Models that do not involve risk or chance are (a) probabilistic models. (b) post

Question

Models that do not involve risk or chance are (a) probabilistic models. (b) postoptimality models. (c) deterministic models. (d) MIS models. (e) none of the above What is the formula for the break-even point of a simple profit model? (a) Fixed Cost/Variable Cost Per Unit (b) (Selling Price Per Unit-Variable Cost Per Unit)/Fixed Cost (c) Fixed Cost/(Selling Price Per Unit - Variable Cost Per Unit) (d) Fixed Cost variable Cost/(Variable Cost Per Unit - Selling Price Per Unit) (e) Selling Price Per Unit-(Fixed Cost/Variable Cost Per Unit) Which of the following statements about scatter diagrams is true? (a) Time is always plotted on the Y axis. (b) It can depict the relationship among three variables simultaneously. (c) It is helpful when forecasting with qualitative data. (d) The variable to be forecast is placed on the Y axis. (e) It is not a good tool for understanding time-series data. Which of the following is a technique used to determine forecasting accuracy? (a) Exponential Smoothing (b) Moving Average (c) Regression (d) Delphi Method (e) Mean Absolute Percent Error Which of the following is not a use of inventory? (a) the decoupling function (b) quantity discounts (c) irregular supply and demand (d) the translucent function (e) to avoid stockouts and shortages In making inventory decisions, the purpose of the basic ECQ model is to (a) minimize carrying costs. (b) minimize ordering costs. (c) minimize the sum of carrying costs and ordering costs. (d) minimize customer dissatisfaction. (e) minimize stock on hand. Which of the following factors is (are) not included in ordering cost? (a) bill paying (b) obsolescence (c) purchasing department overhead costs (d) inspecting incoming inventory (e) developing and sending purchase orders Which of the following factors is (are) not included in carrying cost? (a) spoilage

Explanation / Answer

3. c) deterministic models - they are calculated precisely using mathematical equation or formulae.

4. c) Fixed cost / (selling price - variable price)

Fixed cost + variable cost * units = selling price * units

FC = SP * units - VC * units = (SP - VC) * units

units = FC/ (SP - VC)

5. d) the variable to be forecast is placed on y-axis

so that we can establish relationship like y = a + bx(in case of linear relationship) and there by any changes in value x will be forecast as y

6. e) mean absolute percent error

It gives the accuracy by taking the residual as percentage of original value

7. d) translucent function

8. c) minimise the ordering and carrying costs

eoq - economic order quanity. order such that the ordering cost and carrying cost is minimised

9. b) obsolescence

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