Qso520 Exam

QSO 520: Management Science Through Spreadsheets

Final Exam

Name:

Max Score: 300 points

Directions: All work must be submitted to Blackboard. The dropbox will close at 11:59 p.m. EST on the last day of Module Ten for the final exam. You must submit all work as a Word document as well as an Excel spreadsheet showing how you arrived at the answer for each question.

Question 1 (25 points)

Answer the questions below and provide justification to obtain full credit for your answers where necessary.

a. What impact does a change in the right-hand side value of a non-binding constraint usually have on the objective function value of a problem?

If the change increases the allowed level above the current slack value of the constraint there is no effect on the optimality of the resultant solution. If the change decreases the allowed level, as long as the value stays above the slack there is no change in optimality. If the change decreases below the slack then a new optimal result is needed.

b. What is the shadow price of a constraint when the constraint has 40 unused hours?

The shadow price would be zero (0) as this would be a non-binding constraint. If it were binding then the shadow price would be non-zero. This means as one consumes the unused hours there is no change in the optimal solution (corner point is not affected).

c. What does it imply when a constraint (e.g., labor hours) has a surplus of 10 hours?

The surplus is the same as “slack” which means as long as the constraint does not exceed the surplus/slack there is no change in the optimal solution.

d. Name any two techniques that can be classified as an example of decision making under certainty (or also known deterministic modeling). Also provide a practical example of the same.

The first, and most common, is Linear Programming. A common use is production planning to meet a specific production plan and determine the resulting profit to optimize...