ACCESS Test Bank for Introduction to Management Science and Business
Analytics 7th Edition Hillier
CHAPTER 1
INTRODUCTION
Review Questions
1.1–1 The rapid development of the discipline began in the 1940’s and 1950’s.
1.1–2 The traditional name given to the discipline is operations research.
1.1–3 A management science study provides an analysis and recommendations, based on the
quantitative factors involved in the problem, as input to the managers.
1.1–4 Management science is based strongly on some scientific fields, including mathematics and
computer science. It also draws upon the social sciences, especially economics.
1.1–5 Many managerial problems revolve around such quantitative factors as production quantities,
revenues, costs, the amounts available of needed resources, etc.
1.2–1 Business analytics has drawn on various other quantitative decision sciences, including
management science, mathematics, statistics, computer science, information technology,
industrial engineering, etc.
1.2–2 The era of big data is where massive amounts of data (accompanied by massive amounts of
computational power) are now commonly available to many businesses to help guide
managerial decision making. A primary focus of business analytics is on how to make the most
effective use of all these data.
1.2–3 Descriptive analytics uses innovative techniques (including algorithms) to explore the data,
locate and extract the data that are relevant, and then identify the interesting patterns and
summary data.
1.2–4 Predictive analytics often involves applying statistical models to predict future events or trends.
1.2–5 Prescriptive analytics uses powerful techniques drawn mainly from management science to
prescribe what should be done in the future.
1.2–6 Data science tends to be more interdisciplinary, more based on scientific methods, more
applicable to various areas in addition to business, and more concerned with how to deal with
even massive amounts of data in various forms.
1.2–7 The goal of machine learning is to allow computers to learn automatically from historical
relationships and trends in the data in order to do such things as making data-driven predictions.
Machine learning is a popular method for applying predictive analytics by performing pattern
recognition.
1.2–8 Machine learning is just one important part of artificial intelligence. Because its focus is on
automatically learning from historical relationships and trends in the data, machine learning
provides an ideal platform for performing artificial intelligence. The difficult part then is taking
the next step to use this platform to truly simulate human thinking capability and behavior.
1–1
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
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,ACCESS Test Bank for Introduction to Management Science and Business ACCESS Test Bank for Introduction to Management Science and Business
Analytics 7th Edition Hillier Analytics 7th Edition Hillier
1.3–1 Business analytics provides a larger toolkit when dealing with descriptive analytics, data 1.2 The techniques of management science and business analytics used include simulation, mixed-
preparation, and predictive analytics. Management science techniques normally take the lead integer programming, genetic algorithms, linear programming, Dantzig-Wolfe decomposition,
when performing prescriptive analytics. parallel processing, artificial intelligence, machine learning, etc. Pages 22-23 describe the
financial benefits for both product architecture design and supply chain planning, and then
1.3–2 Analytics have been making important contributions in such areas as sports, political campaigns,
combine them as given in the application vignette. Page 23 describes organizational benefits
healthcare, combating crime, personal financial analysis, etc.
(much greater efficiency plus new insights and controls) and environmental benefits (reducing
1.3–3 Top management now understands very well the impact that business analytics and water usage and wastewater).
management science can have on the bottom line. This will continue to require many more
1.3 An answer for the selected application can be found by referring to the corresponding question
people who are very well trained in business analytics and management science
in the chapter indicated in Table 1.1 and then reading its answer in this Solutions Manual.
1.3–4 Operations research has been the usual name given to management science outside of business
1.4 Find the answers as described above for Problem 1.3.
schools.
1.5 a. True.
1.3–5 INFORMS (the Institute of Operations Research and the Management Sciences) is the largest
professional society of management science and business analytics professionals or students in b. False. Management science doesn’t make managerial decisions. Managers do. Management
the world. science aids managerial decision making.
1.4–1 Variable costs include all of the costs that are proportional with the number of units produced. c. False. Becomes true when you replace the word qualitative by quantitative.
1.4–2 Fixed costs include the costs that are incurred regardless of how many units are produced. These 1.6 a. True.
might include a prorated share of the salaries for upper management, capital equipment,
b. False. Business analytics focuses on transforming data into insight for making better business
property taxes, and more.
decisions.
1.4–3 There are often diminishing returns from advertising that are not captured by linear regression.
c. True.
1.4–4 If a polynomial equation is used to try to predict what sales will be for advertising budgets, it will
1.7 a. False. Management science became an established discipline in the middle of the 20th
eventually start sloping downward. While we intuitively would expect diminishing returns as
century whereas business analytics only began becoming well established after the
advertising is increased, we wouldn’t expect sales to actually decrease.
beginning of the 21st century.
1.4–5 Sales do not increase proportionally with the level of advertising, but rather increase
b. True.
proportionally with the square root of advertising.
c. False. This expansion already is well under way, especially with new programs in business
1.4–6 Solver will find the value of decision variable cells that will optimize the value of an objective
analytics.
cell.
1.8 a. Answers will vary. See answer to part d for some possible intuition for a hypothesis.
Problems
1.1 The three modules are the Incident Ticket Classification Module (which lists and classifies the
undesirable incidents for the various servers), the Server Classification Module (which links the
server unavailable incidents to the servers involved and then develops metrics for the individual
servers), and the Remediation Recommendation Module (which develops recommendations of
the appropriate modernization actions that should be taken for problematic servers).
1–2 1–3
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
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,ACCESS Test Bank for Introduction to Management Science and Business ACCESS Test Bank for Introduction to Management Science and Business
Analytics 7th Edition Hillier Analytics 7th Edition Hillier
b. At the higher variable cost of $315, the best level of advertising decreases to $88,726. 1.9 a.
b. a ≈ 2.434, b ≈ 145 provide the best fit.
c. At the lower variable cost of $275, the best level of advertising increases to $191,882.
d. It appears that the best level of advertising goes down as the unit variable cost increases.
With increased variable cost, the net profit per unit goes down. This means each additional
sale produces less profit, and you get less “bang for the buck” from advertising. As you
increase the advertising budget, this means you more quickly reach the point where the
diminishing returns from advertising make it not profitable to advertise more.
1–4 1–5
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
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, ACCESS Test Bank for Introduction to Management Science and Business ACCESS Test Bank for Introduction to Management Science and Business
Analytics 7th Edition Hillier Analytics 7th Edition Hillier
c. The best level of advertising is $78,350, leading to a total profit of $31,700. b. While the new data point appears to have lower sales than might be expected based on the
other nearby data points, it does not appear to alter the main takeaway from the original
historical data—it still appears that sales are largely increasing with advertising, but at a
decreasing rate. The square-root prediction formula still seems like it will be a good fit (as
verified in part c).
Case
1–1 a. If there is reason to believe that there are extenuating circumstances that might make Q1 an
outlier (e.g., unusual market conditions), then it might make sense to ignore the new data
value and re-use the model as is for Q2. Otherwise, the new data provides more information
about the relationship between sales and advertising for the VRX2000. It should be
incorporated into the regression analysis, along with the other historical data, and the
prediction formula updated to account for the new information.
1–6 1–7
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
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Analytics 7th Edition Hillier
CHAPTER 1
INTRODUCTION
Review Questions
1.1–1 The rapid development of the discipline began in the 1940’s and 1950’s.
1.1–2 The traditional name given to the discipline is operations research.
1.1–3 A management science study provides an analysis and recommendations, based on the
quantitative factors involved in the problem, as input to the managers.
1.1–4 Management science is based strongly on some scientific fields, including mathematics and
computer science. It also draws upon the social sciences, especially economics.
1.1–5 Many managerial problems revolve around such quantitative factors as production quantities,
revenues, costs, the amounts available of needed resources, etc.
1.2–1 Business analytics has drawn on various other quantitative decision sciences, including
management science, mathematics, statistics, computer science, information technology,
industrial engineering, etc.
1.2–2 The era of big data is where massive amounts of data (accompanied by massive amounts of
computational power) are now commonly available to many businesses to help guide
managerial decision making. A primary focus of business analytics is on how to make the most
effective use of all these data.
1.2–3 Descriptive analytics uses innovative techniques (including algorithms) to explore the data,
locate and extract the data that are relevant, and then identify the interesting patterns and
summary data.
1.2–4 Predictive analytics often involves applying statistical models to predict future events or trends.
1.2–5 Prescriptive analytics uses powerful techniques drawn mainly from management science to
prescribe what should be done in the future.
1.2–6 Data science tends to be more interdisciplinary, more based on scientific methods, more
applicable to various areas in addition to business, and more concerned with how to deal with
even massive amounts of data in various forms.
1.2–7 The goal of machine learning is to allow computers to learn automatically from historical
relationships and trends in the data in order to do such things as making data-driven predictions.
Machine learning is a popular method for applying predictive analytics by performing pattern
recognition.
1.2–8 Machine learning is just one important part of artificial intelligence. Because its focus is on
automatically learning from historical relationships and trends in the data, machine learning
provides an ideal platform for performing artificial intelligence. The difficult part then is taking
the next step to use this platform to truly simulate human thinking capability and behavior.
1–1
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
mynursytest.store
,ACCESS Test Bank for Introduction to Management Science and Business ACCESS Test Bank for Introduction to Management Science and Business
Analytics 7th Edition Hillier Analytics 7th Edition Hillier
1.3–1 Business analytics provides a larger toolkit when dealing with descriptive analytics, data 1.2 The techniques of management science and business analytics used include simulation, mixed-
preparation, and predictive analytics. Management science techniques normally take the lead integer programming, genetic algorithms, linear programming, Dantzig-Wolfe decomposition,
when performing prescriptive analytics. parallel processing, artificial intelligence, machine learning, etc. Pages 22-23 describe the
financial benefits for both product architecture design and supply chain planning, and then
1.3–2 Analytics have been making important contributions in such areas as sports, political campaigns,
combine them as given in the application vignette. Page 23 describes organizational benefits
healthcare, combating crime, personal financial analysis, etc.
(much greater efficiency plus new insights and controls) and environmental benefits (reducing
1.3–3 Top management now understands very well the impact that business analytics and water usage and wastewater).
management science can have on the bottom line. This will continue to require many more
1.3 An answer for the selected application can be found by referring to the corresponding question
people who are very well trained in business analytics and management science
in the chapter indicated in Table 1.1 and then reading its answer in this Solutions Manual.
1.3–4 Operations research has been the usual name given to management science outside of business
1.4 Find the answers as described above for Problem 1.3.
schools.
1.5 a. True.
1.3–5 INFORMS (the Institute of Operations Research and the Management Sciences) is the largest
professional society of management science and business analytics professionals or students in b. False. Management science doesn’t make managerial decisions. Managers do. Management
the world. science aids managerial decision making.
1.4–1 Variable costs include all of the costs that are proportional with the number of units produced. c. False. Becomes true when you replace the word qualitative by quantitative.
1.4–2 Fixed costs include the costs that are incurred regardless of how many units are produced. These 1.6 a. True.
might include a prorated share of the salaries for upper management, capital equipment,
b. False. Business analytics focuses on transforming data into insight for making better business
property taxes, and more.
decisions.
1.4–3 There are often diminishing returns from advertising that are not captured by linear regression.
c. True.
1.4–4 If a polynomial equation is used to try to predict what sales will be for advertising budgets, it will
1.7 a. False. Management science became an established discipline in the middle of the 20th
eventually start sloping downward. While we intuitively would expect diminishing returns as
century whereas business analytics only began becoming well established after the
advertising is increased, we wouldn’t expect sales to actually decrease.
beginning of the 21st century.
1.4–5 Sales do not increase proportionally with the level of advertising, but rather increase
b. True.
proportionally with the square root of advertising.
c. False. This expansion already is well under way, especially with new programs in business
1.4–6 Solver will find the value of decision variable cells that will optimize the value of an objective
analytics.
cell.
1.8 a. Answers will vary. See answer to part d for some possible intuition for a hypothesis.
Problems
1.1 The three modules are the Incident Ticket Classification Module (which lists and classifies the
undesirable incidents for the various servers), the Server Classification Module (which links the
server unavailable incidents to the servers involved and then develops metrics for the individual
servers), and the Remediation Recommendation Module (which develops recommendations of
the appropriate modernization actions that should be taken for problematic servers).
1–2 1–3
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
mynursytest.store mynursytest.store
,ACCESS Test Bank for Introduction to Management Science and Business ACCESS Test Bank for Introduction to Management Science and Business
Analytics 7th Edition Hillier Analytics 7th Edition Hillier
b. At the higher variable cost of $315, the best level of advertising decreases to $88,726. 1.9 a.
b. a ≈ 2.434, b ≈ 145 provide the best fit.
c. At the lower variable cost of $275, the best level of advertising increases to $191,882.
d. It appears that the best level of advertising goes down as the unit variable cost increases.
With increased variable cost, the net profit per unit goes down. This means each additional
sale produces less profit, and you get less “bang for the buck” from advertising. As you
increase the advertising budget, this means you more quickly reach the point where the
diminishing returns from advertising make it not profitable to advertise more.
1–4 1–5
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
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, ACCESS Test Bank for Introduction to Management Science and Business ACCESS Test Bank for Introduction to Management Science and Business
Analytics 7th Edition Hillier Analytics 7th Edition Hillier
c. The best level of advertising is $78,350, leading to a total profit of $31,700. b. While the new data point appears to have lower sales than might be expected based on the
other nearby data points, it does not appear to alter the main takeaway from the original
historical data—it still appears that sales are largely increasing with advertising, but at a
decreasing rate. The square-root prediction formula still seems like it will be a good fit (as
verified in part c).
Case
1–1 a. If there is reason to believe that there are extenuating circumstances that might make Q1 an
outlier (e.g., unusual market conditions), then it might make sense to ignore the new data
value and re-use the model as is for Q2. Otherwise, the new data provides more information
about the relationship between sales and advertising for the VRX2000. It should be
incorporated into the regression analysis, along with the other historical data, and the
prediction formula updated to account for the new information.
1–6 1–7
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
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