Test Bank for Operations Management Processes and Supply Chains 10th Edition Krajewski

Full fle at http://testbankcae.eu/Test-Bank-or-Operations-Management-Processes-anduppl!-"hains-#$th-%dition uppl!-"hains-#$th-%dition-&ra'e(ski -&ra'e(ski

Oper at i onsManageme nt : Pr oce ss e sandSuppl yChai ns, 10e ( Kr a j e ws ws kie ta l . ) Suppl eme mentA De c i s i onMa Ma ki ng 1 )Thebr e a k e v e nqua nt i t yi st hev ol umea twhi c ht het o t a lr e v e nuee qua l st o t a lc o s t . Ans we r :TRUE Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Eas y Ke ywor ds :b r e a ke v enqua nt i t y , t o t a lr e v e nue ,t o t a lc o s t 2 )Theva r i a bl ec os ti st hepor t i onoft o t a lc os tt ha tr e ma ma i nsc o ns t a ntr e g ar dl e s so fc ha nge si nl e ve l so f pr o duc t i o n. Ans we r :F ALSE Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Eas y Ke ywor ds :v a r i a bl ec o s t , l e v elofout put , br e a k e ve npoi nt 3 )F i x e dc o s ti st hepor t i onoft het o t a lc o s tt ha tr e ma ma i nsc o ns t a ntr e g a r dl e s so fc h ange si nl e v el sofout put . Ans we r :TRUE Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wo wor ds :fix e dc o s t ,l e v e lofo ut put ,br e a k e v e nqua nt i t y 4 )S ens i t i vi t yana l ys i si sat e c hni quef ors y s t e ma ma t i c a l l yc ha ngi ngpa r a me me t e r si namo mode lt ode t e r mi mi net he e ffe c t so fs u c hc h a ng e s . Ans we r :TRUE Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke ywor ds :s e ns i t i vi t yana l ys i s , pa r a me me t e r ,br e a k e v enqua nt i t y 5 )Apr e f e r e n c em ma a t r i xi sat a bl et ha ta l l o ws wst hema ma na ge rt or a t ea na l t e r n a t i v ea c c o r di ngt oone pe r f o r ma ma nc ec r i t e r i o n. Ans we r :F ALSE Re f e r e nc e :Pr e f e r e nc eMa t r i x Di fficul t y:Moder at e Ke ywor ds :pr e f e r e nc ema ma t r i x ,a l t e r na t i v e, pe r f or ma ma nc ec r i t e r i a 6 )De c i s i o nt he o r yi sag e n e r a la ppr o a c ht ode c i s i o nma ki ngwh whe nt heo ut c o me me sa s s o c i a t e dwi t h a l t e r na t i ve sa r eo f t e ni ndoubt . Ans we r :TRUE Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke ywor ds :de c i s i ont he or y , unc e r t a i nt y , r i s k 7 )Apa y offt a bl es h owst hea mo mountf ore a c hal t e r n a t i v ei fe a c hpos s i bl ee v e nto c c ur s . Ans we r :TRUE Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e A1 Co py r i g ht©2 0 1 3Pe a r s o nEduc a t i o n,I nc . pub l i s h i nga sP r e nt i c eHa Ha l l


Keywo words:payofft abl e, event 8 )I ft hepa y offt a bl ec ont a i nse x pe ns e si ns t e a dofr e v e nue s , t he nt heopt i mi s t i cc r i t e r i oni sMi Mi ni mi n. Ans we r :TRUE Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wo wo r ds :ma x i ma x ,o pt i mi s t ,pe s s i mi s t 9 )I fane wa l t e r n a t i v ei sa dde dt oapa y offt a bl ea ndt hema ma x i ma xc r i t e r i o ni sa ppl i e da ga i n,t hene w de c i s i onmus te i t he rr e ma ma i nwi t ht heo r i gi na lma x i ma xal t e r n a t i v eort hene wa l t e r n a t i v e . Ans we r :TRUE Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wo wo r ds :ma x i ma x ,a l t e r na t i v e 1 0)I ft hepa y offt a bl ec ont a i nse x pe ns e si ns t e a dofr e v e nue s , t he nt hepe s s i mi s t i cc r i t e r i oni sMi Mi ni mi n. Ans we r :F ALSE Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wo wo r ds :ma x i ma x ,o pt i mi s t ,pe s s i mi s t 1 1 )TheLa pl a c ec r i t e r i o nwi l lr e a c ht hes a me mede c i s i o na st heMi Mi ni ma xRe g r e tc r i t e r i o nwhe nt hepa y o ff t a bl ec ont a i nse x pe ns e si ns t e a do fr e v e nue s . Ans we r :F ALSE Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wo wo r ds :mi ni ma xr e g r e t ,La pl a c e , pa y o fft a bl e 1 2 )Ma Ma x i ma xi sade c i s i onr ul ef o rt hepe s s i mi s t . Ans we r :F ALSE Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wo wo r ds :ma x i ma x ,o pt i mi s t ,pe s s i mi s t 1 3 )Byde fini t i o n,t hema ma x i ma xa ndma x i mi nc r i t e r i ac a nno tr e s ul ti nt hes e l e c t i o no fac o mm mmo n a l t e r n a t i v ei nde c i s i o nma ki ngunde runc e r t a i nt y . Ans we r :F ALSE Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywor ds :dec i s i onma maki ng,maxi max, maxi mi n 1 4 )Ma Ma ki ngade c i s i o nunde rr i s kus i ngt hee x pe c t e dv al uec r i t e r i oni st hee qui v al e nto fu s i ngt heLa pl a c e de c i s i onr u l eunde runc e r t a i nt y . Ans we r :TRUE Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wo wor ds :La pl a c ede c i s i o nr ul e ,e x pe c t e dva l ue A2 Co py r i g ht©2 0 1 3Pe a r s o nEduc a t i o n,I nc . pub l i s h i nga sP r e nt i c eHa Ha l l


1 5)Thes qua r enode si nade c i s i ont r e er e pr e s e ntt heal t e r na t i v esi nas e que nt i a lde c i s i ons i t ua t i on. Ans we r :F ALSE Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke ywor ds :node ,de c i s i ont r e e , s e que nt i a lde c i s i ons 1 6 )Wh Whi c honeoft hef o l l o wi wi ngs t a t e me me nt sa b outbr e a k e v e na na l ys i sf o re v al ua t i ngpr o duc t so rs e r v i c e si s t r ue ? A)Thebr e a k e v e nqua nt i t ywi l lt e ndt oi nc r e a s ea st heva r i a bl ec os tpe runi tofpr oduc t i o nde c r e a s e s . B)Ass a l e si nc r e a s ebe y ondt hebr e a k e ve nqua nt i t y , t o t a lbe f or e t a xpr o fit st e ndt ode c r e a s e . C)Ar e s t a ur a nt ' so pe ni ngofdo wn wns i z e df a c i l i t i e swi wi t honl ydr i v e t hr oughs e r vi c ei sa ne x ampl eof l o we we r i ngfix e dc o s t sa ndt hebr e a k e v e nq ua nt i t y . D)I nc r e a s i ngt heuni ts e l l i ngpr i c eha st hee ffe c tofi nc r e a s i ngt hebr e a k e v enqua nt i t y . Answer :C Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wo wo r ds :b r e a k e v e n,fix e dc o s t 1 7 )Whi c honeoft hef o l l o wi wi ngs t a t e me me nt sa b outbr e a k e v e na na l ys i s , a swea ppl i e di tt oe v al ua t i ng pr o duc t sors e r vi c e s ,i sbe s t ? A)Br e a k e ve na na l ys i sa s s ume st ha tt hec os tf unc t i oni sl i ne a ra ndc o ns i s t so ffix e dc o s t spl usv a r i a bl e c o s t st i me sv ol ume . B)Thebr e a k e ve nqua nt i t ywi wi l li nc r e a s ewh whe nt hec ha ng ei nv ar i a bl ec o s tpe ru ni ti si de nt i c a lt ot h e c h ang ei nuni tpr i c e . C)I nc r e a s i ngt hepr i c e ,whi l eke e pi ngt heva r i a bl ec os tpe runi tc o ns t a nt ,i nc r e a s e st hebr e a k e v en qua nt i t y . D)I nc r e a s i ngt hefix e dc o s t st e ndst ode c r e a s et hebr e a k e v e nqua nt i t y . Answer :A Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke ywor ds :br e a k e v enqua nt i t y , fix e dc o s t ,v ar i a bl ec os t 1 8 )Wh Whi c hc o ndi t i o nwo ul dr e s u l ti ni n va l i da t i nga na ppl i c a t i o nofbr e a k e v e na na l ys i s ? A)Thev ar i a bl ec o s tt opr o duc eauni ti sl e s st ha nonepe r c e nto ft hefix e dc o s tt or unt hepl a nt . B)Thepur c h a s i ngde pa r t me ntb ot ho ffe r sq ua nt i t ydi s c o unt st oc us t o me me r sa n dr e c e i v e sq ua nt i t y di s c o unt sf r o ms u ppl i e r s . C)Theva r i a bl ec os tt opr oduc eauni ti swi wi t hi no nepe r c e ntoft hes a l epr i c e . D)Thel a b ort oma nuf a c t ur et hei t e mi sf r e e . Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wo wo r ds :b r e a k e v e nq ua nt i t y , v ol ume ,c o s t

A3 Co py r i g ht©2 0 1 3Pe a r s o nEduc a t i o n,I nc . pub l i s h i nga sP r e nt i c eHa Ha l l


1 9 )Ma nt e lI nc o r por a t e db e ga npr o duc i ngi t sn e wl i neo fdo l l sa ti t sCo nne c t i c utpl a nti nDe c e mb mbe ro f y ea r0 .I ny ea r1 ,i tpr o duc e d3 0, 0 00dol l sa tat ot a lc os tof$ 38 5, 0 00 .I nye ar2 , i t spr o duc t i oni nc r e a s e dt o 8 0 , 0 0 0do l l sa tat o t a lc o s to f$ 8 8 5 , 0 0 0 .As s umi ngt hec o s ts t r uc t ur ewa st hes a me mef o rbo t hy e ar s , wha t mus tb et heva r i a bl ec o s t( )a ndt hefix e dc o s t( )pe rdol l ? c F A)Fi sl e s st ha n$ 80 , 0 00 ,a ndc i sgr e a t e rt ha n$ 7. B)Fi sg r e a t e rt ha n$ 60 , 0 00 ,a ndc i sl e s st ha n$ 5. C)Fi sl e s st ha n$ 10 0, 0 00 ,a ndc i sgr e a t e rt ha n$ 9. D)Fi sg r e a t e rt ha n$ 1 10 , 0 0 0, a ndc i sl e s st ha n$ 6. Answer :C Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke ywor ds :br e a k e v enqua nt i t y , v ar i a bl ec os t ,fix e dc o s t AACS B:Ana l yt i cs k i l l s 2 0)Thebr e a k e ve nqua nt i t yf orac e r t a i nki t c he na ppl i a nc ei s6 0 00uni t s . Thes e l l i ngpr i c ei s$ 10pe runi t , a ndt hev ar i a bl ec o s ti s$ 4pe runi t . Wha tmus tbet hefix e dc o s tt obr e a ke v e na t6 0 00uni t s ? A)l e s st ha n$ 3 5, 0 0 0 B)b e t we e n$ 35 , 0 0 0a nd$ 4 0 , 0 0 0 C)bet ween$40, 001and$45, 000 D)above$45, 000 Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wo wo r ds :b r e a k e v e nqua nt i t y , fix e dc o s t AACS B:Ana l yt i cs k i l l s

A4 Co py r i g ht©2 0 1 3Pe a r s o nEduc a t i o n,I nc . pub l i s h i nga sP r e nt i c eHa Ha l l

Full fle at http://testbankcae.eu/Test-Bank-or-Operations-Management-Processes-anduppl!-"hains-#$th-%dition-&ra'e(ski

2 1)A" Li t t l eSi s "r e s t a ur a ntha sbe e nope ne da sapr o t o t y pet ot e s tt hec onc e ptofas ma l l e rf a c i l i t ywi t ha l i mi t e dme nu.Ex pe r i e nc edur i ngt hefir s tt woye a r swa sa sf o l l o ws :

Thea v e r a g es a l ei s$ 1 0pe rc us t ome r .Us et hef ol l o wi ngpa r t i a l l yc ompl e t e dgr a pht ode t e r mi net heb r e a k e v e nqua nt i t ygr a phi c a l l y .The nr e fineyo urs ol ut i o nb ys o l vi ngi ta l g e br a i c a l l y .( S ho wy ourwo r kf or c r edi t . )

A)Thebr e a k e v e nqua nt i t yi sf e we rt ha no re qua lt o3 0 , 0 0 0c us t o me rv i s i t s . B)Thebr e a k e v e nqua nt i t yi smo r et ha n3 0 , 0 0 0c us t o me rv i s i t sa ndf e we rt ha nore qua lt o5 0 , 0 0 0vi s i t s . C)Thebr e a k e v e nqua nt i t yi smo r et ha n5 0 , 0 0 0vi s i t sa ndf e we rt ha no re qua lt o7 0 , 0 0 0vi s i t s . D)Theb r e a k e v e nqua nt i t yi smo r et ha n7 0 , 0 0 0c us t ome rvi s i t s . Answer :D Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Har d Ke y wo r ds :b r e a k e v e nq ua nt i t y AACS B:Ana l yt i cs k i l l s

A5 Co py r i g ht©2 0 1 3Pe a r s o nEduc a t i o n,I nc . pub l i s h i nga sP r e nt i c eHa l l


2 2 )Mi norVi de oha so pe ne dane ws t o r er e n t i ngvi de o c a s s e t t e s . F i x e dc o s t sa r e$ 6 0, 0 0 0 ,a ndt hev ar i a bl e c o s tpe ru ni ti s$ 1 . 5 0 .Thea ve r a ges a l ei s$ 5pe rc us t ome r .Us et hef o l l o wi nga x e st ode t e r mi net hebr e a k e ve nqua nt i t ygr a phi c a l l y .Ne x t , r e finey ours o l ut i onb ys o l vi ngi ta l g ebr a i c a l l y .( S ho wy ourwor kf or c r edi t . )

A)Thebr e a k e v e nqua nt i t yi sf e we rt ha no re qua lt o1 0 , 0 0 0r e nt a l s . B)Thebr e a k e v e nqua nt i t yi smo r et ha n1 0 , 0 0 0r e n t a l sa ndf e we rt ha no re qua lt o2 0 , 0 0 0r e nt a l s . C)Theb r e a k e v e nqua nt i t yi smo r et ha n2 0 , 0 0 0r e nt a l sa ndf e we rt ha no re q ua lt o25 , 0 0 0r e nt a l s . D)Theb r e a k e v e nqua nt i t yi smo r et ha n2 5 , 0 0 0r e n t a l s . Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wo r ds :b r e a k e v e nq ua nt i t y AACS B:Ana l yt i cs k i l l s 2 3 )Ane w pr o duc ti sb e i ngc o ns i de r e dt ha twi l lr e qui r e$ 4 5 , 0 0 0i nfix e dc o s t spe ry e a r .Va r i a bl ec o s t spe r uni ta r ee s t i ma t e dt ob e$ 1 2 . 7 2 .Thefir m wa nt st ob r e a ke v e ni f8 0 0 0uni t sa r epr o duc e da nds o l dpe ry e a r . Whats houl dbet hepri ce ? A)l e s st ha n$ 16 . 0 0 B)b e t we e n$ 16 . 0 0a nd$ 1 6 . 9 9 C)bet ween$17. 00and$17. 99 D)bet ween$18. 00and$18. 99 Answer :D Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wor ds :br e a k e v e nqua nt i t y , pr i c ep e runi t AACS B:Ana l yt i cs k i l l s



2 4 )As o f t wa r ec o mpa nyt ha ts e l l si t ss of t wa r epr e i ns t a l l e di npe r s o na lc o mput e r si sc ons i de r i ngma ki ng i t sowncomput er si nst eadofpur chas i ngt hem f r om t heMegaChi pCompany. Toass embl et hei rown c o mput e r sc oul dc o s t$ 1 , 0 0 0, 0 0 0i nfix e dc o s t sa n d$ 1 00pe runi ti nv ar i a bl ec o s t s . Thec o mpa nyc ur r e nt l y buysPCsf or$1200,wi t hnofix e dc os t s .Wha ti st hebr e ak e ve nquant i t y? A)gr e a t e rt ha no re q ua lt o18 0 0 B)g r e a t e rt ha n9 0 0butf e we rt ha n1 8 0 0 C)gr e a t e rt ha n4 5 0butf e we rt ha n9 0 0 D)l e s st ha n4 5 0 Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Har d Ke y wo r ds :b r e a k e v e nq ua nt i t y AACS B:Ana l yt i cs k i l l s 2 5 )Ane w pr o duc twi l ls e l li nt hema r k e tf or$ 1 2 .I tc o s t s$ 7( uni tv ar i a bl ec o s t )t oma nuf a c t ur eonane w l a t hema c hi ne .I ft hebr e a k e v enqua nt i t yi s1 0 , 0 0 0uni t s , wha ti st hea nnua lfix e dc o s ti nv ol v edi n a c q ui r i ngt hema c h i nea ndi npa y i ngot he rfix e dc o s t s ? A)l e s st ha n$ 4 0, 0 0 0 B)gr e a t e rt ha n$ 40 , 0 00butl e s st ha nore qua lt o$ 55 , 0 00 C)gr e a t e rt ha n$ 5 5, 0 0 0butl e s st ha nore qua lt o$7 0, 0 0 0 D)gr e a t e rt ha n$ 7 0 , 0 0 0 Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wo r ds :b r e a k e v e nqua nt i t y , fix e dc o s t AACS B:Ana l yt i cs k i l l s 2 6)Ane w pr o duc tt ha twi l ls e l lf or$ 7 5 . 0 0ha sva r i a bl ec o s t so f$ 38 . 0 0pe runi t .Fi x e dc o s t so f$ 75 , 0 00mus t bei nc ur r e de ve r yye art omanuf a c t ur et hi spr oduc t .Whati st heannualvol umet obr e ake ve n? A)f e we rt ha n1 5 0 0uni t s . B)1 5 00t o1 7 4 9uni t s . C)1 7 50t o19 9 9uni t s . D)2000uni t sormore . Answer :D Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wo r ds :b r e a k e v e nq ua nt i t y AACS B:Ana l yt i cs k i l l s



2 7 )Co mmo do r ei sde b a t i ngwhe t he rt opr o duc et hepr i nt e dc i r c u i tb oa r dsf o ran e wl i neo fvi de oc a me r a s oro ut s o ur c et he i rp r oduc t i ont oac ompa nyt ha ts pe c i a l i z e si nt hi so pe r a t i on.S t r i c t l yf r o m ac os t s t a ndpoi nt ,pr o duc t i ono ft hec i r c ui tbo ar dswoul dde fini t e l ybeout s o ur c e di f : A)t heva r i a bl ec o s to fp r o duc i ngt hec i r c ui tbo ar dsi sl o we rt ha nt hebuyo pt i on. B)t hepr oduct i onvol umesar egr eat ert hanCommodore ' sbr eakevenquant i t y. C)t hepr oduct i onvol umesar el es st hanCommodore ' sbr eakevenquant i t y. D)t hepr oduct i onvol umesar et hes amef ormaki ngandbuyi ngt heci r cui tboar ds . Answer :C Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Eas y Ke y wo r ds :b r e a k e v e nq ua nt i t y 28)Apoul t r yf ar meri sdebat i ngwhet hert oacqui r eRhodeI s l andRedsorBuffOr pi ngt onst ol ayt heeggs hewa nt st os e l l .Thefix e dc o s t sf o rt heBuffswo ul db e$ 75 0 0a ndt hev a r i a b l ec o s t sp e re g gwo ul db ea di mepe re g g.TheRe dswo ul dha v eafix e dc o s to f$ 6 0 0 0a ndav a r i a bl ec o s to ffif t e e nc e n t s . Atwha tl e v e l ofeggpr oduct i onwoul dt hepoul t r yf ar merbei ndi ffer entbet weenRhodeI s l andRedsandBuff Or pi ngt ons ? A)20, 000eggs B)3 0 , 0 0 0e ggs C)5 0 , 0 0 0e g gs D)60, 000eggs Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wo r ds :b r e a k e v e nq ua nt i t y AACS B:Ana l yt i cs k i l l s 2 9 )Zi pc oi si ns e r i o usn e go t i a t i o nst opur c h a s eac h unk i ngma c h i net ha twi l le na b l et he mt ope r f o r m t he i ro wnc hunki ngat$ 1pe runi t .The yc ur r e n t l yha v et he i rc hunki ngout s o ur c e da tac o s tof$ 1 . 5 0pe r uni ta ndafix e dc o s to f$ 4 5 , 0 0 0 .The i rma r k e t i ngt e a mf e e l st ha tt he yc a ns u s t a i na na nnua lv ol umeof 1 0 , 0 0 0uni t s . Wha ti st hema x i mum fix e dc o s tt ha tZi pc os h oul db ewi l l i ngt obe a ri no r d e rt ope r f o r m t hei rownchunki ng? A)$ 5 0 , 0 0 0 B)$ 45 , 0 00 C)$ 4 0, 0 0 0 D)$ 3 5 , 0 0 0 Answer :A Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wo r ds :b r e a k e v e nqua nt i t y , fix e dc o s t AACS B:Ana l yt i cs k i l l s



3 0 )De mr o ni si ns e r i o usn e go t i a t i o nst opur c h a s eawe l di ngma c h i net ha twi l le na b l et he mt ope r f o r m t he i ro wnwe l di ng. The yc ur r e nt l yha v et he i rwe l di ngout s o ur c e datac o s to f$ 1 . 5 0pe rwe l da ndafix e d c o s to f$ 4 5 , 0 0 0 .The i rma r k e t i ngt e a mf e e l st ha tt he yc a ns u s t a i na na nnua ls a l e sv ol umes uffic i e ntt o r e q ui r e3 5 , 0 0 0we l ds . I faf a nc yne w we l di ngr i gc o s t s$ 1 3 , 5 0 0wha ti st hema x i mum v a r i a b l ec o s tpe r we l dt ha tDe mr o ns h oul db ewi l l i ngt opa yi no r d e rt ob r i ngt hi sp r o c e s si nho us e ? A)$ 3 . 0 0pe rwe l d B)$ 2 . 4 0pe rwe l d C)$ 2 . 0 0pe rwe l d D)$ 1 . 4 5pe rwe l d Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wor ds :b r e a k e v e nqua nt i t y , v ar i a bl ec o s t ,ma ke o r buyqua nt i t y AACS B:Ana l yt i cs k i l l s Tabl eA. 1 Uset hef ol l owi ngt oans wert heques t i onsbel ow. Luvma t i c spl a nst opr o duc eane w pr o duc t .Thr e edi ffe r e ntmo de l sa r epl a nne d:t heRe g ul a r , La r g e ,a nd J umbo.Thefix e dc os t sde pe ndonwhi c hoft wol oc at i onsa r eus e d;i nSanFr anc i s c ot hefix e dc os t swoul d be$2. 5mi l l i onpe rye ar , buti nTut t l et hefix e dc os t swoul dbe$1. 2mi l l i on.Sal epr i c e sandva r i abl ec os t s f o rt het hr e emo de l sa r es h owni nt het a b l e .

3 1 )Us et hei nf o r ma t i o ni nT a bl eA. 1 .Ho w ma n yuni t so ft heRe g ul a rs i z emus tb es o l de a c hye a rt obr e a k e ve ni fpr o duc t i oni sa tt heS anF r a nc i s c opl a nt ? A)f e we rt ha n3 0 , 0 0 0uni t s B)mo r et ha n3 0 , 0 0 0uni t sb utf e we rt ha n8 0 , 0 0 0uni t s C)mo r et ha n8 0 , 0 0 0uni t sb utf e we rt ha n1 3 0 , 0 0 0uni t s D)moret han130, 000uni t s Answer :C Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wo r ds :b r e a k e v e nq ua nt i t y AACS B:Ana l yt i cs k i l l s



3 2 )Us et hei nf or ma t i o ni nT abl eA. 1 .I fe x e c ut i v e sde c i det opr o duc ea tt heSa nF r a nc i s c opl a ntbuta r e ne r v ousa b outs a l e snumb e r s ,whi c hmo de lwo ul dpr o vi det heg r e a t e s tpr o fita tt hel o we s ts a l e sv ol ume s ? A)r e g ul a r B)l a r g e C)j umbo D)I tdo es n ' tma t t e rb e c a us et hefix e dc o s t sa r et hes a mef ort hes a mes i t e . Answer :C Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wo r ds :b r e a k e v e nq ua nt i t y AACS B:Ana l yt i cs k i l l s 3 3 )Us et hei nf o r ma t i o ni nT a bl eA. 1 .Wha ti st hedi ffe r e nc ei nb r e a k e v e npo i nt sf o rt heLa r g emo de l be t we e nT ut t l ea ndSanFr anc i s c o? A)f e we rt ha n2 5 , 0 0 0uni t s B)be t we e n2 5 , 0 0 0uni t sa n d4 0 , 0 0 0uni t s C)b e t we e n4 0 , 0 0 0uni t sa n d5 5 , 0 0 0uni t s D)moret han55, 000uni t s Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wo r ds :b r e a k e v e nq ua nt i t y AACS B:Ana l yt i cs k i l l s 34)Us et hei nf ormat i oni nTabl eA. 1.How muchdoesLuvmat i csmakef ore achJ umbouni tt hati s pr o duc e di nT ut t l ea nds o l da tt hel i s t e dpr i c e ? A)$68 B)$ 5 8 C)$34 D)Thi scannotbedet er mi nedwi t houtanyi nf ormat i onont heproduct i onvol ume. Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Eas y Ke y wor ds :br e a k e v e nqua nt i t y , s l o pe AACS B:Ana l yt i cs k i l l s 3 5 )Us et hei nf or ma t i o ni nT abl eA. 1 .Wha ti st hes l opeoft hefix e dc o s tl i nef o rpr oduc t i o ni nS a n F r a n c i s c o ? A)$ 2, 5 00 , 0 00 B)$ 2 5 C)$20 D)0 Answer :D Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Eas y Ke y wor ds :br e a k e v e nqua nt i t y , s l o pe AACS B:Ana l yt i cs k i l l s A10 Co py r i g ht©2 0 1 3Pe a r s o nEduc a t i o n,I nc . pub l i s h i nga sP r e nt i c eHa l l


3 6 )Us et hei nf or ma t i o ni nT abl eA. 1 .As s umet hefix e dc o s t sa n ds a l e sp r i c ei nb ot hl o c a t i onsa r e c o ns t a nt sa n dt hev a r i a b l ec o s t si nS a nF r a n c i s c oar ea ss h o wni nt het a b l e . Byho w muc hwo ul dt he va r i a bl ec os ti nT ut t l eha vet or i s et ogi vebot hl oc a t i onsa ni de nt i c a lbr e a ke ve npoi ntf ort heRe gul a r model ? A)$ 0 . 4 0 B)$ 5. 4 0 C)$ 1 0. 4 0 D)$ 1 5. 4 0 Answer :C Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wor ds :b r e a k e v e nqua nt i t y , v ar i a bl ec o s t AACS B:Ana l yt i cs k i l l s Uset hef ol l owi ngt oans wert heques t i onsbel ow. Ac ompanymus tdec i dei fi twi l lmakeorbuyani t em i tneeds .Thecompanyc anmaket hei t em f or$1 0 pe ru ni t ,b utmus ti n ve s t$ 1 5, 0 0 0i nt o ol i ngt odos o .Anout s i defir m ha sq uo t e dat o t a lpr i c eo f$ 1 2pe r uni tt os u ppl yt hequa nt i t yr e qui r e d( a s s umet he i rfi xe dc o s t sa r ei nc l ude di nt hequo t e dpr i c e ) .

3 7)Re f e rt ot hei ns t r uc t i ona bo ve .Wha ti st hebr e a k e v enqua nt i t yi nt hi ss i t ua t i on? A)6 , 5 0 0uni t s B)7 , 0 00uni t s C)7 , 2 5 0uni t s D)7 , 5 0 0uni t s Answer :D Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wor ds :b r e a k e v e nqua nt i t y , ma ke or b uy , fix e dc o s t ,v ar i a bl ec o s t AACS B:Ana l yt i cs k i l l s 3 8)Re f e rt ot h ei ns t r uc t i ona bo ve .Whi c ha l t e r na t i v es houl dbes e l e c t e di fa nnua lr e q ui r e me nt sa r e5 , 0 0 0 uni t s ? A)Make B)Buy C)Ei t he rMa keorBuy ;c o s t sa r et hes a mef o re i t he ro pt i ona t5 , 0 0 0uni t s D)Ca n' tb ede t e r mi ne dwi t hi nf o r ma t i o ng i v e n Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wor ds :b r e a k e v e nqua nt i t y , b r e a k e v e nv ol ume ,ma ke or buy , fix e dc o s t ,v ar i a bl ec o s t AACS B:Ana l yt i cs k i l l s



3 9 )Re f e rt ot hei ns t r u c t i o na bo ve .Wha tdo est hec o mpa nys a v ef ort hey ea rb ys e l e c t i ngt hi sl o wc o s t opt i on( f ora nnua lr e q ui r e me nt so f5 , 0 00uni t s ) ? A)$ 1 5 , 0 0 0 B)$ 60 , 0 00 C)$ 6 5, 0 0 0 D)$ 5 , 0 0 0 Answer :D Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wor ds :b r e a k e v e nqua nt i t y , ma ke or b uy , fix e dc o s t ,v ar i a bl ec o s t AACS B:Ana l yt i cs k i l l s Uset hef ol l owi ngt oans wert heques t i onsbel ow. Ac ompanyi sc ons i der i ngt wos u ppl i e r sf o rt hepur c ha s eo fapa r tne e de df o rma nuf a c t ur i ng.Pa r t i c ul a r s a r ea sf ol l o ws :

SUPPLI ERA: Fi x e dCos t s=$9 , 00 0/ye a r SUPPLI ERB: Fi x e dCos t s=$3 , 00 0/ye a r

Var i ab l eCos t/Uni t=$2 Var i ab l eCos t/Uni t=$5

4 0 )Re f e rt ot h ei ns t r u c t i o na bo ve .Wha ti st hea nnua lbr e a k e v e nqua nt i t yf orc h oos i ngbe t we e nt het wo s uppl i e r s ? A)1 , 0 0 0uni t s B)2 , 0 00uni t s C)6 , 0 0 0uni t s D)1 2 , 0 0 0uni t s Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wor ds :b r e a k e v e nqua nt i t y , ma ke or b uy , fix e dc o s t ,v ar i a bl ec o s t AACS B:Ana l yt i cs k i l l s 4 1 )Re f e rt ot h ei ns t r u c t i o na bo ve .F ora na nnua lv ol umeof3 , 0 0 0uni t s , whi c hs uppl i e rs h oul dbec h os e n ? A)S uppl i e rA B)S uppl i e rB C)Ei t he rS uppl i e rAo rSuppl i e rB,be c a us ec o s t sa r et hes a mef ore i t he ro pt i ona t3 , 0 0 0uni t s D)Ca n' tb ede t e r mi ne dwi t hi nf o r ma t i o ng i v e n Answer :A Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wor ds :br e a k e v e npo i nt ,b r e a k e v e nv ol ume ,ma ke or buy , fix e dc o s t ,v ar i a bl ec o s t AACS B:Ana l yt i cs k i l l s



4 2 )Re f e rt ot hei ns t r u c t i o na bo ve .Wha tdo est hec o mpa nys a v ef ort hey ea rb ys e l e c t i ngt hi sl o wc o s t opt i on( f ora nnua lr e q ui r e me nt so f3 , 0 00uni t s ) ? A)$ 1 , 0 0 0 B)$ 3, 0 00 C)$ 6 , 0 0 0 D)$ 5 , 0 0 0 Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wor ds :b r e a k e v e npo i nt ,ma ke o r b uy , fix e dc o s t ,v ar i a bl ec o s t AACS B:Ana l yt i cs k i l l s Uset hef ol l owi ngi nf ormat i ont oans wert heques t i onsbel ow. Yo uc u r r e nt l yma keapa r tf o ro l de q ui pme nta tac o s to f$ 2 0/uni t .Thea nnua lfix e dc o s tf o rt hi s e q ui pme nti s$ 5 0 , 0 0 0 .Yo uha v ef o unda no ut s i des uppl i e rwhowi l lma k et hepa r tf o r$ 1 5/uni ti fy ou wi l lpa yt he i ra nnua lfix e dc o s t so f$ 2 00 , 0 0 0/y ea r( s e et a bl e ) .

ALTERNATI VE Buy Ma ke

FI XEDCOST $200, 000pe rye a r $50, 000pe rye a r

VARI ABLECOST $15pe runi t $20pe runi t

4 3 )Re f e rt ot hei ns t r uc t i o na b ov e .Wha ti st heb r e a ke v e nq ua nt i t ybe t we e nbuy i nga ndma ki ng? A)3 0 , 0 0 0uni t sp e ry e a r B)4 0, 0 00uni t sp ery e ar C)5 0 , 0 0 0uni t spe ry e a r D)6 0 , 0 0 0uni t sp e ry e a r Answer :A Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wor ds :b r e a k e v e nqua nt i t y , ma ke or b uy , fix e dc o s t ,v ar i a bl ec o s t AACS B:Ana l yt i cs k i l l s 4 4)Re f e r st ot h ei ns t r uc t i ona bo ve .Wha ta r et o t a lc o s t st obuya na nnua lqua nt i t yof4 0, 0 00uni t s ? A)$ 4 0 0 , 0 0 0 B)$ 50 0, 0 00 C)$ 8 00 , 0 0 0 D)$ 8 5 0 , 0 0 0 Answer :C Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wor ds :b r e a k e v e nqua nt i t y , b r e a k e v e nv ol ume ,ma ke or buy , fix e dc o s t ,v ar i a bl ec o s t AACS B:Ana l yt i cs k i l l s



4 5)Re f e rt ot hei ns t r uc t i ona bo ve .Wha ta r et o t a lc o s t st oma keaqua nt i t yof4 0, 0 00uni t spe ry e a r ? A)$ 4 0 0 , 0 0 0 B)$ 45 0, 0 00 C)$ 8 00 , 0 0 0 D)$ 8 5 0 , 0 0 0 Answer :D Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke ywor ds :b r e a ke v enqua nt i t y , ma ke or buy , t o t a lc o s t ,fix e dc o s t ,va r i a bl ec o s t AACS B:Ana l yt i cs k i l l s 4 6 )Re f e rt ot hei ns t r uc t i o na b ov e .F orwha tr a ng eofo ut putwo ul dy oupr e f e rt ob uy ? A)0-3 0 , 0 0 0uni t spe ry e a r B)3 0 , 0 0 0ormo r euni t sp e ry e a r C)4 0 , 0 0 0ormo r eu ni t sp e ry e a r D)0-4 0 , 0 0 0uni t spe ry e a r Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wor ds :b r e a k e v e nqua nt i t y , r a ng eo fout put ,ma ke o r b uy , fix e dc o s t , v ar i a bl ec o s t AACS B:Ana l yt i cs k i l l s 4 7 )Re f e rt ot hei ns t r uc t i o na b ov e .F orwha tr a ng eofo ut putwo ul dy oupr e f e rt oma k e ? A)3 0 , 0 0 0ormo r eu ni t spe ry e a r B)0-3 0, 0 00uni t spe ry e a r C)0-4 0, 0 0 0uni t spe ry e a r D)4 0 , 0 0 0ormo r eu ni t sp e ry e a r Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wor ds :b r e a k e v e nqua nt i t y , r a ng eo fout put ,ma ke o r b uy , fix e dc o s t , v ar i a bl ec o s t AACS B:Ana l yt i cs k i l l s 4 8 )Re f e rt ot hei ns t r u c t i o na bo ve .Wha tdo est hec o mpa nys a v ef ort hey e arb ys e l e c t i ngt hel o wc o s t opt i on( f ora nnua lr e q ui r e me nt so f4 0, 0 00uni t s ) ? A)$ 1 5 0 , 0 0 0 B)$ 30 0, 0 00 C)$ 5 0, 0 0 0 D)$ 4 0 , 0 0 0 Answer :C Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke ywor ds :b r e a ke v enqua nt i t y , ma ke or buy , t o t a lc o s t ,fix e dc o s t ,va r i a bl ec o s t AACS B:Ana l yt i cs k i l l s



Uset hef ol l owi ngt oans wert heques t i onsbel ow. Apr o po s a lf o ri mpl e me nt i ngane w pr o duc tl i neha sa na nnua lfix e dc o s to f$ 6 0 , 0 0 0 ,v a r i a b l ec o s to f$ 3 5 pe runi tofout put ,a ndr e v enue( s e l l i ngpr i c e )of$ 55pe ru ni tofout put .

4 9)Re f e rt ot h ei ns t r uc t i ona bo ve .Wha ti st hebr e a k e v enqua nt i t y? A)2 , 0 0 0uni t spe ry e a r B)3 , 0 00uni t spe ry e a r C)6 , 0 0 0uni t spe ry e a r D)2 0 , 0 0 0uni t sp e ry e a r Answer :B Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke ywor ds :br e a k e v enqua nt i t y ,t ot a lc os t ,fix e dc os t ,va r i a bl ec os t ,s e l l i ngpr i c epe runi t AACS B:Ana l yt i cs k i l l s 5 0 )Re f e rt ot hei ns t r u c t i o na bo ve .Wha tv ol umeo fo ut putwi l lbene c e s s a r yf o ra na nnua lpr o fito f $ 60 , 0 0 0? A)2 , 0 0 0uni t s B)3 , 0 00uni t s C)6 , 0 0 0uni t s D)2 0 , 0 0 0uni t s Answer :C Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke ywor ds :b r e a k e v e nqua nt i t y , v ol umeofout put ,t o t a lc o s t ,fix e dc o s t ,v ar i a bl ec o s t ,pr o fit AACS B:Ana l yt i cs k i l l s 5 1 )Re f e rt ot hei ns t r u c t i o na bo ve .Wha ts e l l i ngpr i c ewo ul dbene c e s s a r yt og e ne r a t ea na nnua lpr ofitof $ 9 0 , 0 0 0 ,i fe x pe c t e dv ol umei s6 , 0 0 0uni t spe ry e a r( a s s umefix e dc o s t sr e ma i na t$ 6 0, 0 0 0,a ndv ar i a bl ec o s t pe runi ta t$ 3 5 ) ? A)$30/uni t B)$40/uni t C)$50/uni t D)$60/uni t Answer :D Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke ywor ds :br e a k e v enqua nt i t y ,t ot a lc os t ,fix e dc os t ,va r i a bl ec os t ,s e l l i ngpr i c epe runi t AACS B:Ana l yt i cs k i l l s



5 2)Ac o mpa nyi ss c r e e ni ngi de a sf orne ws e r v i c e s . Fi v eal t e r na t i v es e r vi c ei de a sa r ebe i ngc o ns i de r e d. Managementi dent i fiedf ourcr i t er i aandwei ght edt hem asf ol l ows :A=30,B=10, C=20,andD=40. The yha v ea l s oc o meupwi t hs c o r e dv a l ue sf o rt hefiv eal t e r na t i v e sa ndt hef o urc r i t e r i aa ss h own f ol l o wi ng.Ma na ge me ntha sde c i de dt ha ti fa na l t e r na t i v eha sl e s st ha nat o t a ls c o r e dv al ueof6 00 ,i t s h oul da ut o ma t i c a l l yb er e j e c t e d. Us et hepr e f e r e nc ema t r i xt e c h ni q uet ode t e r mi newhi c hi de as ho ul db e a c c e pt e d.

A)s e r vi c e# 1or# 2 B)s e r v i c e# 3or# 4 C)s e r v i c e# 5 D)none Answer :D Re f e r e nc e :Pr e f e r e nc eMa t r i x Di fficul t y:Moder at e Ke y wo r ds :pr e f e r e nc ema t r i x AACS B:Ana l yt i cs k i l l s



5 3 )TheF or s i t eCo mpa n yi ss c r e e n i ngt hr e ene w pr o duc ti de a s . Re s o ur c ec o ns t r a i nt sa l l o wo nl yo nei de a t obec o mme r c i a l i z e da tt hepr e s e ntt i me .Thef o l l o wi nge s t i ma t e sh a v ebe e nma def o rt hefiv e pe r f o r ma nc ec r i t e r i at ha tma na ge me ntf e e l sa r emo s ti mpor t a nt .I ft hefiv ec r i t e r i aa r ee qua l l ywe i ght e d, wha ta r et hebe s ta ndwo r s ta l t e r n a t i v e s ?

A)Ai sb e s t ,a ndBi swo r s t . B)Bi sb e s t ,a ndCi swo r s t . C)Bi sb e s t ,a ndAi swor s t . D)Ci sb e s t ,a ndAi swo r s t . Answer :B Re f e r e nc e :Pr e f e r e nc eMa t r i x Di fficul t y:Moder at e Ke y wo r ds :pr e f e r e nc ema t r i x AACS B:Ana l yt i cs k i l l s



5 4 )Ca l i f o r n i aMa nuf a c t ur i ng ,I nc . i sno we v a l ua t i ngt wone w pr o duc ti de a s , a ndma na g e me ntha s de c i de dt oa ppl yt hepr e f e r e n c ema t r i xme t hod.Thef o l l o wi ngt a bl es ho wsfiv ec r i t e r i awi t hdi ffe r e nt we i ght sa ndi ndi vi dua ls c o r e sofe a c hpr o duc ti de a .I fma na ge me ntha se s t a bl i s h e dat hr e s ho l do f8 0 0 , whi c hpr o duc t ( s )s h oul db ea c c e p t e df o rf ur t he rde v e l o pme nt ?

A)pr oductA B)pr oductB C)Bot hpr oduct sAandB D)Nei t herpr oduc tAnorB Answer :B Re f e r e nc e :Pr e f e r e nc eMa t r i x Di fficul t y:Moder at e Ke y wo r ds :pr e f e r e nc ema t r i x AACS B:Ana l yt i cs k i l l s 5 5 )Choo s i ngt hea l t e r n a t i v et ha ti st he" b e s to ft hewo r s t "u s i ngde c i s i o nma ki ngunde runc e r t a i nt y woul dbe : A)max i mi n. B)max i max . C)Lapl ace . D)mi ni maxr egr et . Answer :A Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywor ds :maxi mi ndec i s i on 5 6 )Choo s i ngt hea l t e r n a t i v et ha ti st heb e s twe i ght e dpa y offus i ngde c i s i onma ki ngunde runc e r t a i nt y woul dbe : A)max i mi n. B)max i max . C)Lapl ace . D)mi ni maxr egr et . Answer :C Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e A18 Co py r i g ht©2 0 1 3Pe a r s o nEduc a t i o n,I nc . pub l i s h i nga sP r e nt i c eHa l l


Keywords:Lapl ace ,wei ght edpayoff 5 7 )Choo s i ngt hea l t e r n a t i v et ha tmi ni mi z e sl o s t o ppo r t uni t yc o s t sus i ngde c i s i onma ki ngunde r unce r t ai nt ywoul dbe: A)max i mi n. B)max i max . C)Lapl ace . D)mi ni maxr egr et . Answer :D Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wo r ds :o ppo r t uni t yc o s t ,mi ni ma xr e g r e t 5 8 )Thede c i s i o nr ul ei nde c i s i o nma ki ngunde runc e r t a i nt yt ha two ul db ebe s tf o rt hema na g e rwhoha s hi g he x pe c t a t i o nswo ul db e : A)max i mi n. B)max i max . C)Lapl ace . D)mi ni maxr egr et . Answer :B Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke ywor ds :max i max 5 9 )Thede c i s i o nr ul ei nde c i s i o nma ki ngunde ru nc e r t a i nt ymo s ta ppr o pr i a t ef o rt hepe s s i mi s t i cma na g e r woul dbe : A)max i mi n. B)max i max . C)Lapl ace . D)mi ni maxr egr et . Answer :A Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywords:pes s i mi s t ,maxi mi n 6 0 )Thede c i s i o nr ul emos ta ppr o pr i a t ef ort her e a l i s t i cma na ge rus i ngde c i s i o nma ki ngunde runc e r t a i nt y woul dbe : A)max i mi n. B)max i max . C)Lapl ace . D)mi ni maxr egr et . Answer :C Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke ywor ds :r e a l i s t ,La pl a c e



Tabl eA. 2 Uset hef ol l owi ngt oans wert heques t i onsbel ow. Acompanyt hati si nt r oduci nganew pr oducthast ochoosebet weent hreedi ffer entmanuf act ur i ng met hods ,r ef er r edt oasmet hodsA,B, andC. Dependi ngont hedemandf ort heproduct ,t heyhave f o r e c a s tdi ffe r e n tl e v e l so fr e v e nuef o rt hey e ar( v al ue sa r ei nt hous a nds ) .Thec o mpa nyha si de nt i fie d t hre eposs i bl es t at esofnat ur ef ore c onomi cgr owt h,andnamedt hem Hi gh,Medi um,andLow.

Me t hodA Me t hodB Me t hodC Me t hodD

Hi gh $80 $22 $9 $44

Me di um $ 61 $ 46 $ 14 $ 55

Low $38 $10 0 $52 $24

6 1)Us i ngt hei nf or ma t i oni nT abl eA. 2 ,whi c ha l t e r na t i v ei sb e s ti na c c or da nc ewi t hade c i s i onc r i t e r i onof max i mi n? A)A B)B C)C D)D Answer :A Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywords:maxi mi n,dec i s i ont heor y AACS B:Ana l yt i cs k i l l s 6 2)Us i ngt hei nf or ma t i oni nT abl eA. 2 ,whi c ha l t e r na t i v ei sb e s ti na c c or da nc ewi t hade c i s i onc r i t e r i onof maxi max? A)A B)B C)C D)D Answer :B Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywords:maxi max,dec i s i ont heor y AACS B:Ana l yt i cs k i l l s 6 3)Us i ngt hei nf or ma t i oni nT abl eA. 2 ,whi c ha l t e r na t i v ei sb e s ti na c c or da nc ewi t hade c i s i onc r i t e r i onof L a p l a c e ? A)A B)B C)C D)D Answer :A Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wor ds :La pl a c e ,de c i s i o nt he o r y A20 Co py r i g ht©2 0 1 3Pe a r s o nEduc a t i o n,I nc . pub l i s h i nga sP r e nt i c eHa l l


AACS B:Ana l yt i cs k i l l s 6 4)Us i ngt hei nf or ma t i oni nT abl eA. 2 ,whi c ha l t e r na t i v ei sb e s ti na c c or da nc ewi t hade c i s i onc r i t e r i onof mi ni maxr egre t ? A)A B)B C)C D)D Answer :B Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywor ds :mi ni maxr egr et AACS B:Ana l yt i cs k i l l s 6 5)Us i ngt hei nf or ma t i oni nT abl eA. 2 ,whi c ha l t e r na t i v ei sb es ti ff ur t he rs t udyr e v e a l e dt ha tt he pr o ba bi l i t yo fh i ghgr o wt hi s0 . 2 ,t hepr ob abi l i t yo fme di um gr o wt hi s0 . 5 ,a ndt hepr ob ab i l i t yofl o w gr o wt hi s0 . 3 ? A)A B)B C)C D)D Answer :A Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke ywor ds :de c i s i ont he or y , r i s k AACS B:Ana l yt i cs k i l l s



Tabl eA. 3 Uset hef ol l owi ngt oans wert heques t i onsbel ow. Acompanyt hati si nt r oduci nganew pr oducthast ochoosebet weenf ourdi ffer entmanuf act ur i ng met hods ,r ef er r edt oasmet hodsA,B, CandD.Dependi ngont hedemandf ort hepr oduct ,t heyhave f o r e c a s tdi ffe r e n tl e v e l so fe x pe ns e sf o rt hey e ar( v al ue sa r ei nt hous a nds ) .Thec o mpa nyha si de nt i fie d t hre eposs i bl es t at esofnat ur ef ore c onomi cgr owt h,andnamedt hem Hi gh,Medi um,andLow.

Me t hodA Me t hodB Me t hodC Me t hodD

Hi gh $ 450 $ 950 $ 375 $ 800

Me di um $670 $320 $575 $400

Low $78 0 $20 0 $77 5 $30 0

6 6 )Us i ngt hei nf or ma t i o ni nT abl eA. 3 ,whi c ha l t e r n a t i v ei sb e s ti na c c o r d anc ewi t ha no pt i mi s t i cout l o ok? A)A B)B C)C D)D Answer :B Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywords:maxi max,dec i s i ont heor y AACS B:Ana l yt i cs k i l l s 6 7)Us i ngt h ei nf or ma t i oni nT abl eA. 3 ,whi c ha l t e r na t i v ei sb e s ti na c c or da nc ewi t hape s s i mi s t i co ut l ook? A)A B)B C)C D)D Answer :C Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywords:maxi mi n,dec i s i ont heor y AACS B:Ana l yt i cs k i l l s 6 8)Us i ngt hei nf or ma t i oni nT abl eA. 3 ,whi c ha l t e r na t i v ei sb e s ti na c c or da nc ewi t hade c i s i onc r i t e r i onof L a p l a c e ? A)A B)B C)C D)D Answer :B Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wor ds :La pl a c e ,de c i s i o nt he o r y AACS B:Ana l yt i cs k i l l s A22 Co py r i g ht©2 0 1 3Pe a r s o nEduc a t i o n,I nc . pub l i s h i nga sP r e nt i c eHa l l


6 9)Us i ngt hei nf or ma t i oni nT abl eA. 3 ,whi c ha l t e r na t i v ei sb e s ti na c c or da nc ewi t hade c i s i onc r i t e r i onof mi ni maxr egre t ? A)A B)B C)C D)D Answer :D Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywor ds :mi ni maxr egr et AACS B:Ana l yt i cs k i l l s 7 0)Us i ngt hei nf or ma t i oni nT abl eA. 3 ,whi c ha l t e r na t i v ei sb es ti ff ur t he rs t udyr e v e a l e dt ha tt he pr o ba bi l i t yo fh i ghgr o wt hi s0 . 2 ,t hepr ob abi l i t yo fme di um gr o wt hi s0 . 5 ,a ndt hepr ob ab i l i t yofl o w gr o wt hi s0 . 3 ? A)A B)B C)C D)D Answer :B Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke ywor ds :de c i s i ont he or y , r i s k AACS B:Ana l yt i cs k i l l s Tabl eA. 4 Uset hef ol l owi ngt oans wert heques t i onsbel ow. I nc h oo s i ngb e t we e nt hr e ene wj o bs , J o eMB Ac o ns i de r st hepo t e nt i a lpa y o ffso v e rt hene x tt hr e ey e a r s . Thef o l l o wi ngt a bl ec o nt a i nst hepa y offs , gi v e nt hes p e e dofpr omo t i oni ne a c ho ft heo r g a ni z a t i ons . The pr o ba bi l i t yoff a s tpr o mo t i oni s0 . 6 ,a ndt hepr o ba bi l i t yofs l o w pr o mo t i oni s0 . 4 .

Al t e r na t i ve A.Hi ghflyi ngc ons ul t ant B.Ut i l i t yanal ys t C. Re s e ar c has s i s t ant

Sl ow Pr omot i on ( $18 0, 00 0) $ 200, 000 $ 250, 000

Fas tPr omot i on $600, 000 $400, 000 $260, 000

7 1 )Us et hei nf or ma t i o ni nT abl eA. 4 .Whi c ha l t e r n a t i v ei sb e s t ,gi v e nt hema t r i xpa y off? A)TheAal t er nat i vewoul dbechos enus i ngt hemaxi mi ndec i s i onr ul e. B)TheBal t er nat i vewoul dbechosenus i ngt hemaxi maxdec i s i onr ul e. C)TheCa l t e r na t i v ewo ul db ec h os e nus i ngt heLa pl a c ede c i s i o nr ul e . D)TheCal t er nat i vewoul dbechos enus i ngt hemaxi mi ndec i s i onr ul e. Answer :D Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywor ds :maxi mi n,payoff AACS B:Ana l yt i cs k i l l s A23 Co py r i g ht©2 0 1 3Pe a r s o nEduc a t i o n,I nc . pub l i s h i nga sP r e nt i c eHa l l


7 2 )Us et hei nf o r ma t i o ni nT a bl eA. 4a ndt heLa pl a c ede c i s i o nr ul e .Thewe i g ht e dpa y o ffi s : A)l e s st ha n$ 20 0 , 0 00i ft hehi ghflyi ngc o ns ul t a ntj obi ss e l e c t e d. B)mor et ha n$ 28 0, 0 00i ft her e s e a r c ha s s i s t a ntj obi ss e l e c t e d. C)mor et ha n$ 28 0, 0 00i ft heut i l i t ya na l ys tj obi ss e l e c t e d. D)hi ghe s tf ort her e s e a r c ha s s i s t a ntpos i t i on. Answer :C Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e AACS B:Ana l yt i cs k i l l s 7 3 )Us et hei nf o r ma t i o ni nT a bl eA. 4a ndt hemi ni ma xr e g r e tde c i s i o nr ul e .Thema x i mum r e g r e ti s : A)l e s st ha n$ 30 0 , 0 00i ft hehi ghflyi ngc o ns ul t a ntj obi ss e l e c t e d. B)l e s st ha n$ 30 0, 0 00i ft heut i l i t ya na l ys tj obi ss e l e c t e d. C)l e s st ha n$ 30 0, 0 00i ft her e s e ar c ha s s i s t a ntj obi ss e l e c t e d. D)l owe s tf ort her e s e a r c ha s s i s t a ntj ob. Answer :B Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywor ds :mi ni maxr egr et AACS B:Ana l yt i cs k i l l s 7 4 )Us et hei nf o r ma t i o ni nT a bl eA. 4a ndt hee x pe c t e dv a l uer ul e .Whi c hs t a t e me nti sT RUE? A)Thee x pe c t e dv a l ueoft hec o ns u l t a ntj o bi smo r et ha n$ 3 0 0 , 0 0 0 . B)Thee xpe c t e dv al ueoft heut i l i t ya na l ys tj o bi smo r et ha n$ 3 00 , 0 0 0. C)Thee xpe c t e dv al ueoft her e s e a r c ha s s i s t a ntj obi sl e s st ha n$ 25 0 , 0 0 0. D)Thej obwi t ht hehi ghe s te x pe c t e dv al uei st her e s e a r c ha s s i s t a nt . Answer :B Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywords:expec t edval ue AACS B:Ana l yt i cs k i l l s 7 5 )Whe nus i ngde c i s i ont r e ea na l ys i s : A)t hesum oft heexpec t edpayoffsmus tal wayse qualzer o. B)r o undno de sr e pr e s e ntde c i s i o npo i nt s . C)t her emus tbemor es quar enodest hanr oundnodes . D)pr o ba bi l i t i e sf ora l lb r a nc h e sl e a vi ngac h anc eno demus ts u mt o1. 0 . Answer :D Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Moder at e Ke ywor ds :de c i s i ont r e e , pr o ba bi l i t y ,node s AACS B:Ana l yt i cs k i l l s



7 6)I nor de rf orade c i s i ont r e et obeava l ua bl ede c i s i ont ool ,t hede c i s i onma ke rs houl dbei nac ondi t i on of : A)c e r t a i nt y . B)r i s k. C)unc e r t a i nt y . D)e q ui l i b r i um. Answer :B Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke ywor ds :de c i s i ont r e e , r i s k AACS B:Ana l yt i cs k i l l s 7 7 )Ano pe r a t i o nsma na ge rh a sde v e l o pe dt hi sde c i s i ont r e et oe v al ua t et hea l t e r n a t i v e sf orapl a nne d e x pa ns i on.I ft hepr o ba bi l i t yofhi ghde ma ndi s0 . 6 ,wha ti st hebe s tc o ur s eofa c t i on?

A)Al t e r n a t i v eA B)Al t e r na t i v eB C)Al t e r na t i v eC D)Al t e r n a t i v eD Answer :A Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Moder at e Ke ywor ds :de c i s i ont r e e , r i s k AACS B:Ana l yt i cs k i l l s



78)Amar ket i ngdi r ec t ormus tdec i deamongf oural t er nat i vesf oranew mar ket i ngcampai gn.She a s c e r t a i nst ha tt hepr o ba bi l i t yo fh i ghde ma ndi s0 . 8a ndt hepr o ba bi l i t yo fl o w de ma ndi s0 . 2 .Wha ti st he be s tc hoi c ewi t ht hepa yoffss howni nt het r e e ?

A)Al t e r n a t i v eA B)Al t e r na t i v eB C)Al t e r na t i v eC D)Al t e r n a t i v eD Answer :B Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Moder at e Ke ywor ds :de c i s i ont r e e , r i s k AACS B:Ana l yt i cs k i l l s



79)Amar ket i ngdi r ec t ormus tdec i deamongf oural t er nat i vesf oranew mar ket i ngcampai gn.She a s c e r t a i nst ha tt hepr o ba bi l i t yo fh i ghde ma ndi s0 . 4 5andt hepr ob abi l i t yo fl o w de ma ndi s0 . 5 5 .Wha ti s t heb e s tc h oi c ewi t ht hepa y o ffss ho wni nt het r e e ?

A)Al t e r n a t i v eA B)Al t e r na t i v eB C)Al t e r na t i v eC D)Al t e r n a t i v eD Answer :C Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Moder at e Ke ywor ds :de c i s i ont r e e , r i s k AACS B:Ana l yt i cs k i l l s



8 0 )Ge o r g eBur de l lmus tde c i dea mo ngf o ura l t e r n a t i v e sf o ra noi le x pl or a t i onpr o j e c t .Hee s t i ma t e st ha t t hepr o ba bi l i t yofhi ghde ma ndi s0 . 3a ndt hepr ob abi l i t yo fl o w de ma ndi s0 . 7 .Wha ti st heb e s tc h oi c e wi t ht hepayoffss howni nt het r ee?

A)Al t e r n a t i v eA B)Al t e r na t i v eB C)Al t e r na t i v eC D)Al t e r n a t i v eD Answer :D Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Moder at e Ke ywor ds :de c i s i ont r e e , r i s k AACS B:Ana l yt i cs k i l l s



8 1)Ana l yz et hef ol l o wi ngde c i s i ont r e e . De t e r mi net hemi s s i ngpr o ba bi l i t i e s , a ndi de nt i f yt heal t e r na t i v e t hatmaxi mi zest heexpect edpayoff.

A)Opt i o n1 ,wi t hane xpe c t e dpa y o ffo fl e s st ha n$ 2 5 B)Opt i on1, wi t hanexpec t edpayoffof$25ormore C)Opt i o n2 ,wi t ha ne x pe c t e dpa y o ffo fl e s st ha n$ 2 5 D)Opt i on2, wi t hanexpec t edpayoffof$25ormor e Answer :D Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Har d Ke ywor ds :de c i s i ont r e e , r i s k AACS B:Ana l yt i cs k i l l s



8 2)Ana l yz et h ef ol l o wi ngde c i s i ont r e e . Af t e rde t e r mi ni ngt hemi s s i ngpr oba bi l i t i e s , i de nt i f ywhi c h a l t e r na t i v e( Opt i o n1orOpt i o ns2 )ha st hehi ghe re x pe c t e dpa y o ff.Wha ti st hee x pe c t e dpa y o ff?

A)Opt i o n1 ,wi t hane xpe c t e dpa y o ffo fl e s st ha n$ 2 5 B)Opt i on1, wi t hanexpec t edpayoffof$25ormore C)Opt i o n2 ,wi t ha ne x pe c t e dpa y o ffo fl e s st ha n$ 2 5 D)Opt i on2, wi t hanexpec t edpayoffof$25ormor e Answer :B Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Har d Ke ywor ds :de c i s i ont r e e , r i s k AACS B:Ana l yt i cs k i l l s



8 3)Ana l yz et h ef ol l o wi ngde c i s i ont r e e . Af t e rde t e r mi ni ngt hemi s s i ngpr oba bi l i t i e s , i de nt i f ywhi c h a l t e r na t i v e( Opt i o n1orOpt i o ns2 )ha st hehi ghe re x pe c t e dpa y o ff.Wha ti st hee x pe c t e dpa y o ff? .

A)Opt i o n1 ,wi t hane xpe c t e dpa y o ffo fl e s st ha n$ 3 5 B)Opt i o n1 ,wi t ha ne x pe c t e dpa y o ffo fnol e s st ha n$ 3 5 C)Opt i o n2 ,wi t ha ne x pe c t e dpa y o ffo fl e s st ha n$ 3 5 D)Opt i on2, wi t hanexpec t edpayoffofmor et han$35 Answer :D Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Har d Ke ywor ds :de c i s i ont r e e , r i s k AACS B:Ana l yt i cs k i l l s 8 4 )The_ _ __ _ _ __i st hev ol umea twhi c ht o t a lr e v e nue se q ua lt o t a lc o s t s . Ans we r :b r e a k e v e nq ua nt i t y Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke y wo r ds :b r e a k e v e nq ua nt i t y 8 5)_ __ _ __ __i st hepo r t i onoft o t a lc o s tt ha tr e ma i nsc o ns t a ntr e g ar dl e s so fc ha nge si nl e v el so fo ut put . Ans wer :Fi xedc ost Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Keywor ds :fixedc os t



8 6 )_ _ _ __ _ __i sat e c hni quef o rs y s t e ma t i c a l l yc h angi ngpa r a me t e r si namode lt ode t e r mi net hee ffe c t so f s uc hc hanges . Ans we r :S ens i t i vi t ya na l ys i s Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke ywor ds :s e ns i t i vi t ya na l ys i s 8 7 )_ _ _ _ _ _ __i sag e ne r a la ppr o a c ht ode c i s i o nma k i ngwhe nt heout c o me sa s s o c i a t e dwi t ha l t e r na t i v e s a r eo f t e ni ndo ubt . Ans we r :De c i s i o nt he o r y Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke ywor ds :de c i s i ont h e or y , a l t e r na t i v es 8 8)I nde c i s i ont he or y , t hedi ffe r e ntc o ur s e so fa c t i ont ha tade c i s i onma ke rc a nc ho os ea r ec a l l e d ________. Ans we r :a l t e r na t i v es Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke ywor ds :a l t e r na t i ve s , de c i s i ont he or y 8 9 )Ac h a nc ee v e ntt ha tha sa ni mpa c to nt heo ut c o meo ft hec h oi c eb uti sn o tunde rt hema na g e r ' sc o nt r o l i sc a l l e da ( n )_ __ __ __ _. Ans we r :s t a t eo fna t ur e Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wor ds :e v e nt ,s t a t eo fna t ur e 9 0 )A( n)_ _ __ _ _ __s h owst hea mo unto fr e v e nuef ore a c ha l t e r n a t i v ei fe a c hpos s i bl ee v e nto c c ur s . Ans wer :payofft abl e Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke ywor ds :pa y offt a b l e ,e ve nt ,a l t e r na t i v es 9 1)Thede c i s i onr ul e__ __ __ __i sa l s or e f e r r e dt oa st hepe s s i mi s t ' sc r i t e r i on. Ans wer :maxi mi n Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wor ds :ma x i mi n,pe s s i mi s t ,de c i s i onr u l e 9 2)Thede c i s i onr ul e__ __ __ __i sa l s or e f e r r e dt oa st heopt i mi s t ' sc r i t e r i on. Ans we r :max i max Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wo r ds :ma x i ma x ,o pt i mi s t ,de c i s i o nr ul e



9 3)Thede c i s i onr ul e__ __ __ _ _c hoos e st heal t e r na t i v et ha ti st he" b es toft hebe s t . " Ans we r :max i max Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywords:maxi max,dec i s i onrul e 9 4 )Ana na l ys tt ha tc a n' ta s s i gnpr o ba bi l i t i e st ot h ee ve nt smus tb ee ng ag e di nde c i s i onma ki ngunde r ________. Ans we r :unc e r t a i nt y Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wor ds :unc e r t a i nt y , e v e nt s 9 5 )Thede c i s i o nr ul e_ _ _ __ _ _ _c h oo s e st hea l t e r n a t i v ewi t ht heb e s twe i ght e dpa y off. Answer :Lapl ac e Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wor ds :La pl a c e ,de c i s i o nr u l e 9 6 )A( n)_ _ _ _ _ _ __i st hedi ffe r e nc eb e t we e nagi v e npa y o ffa ndt heb e s tpa y o fff o ragi v e ns t a t eo fn a t ur e . Ans wer :r egre t Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wo r ds :mi ni ma x ,de c i s i o n,r e g r e t 9 7)I fpr o ba bi l i t i e sf ore v e nt sc a nbee s t i ma t e d, t he nt hes i t ua t i onf a c e db yt hede c i s i onma ke ri sc a l l e d ________. Ans we r :de c i s i o nma ki ngunde rr i s k , r i s k Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wo r ds :de c i s i o nma ki ng ,r i s k 9 8)A( n)_ __ __ _ __i sas c he ma t i cmode lofa l t e r na t i v esa va i l a bl et ot h ede c i s i onma ke r ,a l ongwi t ht he i r po s s i b l ec o ns e q ue nc e s . Ans we r :de c i s i o nt r e e Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Moder at e Ke ywor ds :de c i s i ont r e e , a l t e r na t i v es 9 9 )A( n)_ _ __ _ _ __i st ypi c a l l yus e dt or e pr e s e n ta ne v e ntno dei nade c i s i o nt r e e . Ans we r :c i r c l e Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Moder at e Ke y wor ds :de c i s i ont r e e ,e v e ntno de



1 0 0 )The_ _ __ _ _ __node sh a vepr o ba bi l i t i e sa s s o c i a t e dwi t ht he mi nade c i s i ont r e e . Ans we r :e v ent( orc i r c l e ) Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Moder at e Ke y wor ds :de c i s i ont r e e ,e v e ntno de 1 0 1 )De c i s i o nt r e e sa r et ypi c a l l yus e di nt hes i t ua t i o nofde c i s i o nma ki ngunde r_ _ _ _ __ _ _. Ans we r :r i s k Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Moder at e Ke ywor ds :de c i s i ont r e e , a l t e r na t i v es , r i s k ,DMUR 102)Whatas s umpt i onsar emadewhenus i ngbr eakevenanal ysi s? Ans we r :Br e a k e v e na na l ys i si sus e f ult oe va l ua t ene w ore x i s t i ngpr oduc t sors e r vi c e sa ndt oc ompa r e pr o duc t i o nme t ho ds ; ho we v e r ,de c i s i o nma k e r swhous et hi smo de lma kea s s u mpt i o ns . T ypi c a l l y , s i ng l e va l ue sa r ep r o vi de df orfix e da ndv ar i a bl ec o s ta ndf orr e v e nue s . Thi sr e s ul t si nwonde r f ul l ys t r a i ghtl i ne s t ha tdono tr e fle c tr e a l i t i e ss uc ha ss t a r t upc o s t s , e c onomi e sofs c a l e ,pr i c ebr e a kso ffe r e dt ov ol ume pur c ha s e r s , a nddi s e c o no mi e so fs c a l e . Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Eas y Ke ywor ds :br e a k e v enana l ys i s , fix e dc o s t , va r i a bl ec o s t 1 0 3 )Wh ys h oul dade c i s i onma ke re ng ag ei ns e n s i t i vi t ya na l ys i s ? Ans we r :Se ns i t i vi t ya na l ys i si sat e c h ni quef o rs y s t e ma t i c a l l yc h angi ngpa r a me t e r si namo de lt o de t e r mi net hee ffe c t so fs u c hc h a ng e s . Mo de l sa r ec r e a t e dwi t ha s s umpt i o nsa n dt her e s ul t sg i v e nb yt he us eo famo de la r eo nl ya sg oo da st hea s s u mpt i o nst ha twe r ema dei nc r e a t i ngt hemo de l .F ort e c h ni que s s uc ha st heLa pl a c ec r i t e r i on,i ft hepr o ba bi l i t yf oro nes t a t eofna t ur eo rpa y offwa se s t i ma t e di nc o r r e c t l y , t her e s u l tmi ghts u gg e s tac ho i c ef a rdi ffe r e n tf r om t hec h oi c ema dei fabe t t e re s t i ma t ewe r eus e d. Re f e r e n c e :De c i s i onThe or y Di fficul t y:Eas y Ke ywor ds :s e ns i t i vi t ya na l ys i s



1 0 4 )Thes i t es e l e c t i o nt e a my ouf o r me dl a s tq ua r t e rme e t swi t hy oui nt hec o nf e r e nc er o om t opr e s e ntt he r e s ul t so ft he i rt hought f ula na l ys i s . The yha v ec o l l e c t i v el yl ogge d2 00 , 0 00f r e q ue ntfly ermi l e swhi l e c o nduc t i ngt he i ri n ve s t i g at i on.Thec o nf e r e nc er oo mt a bl es a gsunde rt hewe i ghtoft he i rma s s i v er e po r t a nda l lt e a m me mb e r ss p or tde e pt a ns . Ast hel e a de rdr o ne so na bo utt he i rc o mpl e t e l yo bj e c t i v ea ppr o a c h t ot h epr o bl e m hepr o j e c t sas l i dec ont a i ni ngt h ef ol l o wi ngi nf or ma t i ona boutt he i rl oc a t i onofc hoi c e .

Wha tque s t i o nsdoy ou,ac ons c i e nt i o usvi c e pr e s i de ntl e v e le x e c ut i v e ,ha v ef o rt het e a ma boutt hi s por t i onoft he i ra na l ys i s ? Ans we r :Thepr e f e r e nc ema t r i xpr o vi de sav ehi c l ef orc o nv er t i ngas ubj e c t i v ede c i s i oni nt oade c i s i ont ha t a ppe a r smor eo bj e c t i v e.Thi sa na l ys i ss houl dbeque s t i one dr e g a r di ngt hec hoi c eo fc r i t e r i a ,t hewe i ght s a s s i gne dt ot h ec r i t e r i a ,a ndt hes c o r e sa s s i gne dt oea c ha l t e r na t i v e.Ho w di dt hec o mmi t t e es e t t l eo n i nf r a s t r uc t ur e , ut i l i t yc os t ,l a bors k i l l ,l a borc os t ,a ndpol i t i c a lc l i ma t ea st hemos ti mpor t a ntf a c t or s ?How we r ewe i ght sa nds c or e sa s s i gne d?I ft hi si st heonl ys i t e ' sr e s ul t spr e s e n t e d,t he nwha twa st hema r g i no f vi c t or ya ndwha twe r et heo t h ers i t e s ?Compa r i ngs c o r e si sa l s oa ni s s ue ;t he r ei st e mpt a t i ont ot r e a tt he s c o r e sa sha vi nggr e a t e rs i gni fic a nc et ha nt he yac t ua l l yc ar r y . Re f e r e nc e :Pr e f e r e nc eMa t r i x Di fficul t y:Moder at e Ke ywor ds :pr e f e r e nc ema t r i x ,c r i t e r i a ,we i ght 1 0 5 )Li s ta ndde s c r i bede c i s i o nr u l e st ha ta r eus e df orde c i s i onma ki ngunde ru nc e r t a i nt y . Ans wer :Thedeci s i onr ul esi ncl udemaxi mi n,maxi max,Lapl ace ,andmi ni maxr egre t .Maxi mi nchooses t he" be s toft hewor s t "a ndi sf ort hepe s s i mi s t .Ma xi ma xc hoos e st he" be s toft hebe s t "a ndi sf ort he o pt i mi s t .La pl a c ec ho os e st hebe s twe i ght e dpa y offa ndi sf ort her e a l i s t .Mi ni ma xr e gr e tc h oo s e st hebe s t " wor s tr e gr e t . " Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywor ds :Lapl ac e, mi ni max, maxi max, mi ni max, r egr et 106)Pr ovi deanexampl eoft woormoreevent swher eyouasadec i s i onmakerwoul dt r ul ybeengagedi n de c i s i o nma ki ngunde runc e r t a i nt y . Wh ya r ey oui nc a pa b l eo fde c i di ngwhi c he ve nti smo r el i k e l yt ha n t heot he r ( s ) ? Answer :Answer swi l lvar y Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Ke y wor ds :unc e r t a i nt y , e v e nt s



1 0 7 )Gi v e napa y o fft a bl ei nade c i s i o nma ki ngunde rr i s ks c e na r i o ,wha tv a l uei sde r i v e df r o ma ppl y i ng a l lf ourc r i t e r i apr e s e nt e di ny ourb ooka nds e l e c t i ngt hea l t e r na t i v et ha ti sc h os e nt hemos tt i me sb yt he f ourc r i t e r i a? Ans wer :Thedeci s i onr ul esi ncl udemaxi mi n,maxi max,Lapl ace ,andmi ni maxr egre t .Maxi mi nchooses t he" be s toft hewor s t "a ndi sf ort hepe s s i mi s t .Ma xi ma xc hoos e st he" be s toft hebe s t "a ndi sf ort he o pt i mi s t .La pl a c ec ho os e st hebe s twe i ght e dpa y offa ndi sf ort her e a l i s t .Mi ni ma xr e gr e tc h oo s e st hebe s t " wor s tr e g r e t . "Appl yi ngano ve r a l lwi nne rt ot h ef ourc r i t e r i ami ghtpe r mi tt hede c i s i onma ke rt os a t i s f y t hea ppe t i t ef orr i s koft hegr e a t e s tnumb ero fs t a ke ho l de r s . Themi nds e t st ha tdr i v eade c i s i o nma ke r t o wa r dso nec r i t e r i o no ra no t he ra r es u c ht ha ta na v e r a g eo ft he s ea ppr o ac h e smo s tpr o ba bl ywi l lho l dno a ddi t i ona lc a c he tf ora nys i ngl eopt i mi s torpe s s i mi s torc e nt r i s t . Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywor ds :Lapl ac e, mi ni max, maxi max, mi ni max, r egr et 1 0 8 )Unde rwha tc o ndi t i onsc a nde c i s i ont r e e sb eus e f ul ? Ans we r :De c i s i o nt r e e sa r eu s e f ulwhe nt he r ei sunc e r t a i nt ya nds e q ue nt i a lde c i s i o nsa r ei n vol v e d. Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Eas y Ke ywor ds :de c i s i ont r e e , s e que nt i a lde c i s i ons 1 0 9 )As i ng l ef a c t o r ypr o duc e st wodi ffe r e ntpr o duc t sdur i nge a c hha l fo ft hey e a rwi t he q ui v a l e ntfix e d c os t ;f r om J anuar yt hroughJ unet heypr oduc ePr oductAandf r om J ul yt hroughDec embert heyproduce Pr o duc tB.Pr o duc tAc o s t st wi c ea smuc ht opr o duc ea n di ss o l da tt wi c et hepr i c eo fPr o duc tB.De r i v e a ne x pr e s s i o nr e l a t i ngt h ebr e a k e v e nqua nt i t yofPr oduc tAt ot ha to fPr o duc tB. Answer :

Theb r e a k e v e npoi ntf orPr oduc tAi sha l ft heq ua nt i t yf o rPr o duc tB. Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Har d Ke ywor ds :br e a k e v enqua nt i t y , fix e dc o s t ,v ar i a bl ec os t AACS B:Ana l yt i cs k i l l s



110)Anew mi norl eaguebas ebal lt eam i sc omi ngt ot ownandt heowner shavedec i dedt obui l danew s t a di um,e i t he rs ma l lorl a r g e .Thes uc c e s soft het e a m wi t hr e g a r dt ot i c k ets a l e swi l lbee i t he rhi ghor l o w wi t hpr o ba bi l i t i e sof0 . 7 5a nd0 . 2 5,r e s pe c t i v el y .I fde ma ndf ort i c k e t si shi gh,t hel a r g es t a di um woul d pr o vi deapa y offo fa ppr o xi ma t e l y$ 2 0mi l l i o n.I ft i c k e ts a l e sa r el o w,t hel o s so nt hel a r g es t a di um woul d be$5mi l l i on.I fas mal ls t a di um i sc ons t r uc t e d,a ndt i c ke ts al e sar el ow,t hepa yoffi s$500 , 000af t e r de duc t i ngt hec os tofc o ns t r uc t i on.I ft i c k ets a l e sa r ehi gh,t het e a mc a nc hoos et obui l da nuppe rde c k ,or t oma i nt a i nt hee xi s t i ngf a c i l i t y .Ex pa ndi ngt hes t a di um i nt hi ss c e na r i oha sapa y offof$ 10mi l l i on, wher easmai nt ai ni ngt hes amenumberofs eat shasapayoffofonl y$3mi l l i on. a .Dr a w ade c i s i o nt r e ef ort hi spr o bl e m. b.Wha ts houl dmanage me ntdot oac hi e vet hehi ghe s te xpe c t e dpa yoff? Answer :

S ma l lS t a di um:0 . 2 5( $ 50 0 , 0 0 0)+0 . 7 5 ( $ 1 0 , 0 00 , 0 00 )=$ 7 , 6 25 , 0 0 0 La r g eS t a di um:0 . 2 5( $ 5 , 0 00 , 0 00 )+0 . 7 5 ( $ 2 0 , 0 0 0, 0 0 0)=$ 13 , 7 50 , 0 00 S e l e c tt hel a r g es t a di um b a s e do ne x pe c t e dv a l ue . Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Moder at e Ke ywor ds :de c i s i ont r e e , r i s k AACS B:Ana l yt i cs k i l l s



111)TheHi l lO' BeansCoffeeCompanyoper at esac hai nofc offees hopsdownt ownandhasdeci dedt o ope nane ws t or e . Thede ma ndwi l lbewe a k,f a i r ,ors t r o ng;pr oba bi l i t i e sa r e0 . 2 5, 0 . 3 0 ,a nd0 . 4 5 , r e s pe c t i ve l y . I ft hec ompa nyi ns t a l l sas ma l lboo t ht ha ts e l l so nl yc o ffe e ,t hea s s o c i a t e dpa y offsa r e$ 25 , 0 00 ;2 5 , 0 0 0;a nd $ 1 0 0, 0 0 0f orwe a k,f a i r ,a nds t r o ngde ma nd.I ft hec o mpa nyc h oos e sa ne x pa nde df a c i l i t yt h a to ffe r s s a n dwi c h e sa ndb r e a k f a s tf o ods , i tmus tb ui l daki t c h e na ndr e n ta ddi t i o na ls p a c e .Thepa y o ffsf o ra n e x pa nde df a c i l i t ya r e$ 20 0 , 0 0 0,$ 25 , 0 00 ,a nd$ 50 0, 0 00 . a .Dr a w ade c i s i o nt r e ef ort hi spr o bl e m. b.Wha ts houl dmanage me ntdot oac hi e vet hehi ghe s te xpe c t e dpa yoff? Answer :

Sma l l :. 2 5( <2 5, 0 00 >)+. 3 0( 2 5, 0 00 )+. 4 5( 1 00 , 0 00 )=4 6, 2 50 Ex pa nd:. 2 5( <2 00 , 0 00 >)+. 3 0 ( <2 5 , 0 0 0>)+. 4 5( 5 00 , 0 00 )=1 6 7, 5 00 The r e f o r e , e x pa ndb a s e do nt hee x pe c t e dv a l ue . Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Moder at e Ke ywor ds :de c i s i ont r e e , r i s k AACS B:Ana l yt i cs k i l l s



1 1 2 )Ke i t hMo nr o ei sde c i di ngamo ngf o ura l t e r na t i v e sa n dfle s he so utt hede c i s i o nt r e es ho wnb e l o w.He ha sde v e l o pe de x c e l l e nte s t i ma t e so fpa y offsb uta dmi t sh eha sn oc l uea boutt hepr ob abi l i t i e sf ort het wo s t a t e sofna t ur e . Hewa nt st oc o ve ra l lofhi sba s e s , s ohewoul dl i k et oc a l c ul a t et hepr o ba bi l i t yofhi gh de ma ndf o rwhi c he a c ha l t e r na t i v ei ss upe r i o r .Ana l y zet hi ss i t ua t i o na ndma ker e c o mme nda t i o nsf o r hi m.Hepr omi s est ocutyoui nf or30% oft hepr ofit si fyoucanshow hi m how t ocal cul at et her anges .

Ans we r :Appr o ac h est ot hi spr o bl e m ma yva r y . Thev a l uef o re a c ha l t e r n a t i v ei sgi v e nb yt hi ss e to f e qua t i ons :

Thes e c o nds e to fe q ua t i o nsc r e a t el i ne sa sdi s p l a y e di nt hegr a ph,whi c hs h o wst hee x pe c t e dmo ne t a r y va l ueoft hef oura l t e r na t i v espl o t t e da ga i ns tt hepr o ba bi l i t yofhi ghde ma nda si tr a nge sf r o m 0t o1.



Thegr a phs h owst ha tAl t e r n a t i v eDi si ni t i a l l ys u pe r i o r ,gi vi ngwa yt oAl t e r n a t i v eC,whi c hyi e l dst o Al t e r n a t i v eA,whi c hi ss u ppl a nt e db yAl t e r n a t i v eBa st hepr o ba bi l i t yofhi ghde ma ndi nc r e a s e sf r o m 0t o 1 .The s et hr e ei nt e r s e c t i o nso nt hegr a phc a nb ede t e r mi ne db ys e t t i ngupt hr e es e t so fs i mul t a ne ous e qua t i ons .

Tos ummar i ze : Ra nge Be s tAl t e r na t i ve 0. 0-0. 4 167 D 0. 4 167-0. 5 C 0. 5-0. 7 143 A 0. 7 143-1. 0 B Re f e r e nc e :De c i s i onT r e e s Di fficul t y:Har d Ke ywor ds :de c i s i ont r e e , r i s k AACS B:Ana l yt i cs k i l l s



1 1 3 )Ac o mpa nyi ss c r e e n i ngi de a sf orn e ws e r vi c e s .F oura l t e r n a t i v es e r vi c ei de a sa r eb e i ngc o ns i de r e d . Managementi dent i fiedf ourcr i t er i aandwei ght edt hem asf ol l ows :A=40,B=30, C=20,andD=10. The yha v ea l s oc o meupwi t hs c o r e dv a l ue sf o rt hefiv eal t e r na t i v e sa ndt hef o urc r i t e r i aa ss h own f ol l o wi ng.Ma na ge me ntha sde c i de dt ha ti fa na l t e r na t i v eha sl e s st ha nat o t a ls c o r e dv al ueof6 00 ,i t s h oul da ut o ma t i c a l l yb er e j e c t e d. Us et hepr e f e r e nc ema t r i xt e c h ni q uet ode t e r mi newhi c hi de as ho ul db e a c c e pt e d.

Answer :

The r e f or e , s e l e c tAl t e r na t i v e1 ,wi t hawe i ght e ds c o r eof7 4 0. Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke ywor ds :br e a k e v enqua nt i t y , fix e dc o s t ,v ar i a bl ec os t ,t o t a lc o s t AACS B:Ana l yt i cs k i l l s



1 1 4 )Ama nuf a c t ur i ngfir mi sc ons i de r i nga ne nt i r e l yne w pr oduc tt ha twi l lr e qui r ea ddi t i ona lc a pi t a l e qui pme nt ,t r a i ni ng,a nda na ddi t i ont ot he i re x i s t i ngf a c i l i t yt ha twi l lc os t$ 50 , 0 00pe ry e ar . Thepr o j e c t e d r e t a i lpr i c ei s$ 4 5pe runi t ,a ndt heva r i a bl ec os tofpr o duc t i oni s$ 1 2. 5 0.Wha ti st hebr e a k e v enf ort hi s pr o duc t ?S ol v eus i ngb ot ht hegr a phi c a la nda l g e br a i ca ppr o a c he s . Answer :

Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke ywor ds :br e a k e v enqua nt i t y , fix e dc o s t ,v ar i a bl ec os t ,t o t a lc o s t AACS B:Ana l yt i cs k i l l s



115)Amanuf act ur i ngfir mi sc ons i der i ngwhet hert opr oduceorout s our cet hepr oduct i onofanew pr o duc t .I ft he ypr o duc et hei t e mt he ms e l v es , t he ywi l li nc urafix e dc o s tof$ 95 0 , 0 0 0pe ry e a r ,buti ft he y out s o ur c eo ve r s e a st he r ewi l lbea$ 1. 5mi l l i onc o s tpe ry e a r .Thea dva nt a geofout s o ur c i ngo ve r s e a si st he va r i a bl ec os tof9 5¢pe runi t ,whi c hi saf r a c t i onoft he i r$ 43 /uni tc o s ti nt he i ro wnuni ons h op.Re ga r dl e s s whe r et he s ede v i c e sa r ema de ,t he ywi l ls e l lf or$ 9 8e a c h.Wha ti st hebr e a k e v e nqua nt i t yf o re a c h a l t e r na t i v e?Sol v et hi spr o bl e m gr a phi c a l l ya nda l ge br a i c a l l y . Answer : F $1,500,000 / year Ov e r s e a s : = =1 5 , 4 5 5. 9 5uni t s p - c $98 / unit - $0.95/unit F $950,000 /year I nhous e : = =1 7, 2 72 . 7 3uni t s p - c $98 / unit - $43/unit

Re f e r e n c e :Br e a k Ev e nAna l ys i s Di fficul t y:Moder at e Ke ywor ds :br e a k e v enqua nt i t y , fix e dc o s t ,v ar i a bl ec os t ,t o t a lc o s t AACS B:Ana l yt i cs k i l l s



116)Acompanyt hati si nt r oduci nganew pr oducthast ochoosebet weenf ourmar ket i ngpl ans,A t hr o ug hD.Thema r k e t i ngpl a nsa r ef o r e c a s t e dt oha v ev ar y i ngpa y o ffs , de pe ndi ngont hel e v e lo f a dv e r t i s i ng. Thepr o ba bi l i t yo fh i g hde ma ndi s0 . 6a ndo fl o w de ma nd0 . 4 .Us et hef o l l o wi ngde c i s i o n r ul e st os e l e c tt hema r k e t i ngpl a n:ma x i mi n,ma x i ma x ,mi ni ma xr e g r e t , La pl a c e , a nde x pe c t e dv a l ue .

Answer :



Re f e r e n c e :De c i s i onThe or y Di fficul t y:Moder at e Keywords:maxi mi n,maxi max,Lapl ace ,mi ni maxr egre t ,expec t edval ue AACS B:Ana l yt i cs k i l l s


Test Bank for Operations Management Processes and Supply Chains 10th Edition Krajewski

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