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Business Analytics, 2nd Edition Test Bank

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    Business Analytics, 2e 365 Business Analytics (Evans) Supplementary Chapter A Nonlinear and Non-Smooth Optimization Use the table below to answer the following question(s). Bolton Computer's Laptop Pricing Decision Inputs Price Model Sales -3.85 × price + 1150.9 Outputs Total revenue sales × price 1) Bolton Computers are planning to release a new line of low-end laptops. Using Excel's Solver , develop a nonlinear model to calculate the optimal price for the laptops, given that sales = -3.85 × price + 1150.9. A) 342.40 B) 380.90 C) 719.70 D) 149.47 Answer: D Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations.

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    366 Supplementary Chapter A: Nonlinear and Non-Smooth Optimization 2) According to the nonlinear model, which of the following is the expected sales figure based on the computed price? A) 149.47 B) 719.7 C) 575.45 D) 500 Answer: C Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 3) According to the nonlinear model, which of the following is the total revenue expected from the sales? A) 22,340.91 B) 86,011.09 C) 107,571.78 D) 74,733.77 Answer: B Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations.

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    Business Analytics, 2e 367 Use the table below to create a nonlinear model based on the table to answer the following question(s). The Atlas Movies Theater is planning to reprice their ticket rates to maximize revenues. They have three classes of tickets: Classic, Silver, and Gold. The table below provides information on the average ticket sales, revenue and price elasticity on demand. They have a total seating capacity of 300. The table also provides the price range within which they plan to reduce their ticket rates. Atlas Movie Theater Ticketing Data Ticket Class Current Rate Average Daily Sold Elasticity Total Seating Capacity Price Range Classic $8.45 150 -1.5 300 $6.50 $7.50 Silver $13.25 80 -2 $11.50 $12.50 Gold $17.50 30 -1 $15.50 $16.50 4) According to the nonlinear model, what is the new price for Classic tickets? A) $7.50 B) $12.45 C) $6.50 D) $8.20 Answer: A Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 5) According to the nonlinear model, what is the new price for Silver tickets? A) $7.40 B) $12.17 C) $11.50 D) $12.50 Answer: B Diff: 1 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications.

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    368 Supplementary Chapter A: Nonlinear and Non-Smooth Optimization LO2: Use a modern software tool to perform statistical calculations. 6) According to the nonlinear model, what is the new price for Gold tickets? A) $16.50 B) $15.50 C) $16 D) $16.11 Answer: A Diff: 1 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 7) According to the nonlinear model, which of the following is the projected sales figure for Classic tickets at the new price? A) 32 B) 90 C) 175 D) 202 Answer: C Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 8) According to the nonlinear model, which of the following is the projected sales figure for Silver tickets at the new price? A) 93 B) 178 C) 202 D) 101 Answer: A Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 9) According to the nonlinear model, which of the following is the projected sales figure for Gold tickets at the new price? A) 32 B) 90 C) 33

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    Business Analytics, 2e 369 D) 178 Answer: A Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 10) According to the nonlinear model, which of the following is the projected revenue figure for Classic tickets based on its new price? A) $1,314.72 B) $1,116.03 C) $521.68 D) $1,312.52 Answer: A Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 11) According to the nonlinear model, which of the following is the projected revenue figure for Silver tickets based on its new price? A) $1,163.02 B) $1,132.08 C) $1,224.63 D) $1,316.92 Answer: B Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations.

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    370 Supplementary Chapter A: Nonlinear and Non-Smooth Optimization 12) According to the nonlinear model, which of the following is the projected revenue figure for Gold tickets based on its new price? A) $432.93 B) $1,316.92 C) $1,116.03 D) $523.29 Answer: D Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 13) According to the nonlinear model, which of the following is the total projected revenue for the new sales figures? A) $1,637.72 B) $2,970.09 C) $1,316.92 D) $2,865.89 Answer: B Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 14) Which of the following is true of the nonlinear model created for the Atlas movie ticket repricing scenario? A) The projected revenue for the Gold class is infeasible within the price range provided. B) The projected value for most tickets sold is for the Silver class. C) The total projected tickets sold exceed the total seating capacity. D) The projected revenue is lowest for the Gold tickets. Answer: D Diff: 3 Blooms: Understand AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations.

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    Business Analytics, 2e 371 15) Which of the following is the rectilinear distance between the points A (13,15) and B (10,12)? A) 4 B) 25 C) 6 D) 10 Answer: C Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. Use the table below to answer the following question(s). Shirley Templeton is a real estate agent for Paralol Realty. Shirley is given the responsibility to manage potential customers for 5 of the Realty's bungalows. These 5 bungalows are situated in close proximity. In order to make traveling easier, Shirley decides to move to a location closer to the 5 bungalows. The table below gives the location (X and Y coordinates) of the 5 bungalows along with the number of trips she would have to make to each bungalow. Create a nonlinear model based on the data given in the table below noting that the objective is to reduce the weighted distance between Shirley's accommodation and the 5 bungalows. Bungalow Location Data Location X -coordinate Y -coordinate Trips/Month Bungalow 1 0 0 6 Bungalow 2 25 100 30 Bungalow 3 20 75 15 Bungalow 4 90 80 28 Bungalow 5 60 100 10 16) According to the model, what is the X -coordinate for the location of Shirley's new accommodation? A) 54.62 B) 36.53 C) 25 D) 23.12 Answer: B Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations.

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    372 Supplementary Chapter A: Nonlinear and Non-Smooth Optimization 17) According to the model, what is the Y -coordinate for the location of Shirley's new accommodation? A) 91.16 B) 25.08 C) 98.21 D) 54.62 Answer: A Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 18) According to the model, what is the distance between Shirley's new accommodation and Bungalow 1? A) 36.53 B) 14.53 C) 98.21 D) 23.12 Answer: C Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 19) According to the model, what is the distance between Shirley's new accommodation and Bungalow 2? A) 91.16 B) 23.12 C) 98.21 D) 14.53 Answer: D Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations.

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    Business Analytics, 2e 373 20) According to the model, what is the distance between Shirley's new accommodation and Bungalow 3? A) 54.62 B) 25.08 C) 36.53 D) 23.12 Answer: D Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 21) According to the model, what is the distance between Shirley's new accommodation and Bungalow 4? A) 14.53 B) 250.78 C) 54.62 D) 98.21 Answer: C Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 22) According to the model, what is the distance between Shirley's new accommodation and Bungalow 5? A) 54.62 B) 25.08 C) 14.53 D) 91.16 Answer: B Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations.

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    374 Supplementary Chapter A: Nonlinear and Non-Smooth Optimization 23) According to the model, what is the weighted distance between Shirley's new accommodation and Bungalow 1? A) 589.25 B) 435.89 C) 346.77 D) 3152.08 Answer: A Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 24) According to the model, what is the weighted distance between Shirley's new accommodation and Bungalow 2? A) 435.89 B) 250.78 C) 1529.39 D) 589.25 Answer: A Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 25) According to the model, what is the weighted distance between Shirley's new accommodation and Bungalow 3? A) 3152.08 B) 1529.39 C) 346.77 D) 250.78 Answer: C Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations.

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    Business Analytics, 2e 375 26) According to the model, what is the weighted distance between Shirley's new accommodation and Bungalow 4? A) 589.25 B) 346.77 C) 1529.39 D) 3152.08 Answer: C Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 27) According to the model, what is the weighted distance between Shirley's new accommodation and Bungalow 5? A) 435.89 B) 1529.39 C) 589.25 D) 250.78 Answer: D Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 28) According to the model, what is the total weighted distance that Shirley would travel between the bungalows? A) 4151.29 B) 1529.39 C) 3152.08 D) 4305.30 Answer: C Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations.

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    376 Supplementary Chapter A: Nonlinear and Non-Smooth Optimization 29) According to the model, which of the following bungalows is Shirley's new accommodation closest to? A) Bungalow 1 B) Bungalow 5 C) Bungalow 2 D) Bungalow 4 Answer: C Diff: 2 Blooms: Understand AACSB: Analytic Skills Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 30) Given that Q = order quantity, D = annual demand, C = unit cost of the item, C 0 = cost per order placed, i = inventory carrying charge per unit, which of the following represents the holding cost per unit? A) D/Q B) iC C) (D/Q)C 0 D) iCQ/2 Answer: B Diff: 2 Blooms: Remember Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. 31) In an Economic Order-Quantity (EOQ) model, ________ is the estimate on how long it takes an order to be received after it is placed. A) lead time B) safety stock C) time limit D) cycle time Answer: A Diff: 2 Blooms: Remember Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications.

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    Business Analytics, 2e 377 32) Which of the following is the ideal next step if you get the message " Solver has converged to the current solution./All constraints are satisfied," when using Solver for nonlinear optimization models? A) Accept the values, but run Solver again from the current solution. B) Do not accept the Solver values and re-run Solver with the starting values. C) Accept the values and run simulations with different values. D) Accept the values, and then tweak the values, and re-run Solver on tweaked values. Answer: A Diff: 2 Blooms: Understand Topic: Modeling and Solving Nonlinear Optimization Problems LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations.

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    378 Supplementary Chapter A: Nonlinear and Non-Smooth Optimization Use the table below to answer the following question(s). Jonathan Reese is considering three stocks in which to invest with a fixed budget. The table below provides information on Jonathan's expected returns for each stock. The table also provides information, collected from market researchers, on the variance-covariance matrix of the individual stocks. He expects a total return of at least 10%. Reese's Stock Investment Plan Data Expected Variance-Covariance Matrix Return Stock 1 Stock 2 Stock 3 Stock 1 10% Stock 1 0.021 0.018 -0.003 Stock 2 11% Stock 2 0.018 0.070 0.006 Stock 3 9% Stock 3 -0.003 0.006 0.003 Target Return 10% Develop a quadratic optimization model to find the optimal allocation of the budget to each stock, and variance calculations for squared terms and cross-products based on the variance- covariance matrix. 33) According to the model, what percentage of the budget should be allocated to Stock 1? A) 10% B) 25% C) 50% D) 40% Answer: C Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Quadratic Optimization LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations.

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    Business Analytics, 2e 379 34) According to the model, what percentage of the budget should be allocated to Stock 2? A) 90% B) 25% C) 50% D) 75% Answer: B Diff: 1 Blooms: Apply AACSB: Analytic Skills Topic: Quadratic Optimization LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 35) According to the model, what percentage of the budget should be allocated to Stock 3? A) 40% B) 20% C) 25% D) 75% Answer: C Diff: 1 Blooms: Apply AACSB: Analytic Skills Topic: Quadratic Optimization LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations. 36) According to the model, what is the squared term value for Stock 1 variance? A) 0.00065 B) 0.00535 C) 0.01132 D) 0.00283 Answer: B Diff: 2 Blooms: Apply AACSB: Analytic Skills Topic: Quadratic Optimization LO1: Develop and solve nonlinear optimization models for different applications. LO2: Use a modern software tool to perform statistical calculations.

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