Test Bank for Quantitative Methods for Business 13th Edition by David Anderson , Dennis Sweeney, Thomas Williams, Jeffrey Camm, James Cochran ISBN 1285866312 978-1285866314

Chapter 1. Introduction

1.1. Problem Solving and Decision Making

1.2. Quantitative Analysis and Decision Making

1.3. Quantitative Analysis

Model Development

Data Preparation

Model Solution

Report Generation

A Note regarding Implementation

1.4. Models of Cost, Revenue, and Profit

Cost and Volume Models

Revenue and Volume Models

Profit and Volume Models

Breakeven Analysis

1.5. Quantitative Methods in Practice

Summary

Glossary

Problems

Case Problem. Scheduling a Golf League

Chapter 2. Introduction to Probability

2.1. Experiments and the Sample Space

2.2. Assigning Probabilities to Experimental Outcomes

Classical Method

Relative Frequency Method

Subjective Method

2.3. Events and Their Probabilities

2.4. Some Basic Relationships of Probability

Complement of an Event

Addition Law

Conditional Probability

Multiplication Law

2.5. Bayes’ Theorem

The Tabular Approach

2.6. Simpson’s Paradox

Summary

Glossary

Problems

Case Problem. Hamilton County Judges

Case Problem. College Softball Recruiting

Chapter 3. Probability Distributions

3.1. Random Variables

3.2. Discrete Random Variables

Probability Distribution of a Discrete Random Variable

Expected Value

Variance

3.3. Binomial Probability Distribution

Nastke Clothing Store Problem

Expected Value and Variance for the Binomial Distribution

3.4. Poisson Probability Distribution

An Example Involving Time Intervals

An Example Involving Length or Distance Intervals

3.5. Continuous Random Variables

Applying the Uniform Distribution

Area as a Measure of Probability

3.6. Normal Probability Distribution

Standard Normal Distribution

Computing Probabilities for Any Normal Distribution

Grear Tire Company Problem

3.7. Exponential Probability Distribution

Computing Probabilities for the Exponential Distribution

Relationship between the Poisson and Exponential Distributions

Summary

Glossary

Problems

Case Problem. Specialty Toys

Appendix 3.1. Computing Discrete Probabilities with Excel

Appendix 3.2. Computing Probabilities for Continuous Distributions with Excel

Chapter 4. Decision Analysis

4.1. Problem Formulation

Influence Diagrams

Payoff Tables

Decision Trees

4.2. Decision Making without Probabilities

Optimistic Approach

Conservative Approach

Minimax Regret Approach

4.3. Decision Making with Probabilities

Expected Value of Perfect Information

4.4. Risk Analysis and Sensitivity Analysis

Risk Analysis

Sensitivity Analysis

4.5. Decision Analysis with Sample Information

Influence Diagram

Decision Tree

Decision Strategy

Risk Profile

Expected Value of Sample Information

Efficiency of Sample Information

4.6. Computing Branch Probabilities with Bayes’ Theorem

Summary

Glossary

Problems

Case Problem 1. Property Purchase Strategy

Case Problem 2. Lawsuit Defense Strategy

Appendix 4.1. Using Analytic Solver Platform to Create Decision Trees

Chapter 5. Utility and Game Theory

5.1. The Meaning of Utility

5.2. Utility and Decision Making

The Expected Utility Approach

Summary of Steps for Determining the Utility of Money

5.3. Utility: Other Considerations

Risk Avoiders versus Risk Takers

5.4. Introduction to Game Theory

Competing for Market Share

Identifying a Pure Strategy

5.5. Mixed Strategy Games

A Larger Mixed Strategy Game

Summary of Steps for Solving Two-Person, Zero-Sum Games

Extensions

Summary

Glossary

Problems

Case Problem. Utility, Game Theory, and Product Line Extension Decisions

Chapter 6. Time Series Analysis and Forecasting

6.1. Time Series Patterns

Horizontal Pattern

Trend Pattern

Seasonal Pattern

Trend and Seasonal Pattern

Cyclical Pattern

Selecting a Forecasting Method

6.2. Forecast Accuracy

6.3. Moving Averages and Exponential Smoothing

Moving Averages

Weighted Moving Averages

Exponential Smoothing

6.4. Linear Trend Projection

6.5. Seasonality

Seasonality without Trend

Seasonality with Trend

Models Based on Monthly Data

Summary

Glossary

Problems

Case Problem 1. Forecasting Food and Beverage Sales

Case Problem 2. Forecasting Lost Sales

Appendix 6.1. Forecasting with Excel Data Analysis Tools

Chapter 7. Introduction to Linear Programming

7.1. A Simple Maximization Problem

Problem Formulation

Mathematical Model for the RMC Problem

7.2. Graphical Solution Procedure

A Note on Graphing Lines

Summary of the Graphical Solution Procedure for Maximization Problems

Slack Variables

7.3. Extreme Points and the Optimal Solution

7.4. Computer Solution of the RMC Problem

Interpretation of Answer Report

7.5. A Simple Minimization Problem

Summary of the Graphical Solution Procedure for Minimization Problems

Surplus Variables

Computer Solution of the M&D Chemicals Problem

7.6. Special Cases

Alternative Optimal Solutions

Infeasibility

Unbounded

7.7. General Linear Programming Notation

Summary

Glossary

Problems

Case Problem 1. Workload Balancing

Case Problem 2. Production Strategy

Case Problem 3. Hart Venture Capital

Appendix 7.1. Solving Linear Programs with Excel Solver

Appendix 7.2. Solving Linear Programs with LINGO

Chapter 8. Linear Programming: Sensitivity Analysis and Interpretation of Solution

8.1. Introduction to Sensitivity Analysis

8.2. Objective Function Coefficients

8.3. Right-Hand Sides

Cautionary Note on the Interpretation of Shadow Prices

8.4. Limitations of Classical Sensitivity Analysis

Simultaneous Changes

Changes in Constraint Coefficients

Nonintuitive Shadow Prices

8.5. More than Two Decision Variables

Modified RMC Problem

Bluegrass Farms Problem

8.6. Electronic Communications Problem

Problem Formulation

Solution and Interpretation

Summary

Glossary

Problems

Case Problem 1. Product Mix

Case Problem 2. Investment Strategy

Case Problem 3. Truck Leasing Strategy

Appendix 8.1. Sensitivity Analysis with Excel Solver

Appendix 8.2. Sensitivity Analysis with LINGO

Chapter 9. Linear Programming Applications in Marketing, Finance, and Operations Management

9.1. Marketing Applications

Media Selection

Marketing Research

9.2. Financial Applications

Portfolio Selection

Financial Planning

9.3. Operations Management Applications

A Make-Or-Buy Decision

Production Scheduling

Workforce Assignment

Blending Problems

Summary

Problems

Case Problem 1. Planning an Advertising Campaign

Case Problem 2. Schneider’s Sweet Shop

Case Problem 3. Textile Mill Scheduling

Case Problem 4. Workforce Scheduling

Case Problem 5. Duke Energy Coal Allocation

Appendix 9.1. Excel Solution of Hewlitt Corporation Financial Planning Problem

Chapter 10. Distribution and Network Models

10.1. Supply Chain Models

Transportation Problem

Problem Variations

A General Linear Programming Model

Transshipment Problem

Problem Variations

A General Linear Programming Model

10.2. Assignment Problem

Problem Variations

A General Linear Programming Model

10.3. Shortest-Route Problem

A General Linear Programming Model

10.4. Maximal Flow Problem

10.5. A Production and Inventory Application

Summary

Glossary

Problems

Case Problem 1. Solutions Plus

Case Problem 2. Supply Chain Design for the Darby Company

Case Problem 3. DK Dental Care

Appendix 10.1. Excel Solver Solution of Transportation, Transshipment, and Assignment Problems

Chapter 11. Integer Linear Programming

11.1. Types of Integer Linear Programming Models

11.2. Graphical and Computer Solutions for an All-Integer Linear Program

Graphical Solution of the LP Relaxation

Rounding to Obtain an Integer Solution

Graphical Solution of the All-Integer Problem

Using the LP Relaxation to Establish Bounds

Computer Solution

11.3. Applications Involving 0−1 Variables

Capital Budgeting

Fixed Cost

Supply Chain Design

Bank Location

Product Design and Market Share Optimization

11.4. Modeling Flexibility provided by 0-1 Integer Variables

Multiple-Choice and Mutually Exclusive Constraints

k out of n Alternatives Constraint

Conditional and Corequisite Constraints

A Cautionary Note about Sensitivity Analysis

Summary

Glossary

Problems

Case Problem 1. Textbook Publishing

Case Problem 2. Yeager National Bank

Case Problem 3. Production Scheduling with Changeover Costs

Case Problem 4. Applecore Children’s Clothing

Appendix 11.1. Excel Solver Solution of Integer Linear Programs

Appendix 11.2. LINGO Solution of Integer Linear Programs

Chapter 12. Advanced Optimization Applications

12.1. Data Envelopment Analysis

Evaluating the Performance of Hospitals

Overview of the DEA Approach

DEA Linear Programming Model

Summary of the DEA Approach

12.2. Revenue Management

12.3. Portfolio Models and Asset Allocation

A Portfolio of Mutual Funds

Conservative Portfolio

Moderate Risk Portfolio

12.4. Nonlinear Optimization—The RMC Problem Revisited

An Unconstrained Problem

A Constrained Problem

Local and Global Optima

Shadow Prices

12.5. Constructing an Index Fund

Summary

Glossary

Problems

Case Problem. CAFE Compliance in the Auto Industry

Appendix 12.1. Solving Nonlinear Problems with LINGO

Appendix 12.2. Solving Nonlinear Problems with Excel Solver

Chapter 13. Project Scheduling: PERT/CPM

13.1. Project Scheduling Based on Expected Activity Times

The Concept of a Critical Path

Determining the Critical Path

Contributions of PERT/CPM

Summary of the PERT/CPM Critical Path Procedure

13.2. Project Scheduling considering Uncertain Activity Times

The Daugherty Porta-Vac Project

Uncertain Activity Times

The Critical Path

Variability in Project Completion Time

13.3. Considering Time–Cost Trade-Offs

Crashing Activity Times

Linear Programming Model for Crashing

Summary

Glossary

Problems

Case Problem. R. C. Coleman

Appendix 13.1. Finding Cumulative Probabilities for Normally Distributed Random Variables

Chapter 14. Inventory Models

14.1. Economic Order Quantity (EOQ) Model

The How-Much-to-Order Decision

The When-to-Order Decision

Sensitivity Analysis for the EOQ Model

Excel Solution of the EOQ Model

Summary of the EOQ Model Assumptions

14.2. Economic Production Lot Size Model

Total Cost Model

Economic Production Lot Size

14.3. Inventory Model with Planned Shortages

14.4. Quantity Discounts for the EOQ Model

14.5. Single-Period Inventory Model with Probabilistic Demand

Neiman Marcus

Nationwide Car Rental

14.6. Order-Quantity, Reorder Point Model with Probabilistic Demand

The How-Much-to-Order Decision

The When-to-Order Decision

14.7. Periodic Review Model with Probabilistic Demand

More Complex Periodic Review Models

Summary

Glossary

Problems

Case Problem 1. Wagner Fabricating Company

Case Problem 2. River City Fire Department

Appendix 14.1. Development of the Optimal Order Quantity ( Q * ) Formula for the EOQ Model

Appendix 14.2. Development of the Optimal Lot Size ( Q * ) Formula for the Production Lot Size Model

Chapter 15. Waiting Line Models

15.1. Structure of a Waiting Line System

Single-Server Waiting Line

Distribution of Arrivals

Distribution of Service Times

Queue Discipline

Steady-State Operation

15.2. Single-Server Waiting Line Model with Poisson Arrivals and Exponential Service Times

Operating Characteristics

Operating Characteristics for the Burger Dome Problem

Managers’ Use of Waiting Line Models

Improving the Waiting Line Operation

Excel Solution of Waiting Line Model

15.3. Multiple-Server Waiting Line Model with Poisson Arrivals and Exponential Service Times

Operating Characteristics

Operating Characteristics for the Burger Dome Problem

15.4. Some General Relationships for Waiting Line Models

15.5. Economic Analysis of Waiting Lines

15.6. Other Waiting Line Models

15.7. Single-Server Waiting Line Model with Poisson Arrivals and Arbitrary Service Times

Operating Characteristics for the M/G/1 Model

Constant Service Times

15.8. Multiple-Server Model with Poisson Arrivals, Arbitrary Service Times, and No Waiting Line

Operating Characteristics for the M/G/k Model with Blocked Customers Cleared

15.9. Waiting Line Models with Finite Calling Populations

Operating Characteristics for the M/M/1 Model with a Finite Calling Population

Summary

Glossary

Problems

Case Problem 1. Regional Airlines

Case Problem 2. Office Equipment, Inc.

Chapter 16. Simulation

16.1. What-If Analysis

Sanotronics

Base-Case Scenario

Worst-Case Scenario

Best-Case Scenario

16.2. Simulation of Sanotronics Problem

Use of Probability Distributions to Represent Random Variables

Generating Values for Random Variables with Excel

Executing Simulation Trials with Excel

Measuring and Analyzing Simulation Output

16.3. Inventory Simulation

Simulation of the Butler Inventory Problem

16.4. Waiting Line Simulation

Black Sheep Scarves

Customer (Scarf) Arrival Times

Customer (Scarf) Service (Inspection) Times

Simulation Model

Simulation of Black Sheep Scarves

Simulation with Two Quality Inspectors

Simulation Results with Two Quality Inspectors

16.5. Simulation Considerations

Verification and Validation

Advantages and Disadvantages of Using Simulation

Summary

Glossary

Problems

Case Problem 1. Four Corners

Case Problem 2. Harbor Dunes Golf Course

Case Problem 3. County Beverage Drive-Thru

Appendix 16.1. Probability Distributions for Random Variables

Appendix 16.2. Simulation with Analytic Solver Platform

Chapter 17. Markov Processes

17.1. Market Share Analysis

17.2. Accounts Receivable Analysis

Fundamental Matrix and Associated Calculations

Establishing the Allowance for Doubtful Accounts

Summary

Glossary

Problems

Case Problem. Dealer’s Absorbing State Probabilities in Blackjack

Appendix 17.1. Matrix Notation and Operations

Appendix 17.2. Matrix Inversion with Excel

Appendix A. Building Spreadsheet Models

Appendix B. Binomial Probabilities

Appendix C. Poisson Probabilities

Appendix D. Areas for the Standard Normal Distribution

Appendix E. Values of e – λ

Appendix F. References and Bibliography