XP, XM, XT, XR, XS 0) (medium)
This is the last that was heard of that so much vaunted Congress
of American nations, and in the manner in which it died out of itself,
among those who proposed it, without ever having been reached by
a minister from the United States, we have the highest confirmation
of the soundness of the objections taken to it by the opposition
members of the two Houses of our Congress.
In stating the condition of the finances, the message, without
intending it, gave proof of the paradoxical proposition, first, I
believe, broached by myself, that an annual revenue to the extent of
a fourth or a fifth below the annual expenditure, is sufficient to meet
that annual expenditure; and consequently that there is no necessity
to levy as much as is expended, or to provide by law for keeping a
certain amount in the treasury when the receipts are equal, or
superior to the expenditure. He said:
"The balance in the treasury on the first of January last was
six millions three hundred and fifty-eight thousand six hundred
and eighty-six dollars and eighteen cents. The receipts from that
day to the 30th of September last, as near as the returns of
them yet received can show, amount to sixteen millions eight
hundred and eighty-six thousand five hundred and eighty-one
dollars and thirty-two cents. The receipts of the present quarter,
estimated at four millions five hundred and fifteen thousand,
added to the above, form an aggregate of twenty-one millions
four hundred thousand dollars of receipts. The expenditures of
the year may perhaps amount to twenty-two millions three
hundred thousand dollars, presenting a small excess over the
receipts. But of these twenty-two millions, upwards of six have
been applied to the discharge of the principal of the public debt;
the whole amount of which, approaching seventy-four millions
on the first of January last, will on the first day of next year fall
short of sixty-seven millions and a half. The balance in the
treasury on the first of January next, it is expected, will exceed
five millions four hundred and fifty thousand dollars; a sum
exceeding that of the first of January, 1825, though falling short
of that exhibited on the first of January last."
Thus, this tariff bill, like every one admitting a variety of items,
contains a vicious principle, by which a majority may be made up to
pass a measure which they do not approve. But besides variety of
agricultural and manufacturing items collected into this bill, there
was another of very different import admitted into it, namely, that of
party politics. A presidential election was approaching: General
Jackson and Mr. Adams were the candidates—the latter in favor of
the "American System"—of which Mr. Clay (his Secretary of State)
was the champion, and indissolubly connected with him in the public
mind in the issue of the election. This tariff was made an
administration measure, and became an issue in the canvass; and to
this Mr. Rowan significantly alluded when he spoke of a tariff as
being "perverted by the ambition of political aspirants." It was in
vain that the manufacturers were warned not to mix their interests
with the doubtful game of politics. They yielded to the temptation—
yielded as a class, though with individual exceptions—for the sake of
the temporary benefit, without seeming to realize the danger of
connecting their interests with the fortunes of a political party. This
tariff of '28, besides being remarkable for giving birth to
"nullification," and heart-burning between the North and the South,
was also remarkable for a change of policy in the New England
States, in relation to the protective system. Being strongly
commercial, these States had hitherto favored free trade; and Mr.
Webster was the champion of that trade up to 1824. At this session
a majority of those States, and especially those which classed
politically with Mr. Adams and Mr. Clay, changed their policy: and
Webster became a champion of the protective system. The cause of
this change, as then alleged, was the fact that the protective system
had become the established policy of the government, and that
these States had adapted their industry to it; though it was insisted,
on the other hand, that political calculation had more to do with the
change than federal legislation: and, in fact, the question of this
protection was one of those which lay at the foundation of parties,
and was advocated by General Hamilton in one of his celebrated
reports of fifty years ago. But on this point it is right that New
England should speak for herself, which she did at the time of the
discussion of the tariff in '28; and through the member, now a
senator (Mr. Webster), who typified in his own person the change
which his section of the Union had undergone. He said:
"New England, sir, has not been a leader in this policy. On the
contrary, she held back, herself, and tried to hold others back
from it, from the adoption of the constitution to 1824. Up to
1824, she was accused of sinister and selfish designs, because
she discountenanced the progress of this policy. It was laid to
her charge, then, that having established her manufactures
herself, she wished that others should not have the power of
rivalling her; and, for that reason, opposed all legislative
encouragement. Under this angry denunciation against her, the
act of 1824 passed. Now the imputation is precisely of an
opposite character. The present measure is pronounced to be
exclusively for the benefit of New England; to be brought
forward by her agency, and designed to gratify the cupidity of
her wealthy establishments.
"Both charges, sir, are equally without the slightest
foundation. The opinion of New England, up to 1824, was
founded in the conviction, that, on the whole, it was wisest and
best, both for herself and others, that manufacturers should
make haste slowly. She felt a reluctance to trust great interests
on the foundation of government patronage; for who could tell
how long such patronage would last, or with what steadiness,
skill, or perseverance, it would continue to be granted? It is now
nearly fifteen years, since, among the first things which I ever
ventured to say here, was the expression of a serious doubt,
whether this government was fitted by its construction, to
administer aid and protection to particular pursuits; whether,
having called such pursuits into being by indications of its favor,
it would not, afterwards, desert them, when troubles come
upon them; and leave them to their fate. Whether this
prediction, the result, certainly, of chance, and not of sagacity,
will so soon be fulfilled, remains to be seen.
"At the same time it is true, that from the very first
commencement of the government, those who have
administered its concerns have held a tone of encouragement
and invitation towards those who should embark in
manufactures. All the Presidents, I believe, without exception,
have concurred in this general sentiment; and the very first act
of Congress, laying duties of impost, adopted the then unusual
expedient of a preamble, apparently for little other purpose than
that of declaring, that the duties, which it imposed, were
imposed for the encouragement and protection of
manufactures. When, at the commencement of the late war,
duties were doubled, we were told that we should find a
mitigation of the weight of taxation in the new aid and succor
which would be thus afforded to our own manufacturing labor.
Like arguments were urged, and prevailed, but not by the aid of
New England votes, when the tariff was afterwards arranged at
the close of the war, in 1816. Finally, after a whole winter's
deliberation, the act of 1824 received the sanction of both
Houses of Congress, and settled the policy of the country. What,
then, was New England to do? She was fitted for manufacturing
operations, by the amount and character of her population, by
her capital, by the vigor and energy of her free labor, by the
skill, economy, enterprise, and perseverance of her people. I
repeat, what was she, under these circumstances, to do? A
great and prosperous rival in her near neighborhood,
threatening to draw from her a part, perhaps a great part, of
her foreign commerce; was she to use, or to neglect, those
other means of seeking her own prosperity which belonged to
her character and her condition? Was she to hold out, forever,
against the course of the government, and see herself losing, on
one side, and yet making no efforts to sustain herself on the
other? No, sir. Nothing was left to New England, after the act of
1824, but to conform herself to the will of others. Nothing was
left to her, but to consider that the government had fixed and
determined its own policy; and that policy was protection."
The proposition for this duty on imported indigo did not prevail. In
lieu of the amount proposed, and which was less than any protective
duty in the bill, the friends of the "American System" (constituting a
majority of the Senate) substituted a nominal duty of five cents on
the pound—to be increased five cents annually for ten years—and to
remain at fifty. This was only about twenty per centum on the cost
of the article, and that only to be attained after a progression of ten
years; while all other duties in the bill were from four to ten times
that amount—and to take effect immediately. A duty so
contemptible, so out of proportion to the other provisions of the bill,
and doled out in such miserable drops, was a mockery and insult;
and so viewed by the southern members. It increased the
odiousness of the bill, by showing that the southern section of the
Union was only included in the "American System" for its burdens,
and not for its benefits. Mr. McDuffie, in the House of
Representatives, inveighed bitterly against it, and spoke the general
feeling of the Southern States when he said:
"Lands sell at the current rate, and nothing can sell for more.
But be the price what it may; a great object is always answered,
whenever any property is transferred from hands which are not
fit for that property, to those that are. The buyer and the seller
must mutually profit by such a bargain; and, what rarely
happens in matters of revenue, the relief of the subject will go
hand in hand with the profit of the Exchequer. * * * The
revenue to be derived from the sale of the forest lands will not
be so considerable as many have imagined; and I conceive it
would be unwise to screw it up to the utmost, or even to suffer
bidders to enhance, according to their eagerness, the purchase
of objects, wherein the expense of that purchase may weaken
the capital to be employed in their cultivation. * * * The
principal revenue which I propose to draw from these
uncultivated wastes, is to spring from the improvement and
population of the kingdom; events infinitely more advantageous
to the revenues of the crown than the rents of the best landed
estate which it can hold. * * * It is thus I would dispose of the
unprofitable landed estates of the crown: throw them into the
mass of private property: by which they will come, through the
course of circulation and through the political secretions of the
State into well-regulated revenue. * * * Thus would fall an
expensive agency, with all the influence which attends it."
I do not know how old, or rather, how young I was, when I first
took up the notion that sales of land by a government to its own
citizens, and to the highest bidder, was false policy; and that
gratuitous grants to actual settlers was the true policy, and their
labor the true way of extracting national wealth and strength from
the soil. It might have been in childhood, when reading the Bible,
and seeing the division of the promised land among the children of
Israel: it might have been later, and in learning the operation of the
feudal system in giving lands to those who would defend them: it
might have been in early life in Tennessee, in seeing the fortunes
and respectability of many families derived from the 640 acre head-
rights which the State of North Carolina had bestowed upon the first
settlers. It was certainly before I had read the speech of Burke from
which the extract above is taken; for I did not see that speech until
1826; and seventeen years before that time, when a very young
member of the General Assembly of Tennessee, I was fully imbued
with the doctrine of donations to settlers, and acted upon the
principle that was in me, as far as the case admitted, in advocating
the pre-emption claims of the settlers on Big and Little Pigeon,
French Broad, and Nolichucky. And when I came to the then
Territory of Missouri in 1815, and saw land exposed to sale to the
highest bidder, and lead mines and salt springs reserved from sale,
and rented out for the profit of the federal treasury, I felt
repugnance to the whole system, and determined to make war upon
it whenever I should have the power. The time came round with my
election to the Senate of the United States in 1820: and the years
1824, '26, and '28, found me doing battle for an ameliorated system
of disposing of our public lands; and with some success. The pre-
emption system was established, though at first the pre-emption
claimant was stigmatized as a trespasser, and repulsed as a criminal;
the reserved lead mines and salt springs, in the State of Missouri,
were brought into market, like other lands; iron ore lands, intended
to have been withheld from sale, were rescued from that fate, and
brought into market. Still the two repulsive features of the federal
land system—sales to the highest bidder, and donations to no one—
with an arbitrary minimum price which placed the cost of all lands,
good and bad, at the same uniform rate (after the auctions were
over), at one dollar twenty-five cents per acre. I resolved to move
against the whole system, and especially in favor of graduated
prices, and donations to actual and destitute settlers. I did so in a
bill, renewed annually for a long time; and in speeches which had
more effect upon the public mind than upon the federal legislation—
counteracted as my plan was by schemes of dividing the public
lands, or the money arising from their sale, among the States. It was
in support of one of these bills that I produced the authority of
Burke in the extract quoted; and no one took its spirit and letter
more promptly and entirely than President Jackson. He adopted the
principle fully, and in one of his annual messages to Congress
recommended that, as soon as the public (revolutionary) debt
should be discharged (to the payment of which the lands ceded by
the States were pledged), that they should CEASE TO BE A SUBJECT OF
REVENUE, AND BE DISPOSED OF CHIEFLY WITH A VIEW TO SETTLEMENT AND
CULTIVATION.His terms of service expired soon after the extinction of
the debt, so that he had not an opportunity to carry out his wise and
beneficent design.
Mr. Burke considered the revenue derived from the sale of crown
lands as a trifle, and of no account, compared to the amount of
revenue derivable from the same lands through their settlement and
cultivation. He was profoundly right! and provably so, both upon
reason and experience. The sale of the land is a single operation.
Some money is received, and the cultivation is disabled to that
extent from its improvement and cultivation. The cultivation is
perennial, and the improved condition of the farmer enables him to
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