Practical Management Science 5th Edition By Wayne L Winston S Christian Albright – Test Bank

Overview

1. Which of the following is typically not an application of simulation models?
a. Operations models
b. Financial models
c. Marketing models
d. Logistics models
ANSWER: d
POINTS: 1

2. Which of the following is the most likely characteristic of a distribution that is to be used to develop a simulation model for estimating the time until failure of a product in a simulation model?
a. Unbounded
b. Left skewed
c. Normal
d. Uniform
ANSWER: b
POINTS: 1

3. Which of the following functions is not an @RISK statistical function?
a. RISKMIN
b. RISKMAX
c. RISKPERCENTILE
d. RISKSIMTABLE
ANSWER: d
POINTS: 1

4. Which of the following @RISK functions can be used to find the probability of a particular value in an output distribution?
a. RISKMIN
b. RISKMAX
c. RISKPERCENTILE
d. RISKTARGET
ANSWER: d
POINTS: 1

5. Value at risk (VAR) is an indicator of:
a. how much to bid for a project
b. the expected amount of loss for a project
c. what is nearly the worst possible outcome for a project
d. the required amount of investment required for a project
ANSWER: c
POINTS: 1

6. The value at risk (VAR) is typically defined as the:
a. 5th percentile of NPV distribution
b. 10th percentile of NPV distribution
c. 90th percentile of NPV distribution
d. 95th percentile of NPV distribution
ANSWER: a
POINTS: 1

7. Suppose we compare the difference between the NPV of a financial model in which the means are entered for all input random variables and the NPV of a financial model in which the most likely values are entered for all input random variables. If we see a large difference between the NPV’s, this illustrates:
a. the value at risk (VAR)
b. the effect of randomness
c. the flaw of averages
d. the bias of the analyst
ANSWER: c
POINTS: 1

8. In cash flow models, we are typically interested in investigating:
a. the value at risk (VAR)
b. the net present value (NPV)
c. the amount of loans required to maintain a minimum cash balance
d. the interest on loans taken out by a firm
ANSWER: c
POINTS: 1

9. A key input variable in many marketing models of customer loyalty is the:
a. Mean profit per customer
b. Number of customers
c. Churn rate
d. Time horizon
ANSWER: c
POINTS: 1

10. The main issue in marketing and sales models is:
a. the amount invested in marketing
b. the timing of marketing
c. the profit from sales
d. the timing of sales
ANSWER: d
POINTS: 1