Question : Objective 11.1 1) A decision model involves: A) only quantitative analyses B) both : 1216905

 

 

 

Objective 11.1

 

1) A decision model involves:

A) only quantitative analyses

B) both quantitative and qualitative analyses

C) only qualitative analyses

D) a manager’s instinct

 

2) Feedback regarding previous actions may affect:

A) future predictions

B) implementation of the decision

C) the decision model

D) All of these answers are correct.

 

3) Place the following steps from the five-step decision process in order:

A = Make predictions about future costs

B = Evaluate performance to provide feedback

C = Implement the decision

D = Choose an alternative

A) A D B C

B) C D A B

C) A D C B

D) D C B A

4) The formal process of choosing between alternatives is known as a(n):

A) relevant model

B) decision model

C) alternative model

D) prediction model

 

5) Ruttles Circuit Company manufactures circuit boards for other firms. Management is attempting to search for ways to reduce manufacturing labor costs and has received a proposal from a consulting company to rearrange the production floor next year. Using the information below regarding current operations and the new proposal, which of the following decisions should management accept?

 

CurrentlyProposed

Required machine operators43

Materials-handling workers1.501.50

Employee average pay$10 per hour$12 per hour

Hours worked per employee2,1002,000

 

A) Do not change the production floor.

B) Rearrange the production floor.

C) Either, because it makes no difference to the employees.

D) It doesn’t matter because the costs incurred will remain the same.

Proposal: 3 workers × 2,000 hours × $12.00 = $72,000

Answer the following questions using the information below:

 

Schwimmer Lighting manufactures small flashlights and is considering raising the price by 50 cents a unit for the coming year. With a 50-cent price increase, demand is expected to fall by 6,000 units.

 

CurrentlyProjected

Demand40,000 units34,000 units

Selling price$4.50$5.00

Incremental cost per unit$3.00$3.00

 

6) If the price increase is implemented, operating profit is projected to:

A) increase by $8,000

B) decrease by $8,000

C) increase by $12,000

D) decrease by $9,000

 

7) Would you recommend the 50-cent price increase?

A) No, because demand decreased.

B) No, because the selling price increases.

C) Yes, because contribution margin per unit increases.

D) Yes, because operating profits increase.

 

8) When using the five-step decision process, which one of the following steps should be done last?

A) Obtain information

B) Choose an alternative

C) Evaluation and feedback

D) Implementing the decision

9) When using the five-step decision process, which one of the following steps should be done first?

A) Obtain information

B) Choose an alternative

C) Evaluation and feedback

D) Implementing the decision

 

10) A decision model is a formal method for making a choice, frequently involving both quantitative and qualitative analyses.