MGMT 501 - Exam 1 Glossary Terms and
Definitions UPDATED QUESTIONS AND
CORRECT ANSWERS
Analog Model - CORRECT ANSWER although physical in form, an analog model does not
have a physical appearance similar to the real object or situation it represents.
Breakeven Point - CORRECT ANSWER the volume at which total revenue equals total cost.
Constraints - CORRECT ANSWER restrictions or limitations imposed on a problem.
Controllable Inputs - CORRECT ANSWER the inputs that are controlled or determined by the
decision maker.
Decision - CORRECT ANSWER the alternative selected
Decision Making - CORRECT ANSWER the process of defining the problem, identifying the
alternatives, determining the criteria, evaluating the alternatives, and choosing an alternative.
Decision Variable - CORRECT ANSWER another term for controllable input.
Deterministic Model - CORRECT ANSWER a model in which all uncontrollable inputs are
known and cannot vary.
Feasible Solution - CORRECT ANSWER a decision alternative or solution that satisfies all
constraints
Fixed Cost - CORRECT ANSWER the portion of the total cost that does not depend on the
volume; this cost remains the same no matter how much is produced.
Iconic Model - CORRECT ANSWER a physical replica, or representation, of a real object.
, Infeasible Solution - CORRECT ANSWER a decision alternative or solution that does not
satisfy one or more constraints.
Marginal Cost - CORRECT ANSWER the rate of change of the total cost with respect to
volume.
Marginal Revenue - CORRECT ANSWER the rate of change of total revenue with respect to
volume
Mathematical Model - CORRECT ANSWER mathematical symbols and expressions used to
represent a real situation.
Model - CORRECT ANSWER a representation of a real object or situation
Multicriteria Decision Problem - CORRECT ANSWER a problem that involves more than one
criterion; the objective is to find the "best" solution, taking into account all the criteria.
Objective Function - CORRECT ANSWER a mathematical expression that describes the
problem's objective
Optimal Solution - CORRECT ANSWER the specific decision-variable value or values that
provide the "best" output for the model.
Problem Solving - CORRECT ANSWER the process of identifying a difference between the
actual and the desired state of affairs and then taking action to resolve the difference.
Single-Criterion Decision Problem - CORRECT ANSWER a problem in which the objective is
to find the "best" solution with respect to just one criterion.
Stochastic (Probabilistic) Model - CORRECT ANSWER a model in which at least one
uncontrollable input is uncertain and subject to variation; stochastic models are also referred to as
probabilistic models.
Definitions UPDATED QUESTIONS AND
CORRECT ANSWERS
Analog Model - CORRECT ANSWER although physical in form, an analog model does not
have a physical appearance similar to the real object or situation it represents.
Breakeven Point - CORRECT ANSWER the volume at which total revenue equals total cost.
Constraints - CORRECT ANSWER restrictions or limitations imposed on a problem.
Controllable Inputs - CORRECT ANSWER the inputs that are controlled or determined by the
decision maker.
Decision - CORRECT ANSWER the alternative selected
Decision Making - CORRECT ANSWER the process of defining the problem, identifying the
alternatives, determining the criteria, evaluating the alternatives, and choosing an alternative.
Decision Variable - CORRECT ANSWER another term for controllable input.
Deterministic Model - CORRECT ANSWER a model in which all uncontrollable inputs are
known and cannot vary.
Feasible Solution - CORRECT ANSWER a decision alternative or solution that satisfies all
constraints
Fixed Cost - CORRECT ANSWER the portion of the total cost that does not depend on the
volume; this cost remains the same no matter how much is produced.
Iconic Model - CORRECT ANSWER a physical replica, or representation, of a real object.
, Infeasible Solution - CORRECT ANSWER a decision alternative or solution that does not
satisfy one or more constraints.
Marginal Cost - CORRECT ANSWER the rate of change of the total cost with respect to
volume.
Marginal Revenue - CORRECT ANSWER the rate of change of total revenue with respect to
volume
Mathematical Model - CORRECT ANSWER mathematical symbols and expressions used to
represent a real situation.
Model - CORRECT ANSWER a representation of a real object or situation
Multicriteria Decision Problem - CORRECT ANSWER a problem that involves more than one
criterion; the objective is to find the "best" solution, taking into account all the criteria.
Objective Function - CORRECT ANSWER a mathematical expression that describes the
problem's objective
Optimal Solution - CORRECT ANSWER the specific decision-variable value or values that
provide the "best" output for the model.
Problem Solving - CORRECT ANSWER the process of identifying a difference between the
actual and the desired state of affairs and then taking action to resolve the difference.
Single-Criterion Decision Problem - CORRECT ANSWER a problem in which the objective is
to find the "best" solution with respect to just one criterion.
Stochastic (Probabilistic) Model - CORRECT ANSWER a model in which at least one
uncontrollable input is uncertain and subject to variation; stochastic models are also referred to as
probabilistic models.
