Ch01
Student: ___________________________________________________________________________
1. Business Decision Modeling refers to the use of very specific algorithms separate from those used in
Operations Research or Quantitative Analysis.
True False
2. Business Decision Modeling, Management Science, Quantitative Analysis, Operations Research, and
Operations Management are often interchangeable names defining the same discipline.
True False
3. Business Decision Modeling is only used in the banking, manufacturing, entertaining, airline and travel,
marketing, and information technology industries.
True False
4. Business Decision Modeling is actually a process for solving problems.
True False
5. Problem identification is considered a non-critical step in the Business Decision Modeling process since
subsequent steps can be tailored to correct any issues with it.
True False
6. Numeric or Concrete Models are normally used during the early stages of the Business Decision
Modeling process and then combined to create the Abstract or High Level Models.
True False
7. The Problem Definition step of the Business Decision Modeling defines the variables and assumptions
regarding the problem we identify.
True False
8. The Review and Iteration step of the Business Decision Model provides a "reality check" for the previous
steps.
True False
9. At the break-even point the amount of profit recognized will be zero.
True False
10. If the number of units produced and sold is 100, the selling price is $20, fixed costs are $740, and variable
costs are $1200 the break-even point is 105 units.
True False
11. Business Decision Modeling can be described as
A. a scientific approach to solving management problems.
B. the foundation on which all management decisions are made.
C. qualitative in nature.
D. Problem Initiation, Problem Definition, Problem Modeling, Model Initiation, Review and Iteration, and
Final Model Results.
12. Which of the following industries would not use Business Decision Modeling?
A. Entertainment.
B. Marketing.
C. Information Technology.
D. All of these industries would use Business Decision Modeling.
,13. Which of the following are the steps to the Business Decision Modeling Process?
A.Problem Identification, Problem Definition, Problem Modeling, Initial Model Results, Review and
Iteration, and Implementation.
B.Problem Initiation, Problem Definition, Problem Modeling, Initial Model Results, Review and
Iteration, and Final Model Results.
C.Problem Identification, Problem Definition, Problem Modeling, Model Initiation, Review and Iteration,
and Final Model Results.
D. Problem Initiation, Problem Definition, Problem Modeling, Model Initiation, Review and Iteration,
and Implementation.
14. Which of the following best describes the Problem Identification step of the Business Decision Modeling
process?
A. Identifying the variables and assumptions.
B. Identifying the model as abstract or concrete.
C. Identify the issue to be modeled.
D. The Problem Identification step isn't one of the steps in the Business Decision Modeling process.
15. Which of the following best describes the Problem Definition step of the Business Decision Modeling
process?
A. Defining the variables and assumptions.
B. Defining the model as abstract or concrete.
C. Defining the issue to be modeled.
D. The Problem Definition step isn't one of the steps in the Business Decision Modeling process.
16. Which of the following best describes the Problem Modeling step of the Business Decision Modeling
process?
A. Uses concrete models primarily during the early stages of the process.
B. Uses abstract models primarily during the early stages of the process.
C. Defines the problem to be modeled.
D. The Problem Modeling step isn't one of the steps in the Business Decision Modeling process.
17. The marginal revenue associated with the following model is represented by:
Model: Total Profit = Total Revenue – Total Cost
A. Contained within the Total Profit Term
B. Contained within the Total Revenue Term
C. Contained within the Total Cost Term
D. Cannot be determined
18. The marginal revenue associated with the following model is represented by:
Model: Y = Px – FC + Vx; where Y = Total Profit, FC = Fixed Cost, V = Variable Cost, and x = units
produced
A. x
B. Y
C. Contained within the Total Cost Term
D. V
19. The marginal revenue associated with the following model is represented by:
Model: Y = Px – FC + Vx; where Y = Total Profit, FC = Fixed Cost, V = Variable Cost, and x = units
produced
A. x
B. Y
C. FC
D. None of these
20. The variables in break-even analysis are:
A. volume, cost, and profit
B. total cost, fixed cost, variable cost
C. Y, x, and price
D. total variable revenue and total sales
,21. Problem solving can be described as:
A. a science
B. an art
C. an art and science
D. deterministic in nature
22. The objective of break-even analysis is:
A. determine the number of units to produce that will equate total profit with total cost
B. determine the number of units to produce that will equate total revenue with total cost
C. determine the number of units to produce that will equate variable cost with fixed cost
D. determine the number of units to produce to maximize profit
23. Business Decision Modeling reports are comprised of:
A. analysis
B. conclusions
C. recommendations
D. all of these
24. Business Decision Modeling reports are comprised of:
A. initial findings
B. research plan
C. analysis plan
D. none of these
25. The author of an Effective Business Decision Modeling report would most likely be concerned with:
A. ensuring the report is less than 5 pages in length
B. packaging
C. maximum use of graphics
D. all of these
26. The author of an effective Business Decision Modeling report would most concerned with:
A. content and length
B. length and packaging
C. content and packaging
D. none of these
27. The most critical portion of a Business Decision Modeling is:
A. Executive Summary
B. Problem Statement
C. Analysis
D. Conclusions and Recommendations
28. Identify six business areas and examples of their associated Business Decision Modeling
applications.
, 29. Describe the Business Model Process
30. Describe the Numeric or Concrete Models.
31. Describe Abstract or High Level Models.
32. Why is the Executive Summary portion of a Business Decision Modeling final report considered to be the
most critical?
33. A company has fixed costs of $200, variable costs of $10 per unit, and revenues of $20 per unit.
a. What is the break-even point?
b. What is the profit if demand is 30?
34. The break-even point for a company is 20. Their fixed costs are $200 and their revenues are $10 per unit.
a. What is their variable cost?
b. What is the profit if demand is 30?
Student: ___________________________________________________________________________
1. Business Decision Modeling refers to the use of very specific algorithms separate from those used in
Operations Research or Quantitative Analysis.
True False
2. Business Decision Modeling, Management Science, Quantitative Analysis, Operations Research, and
Operations Management are often interchangeable names defining the same discipline.
True False
3. Business Decision Modeling is only used in the banking, manufacturing, entertaining, airline and travel,
marketing, and information technology industries.
True False
4. Business Decision Modeling is actually a process for solving problems.
True False
5. Problem identification is considered a non-critical step in the Business Decision Modeling process since
subsequent steps can be tailored to correct any issues with it.
True False
6. Numeric or Concrete Models are normally used during the early stages of the Business Decision
Modeling process and then combined to create the Abstract or High Level Models.
True False
7. The Problem Definition step of the Business Decision Modeling defines the variables and assumptions
regarding the problem we identify.
True False
8. The Review and Iteration step of the Business Decision Model provides a "reality check" for the previous
steps.
True False
9. At the break-even point the amount of profit recognized will be zero.
True False
10. If the number of units produced and sold is 100, the selling price is $20, fixed costs are $740, and variable
costs are $1200 the break-even point is 105 units.
True False
11. Business Decision Modeling can be described as
A. a scientific approach to solving management problems.
B. the foundation on which all management decisions are made.
C. qualitative in nature.
D. Problem Initiation, Problem Definition, Problem Modeling, Model Initiation, Review and Iteration, and
Final Model Results.
12. Which of the following industries would not use Business Decision Modeling?
A. Entertainment.
B. Marketing.
C. Information Technology.
D. All of these industries would use Business Decision Modeling.
,13. Which of the following are the steps to the Business Decision Modeling Process?
A.Problem Identification, Problem Definition, Problem Modeling, Initial Model Results, Review and
Iteration, and Implementation.
B.Problem Initiation, Problem Definition, Problem Modeling, Initial Model Results, Review and
Iteration, and Final Model Results.
C.Problem Identification, Problem Definition, Problem Modeling, Model Initiation, Review and Iteration,
and Final Model Results.
D. Problem Initiation, Problem Definition, Problem Modeling, Model Initiation, Review and Iteration,
and Implementation.
14. Which of the following best describes the Problem Identification step of the Business Decision Modeling
process?
A. Identifying the variables and assumptions.
B. Identifying the model as abstract or concrete.
C. Identify the issue to be modeled.
D. The Problem Identification step isn't one of the steps in the Business Decision Modeling process.
15. Which of the following best describes the Problem Definition step of the Business Decision Modeling
process?
A. Defining the variables and assumptions.
B. Defining the model as abstract or concrete.
C. Defining the issue to be modeled.
D. The Problem Definition step isn't one of the steps in the Business Decision Modeling process.
16. Which of the following best describes the Problem Modeling step of the Business Decision Modeling
process?
A. Uses concrete models primarily during the early stages of the process.
B. Uses abstract models primarily during the early stages of the process.
C. Defines the problem to be modeled.
D. The Problem Modeling step isn't one of the steps in the Business Decision Modeling process.
17. The marginal revenue associated with the following model is represented by:
Model: Total Profit = Total Revenue – Total Cost
A. Contained within the Total Profit Term
B. Contained within the Total Revenue Term
C. Contained within the Total Cost Term
D. Cannot be determined
18. The marginal revenue associated with the following model is represented by:
Model: Y = Px – FC + Vx; where Y = Total Profit, FC = Fixed Cost, V = Variable Cost, and x = units
produced
A. x
B. Y
C. Contained within the Total Cost Term
D. V
19. The marginal revenue associated with the following model is represented by:
Model: Y = Px – FC + Vx; where Y = Total Profit, FC = Fixed Cost, V = Variable Cost, and x = units
produced
A. x
B. Y
C. FC
D. None of these
20. The variables in break-even analysis are:
A. volume, cost, and profit
B. total cost, fixed cost, variable cost
C. Y, x, and price
D. total variable revenue and total sales
,21. Problem solving can be described as:
A. a science
B. an art
C. an art and science
D. deterministic in nature
22. The objective of break-even analysis is:
A. determine the number of units to produce that will equate total profit with total cost
B. determine the number of units to produce that will equate total revenue with total cost
C. determine the number of units to produce that will equate variable cost with fixed cost
D. determine the number of units to produce to maximize profit
23. Business Decision Modeling reports are comprised of:
A. analysis
B. conclusions
C. recommendations
D. all of these
24. Business Decision Modeling reports are comprised of:
A. initial findings
B. research plan
C. analysis plan
D. none of these
25. The author of an Effective Business Decision Modeling report would most likely be concerned with:
A. ensuring the report is less than 5 pages in length
B. packaging
C. maximum use of graphics
D. all of these
26. The author of an effective Business Decision Modeling report would most concerned with:
A. content and length
B. length and packaging
C. content and packaging
D. none of these
27. The most critical portion of a Business Decision Modeling is:
A. Executive Summary
B. Problem Statement
C. Analysis
D. Conclusions and Recommendations
28. Identify six business areas and examples of their associated Business Decision Modeling
applications.
, 29. Describe the Business Model Process
30. Describe the Numeric or Concrete Models.
31. Describe Abstract or High Level Models.
32. Why is the Executive Summary portion of a Business Decision Modeling final report considered to be the
most critical?
33. A company has fixed costs of $200, variable costs of $10 per unit, and revenues of $20 per unit.
a. What is the break-even point?
b. What is the profit if demand is 30?
34. The break-even point for a company is 20. Their fixed costs are $200 and their revenues are $10 per unit.
a. What is their variable cost?
b. What is the profit if demand is 30?
