Q&A Hero

Q: A small store is trying to determine if its current checkout system is adequate. Currently, there is only one cashier, so it is a single-channel, single-phase system. The store has collected information on the interarrival time, and service time distributions. They are represented in the tables below. Use the following two-digit random numbers given below to simulate 10 customers through the checkout system. What is the average time in line, and average time in system? (Set first arrival time to the interarrival time generated by first random number. Interarrival time (minutes) Probability Service time (minutes) Probability 3 .25 1 .30 4 .25 2 .40 5 .30 3 .20 6 .20 4 .10 Random numbers for interarrival times: 07, 60, 77, 49, 76, 95, 51, 16, 14, 85 Random numbers of service times: 57, 17, 36, 72, 85, 31, 44, 30, 26, 09

Q: Historical records on a certain product indicate the following behavior for demand. The data represent the 288 days that the business was open during 2000. Convert these data into random number intervals. Demand in cases Number of occurrences 7 52 8 9 9 14 10 39 11 72 12 102

Q: Geneva Co. reports the following information for July: Sales $750,000 Variable costs 225,000 Fixed costs 100,000 Calculate the contribution margin for July. A. $525,000 B. $425,000 C. $650,000 D. $750,000

Q: A distribution of service times at a waiting line indicates that service takes 12 minutes 30 percent of the time and 14 minutes 70 percent of the time. Prepare the probability distribution, the cumulative probability distribution, and the random number intervals for this problem. The first six random numbers were 99, 29, 27, 75, 89, and 78. What is the average service time for this simulation run?

Q: Quaker Corporation sold 6,600 units of its product at a price of $42.40 per unit. Total variable cost per unit is $19.25, consisting of $10.15 in variable production cost and $9.10 in variable selling and administrative cost. Compute contribution margin for the company. A. $279,840 B. $119,130 C. $66,990 D. $152,790 E. $60,060

Q: A distribution of service times at a waiting line indicates that service takes 12 minutes 30 percent of the time and 14 minutes 70 percent of the time. Prepare the probability distribution, the cumulative probability distribution, and the random number intervals for this problem.

Q: Reliance Corporation sold 4,000 units of its product at a price of $15 per unit. Total variable cost per unit is $8.50, consisting of $7.75 in variable production cost and.75 in variable selling and administrative cost. Compute contribution margin for the company. A. $26,000 B. $34,000 C. $60,000 D. $31,000 E. $36,900

Q: A distribution of service times at a waiting line shows that service takes 6 minutes 40 percent of the time, 7 minutes 30 percent of the time, 8 minutes 20 percent of the time, and 9 minutes 10 percent of the time. Prepare the probability distribution, the cumulative probability distribution, and the random number intervals for this problem. The first five random numbers are 37, 69, 53, 80, and 60. What is the average service time of this simulation run?

Q: Brush Industries reports the following information for May: Sales $900,000 Fixed cost of goods sold 100,000 Variable cost of goods sold 250,000 Fixed selling and administrative costs 100,000 Variable selling and administrative costs 125,000 Calculate the gross margin for May under absorption costing? A. $650,000 B. $325,000 C. $525,000 D. $550,000

Q: Given the Cool Pools Company data, what is net income using variable costing? A. $1,649,480 B. $1,648,600 C. $1,627,150 D. $1,709,480 E. $1,708,600

Q: A warehouse manager needs to simulate the demand placed on a product that does not fit standard models. The concept being measured is "demand during lead time," where both lead time and daily demand are variable. The historical record for this product suggests the following probability distribution. Convert this distribution into random number intervals. Demand during lead time Probability 100 .02 120 .15 140 .25 160 .15 180 .13 200 .30

Q: Given the Cool Pools Company data, what is net income using absorption costing? A. $1,649,480 B. $1,648,600 C. $1,627,150 D. $1,709,480 E. $1,708,600

Q: A distribution of service times at a waiting line shows that service takes 6 minutes 40 percent of the time, 7 minutes 30 percent of the time, 8 minutes 20 percent of the time, and 9 minutes 10 percent of the time. Prepare the probability distribution, the cumulative probability distribution, and the random number intervals for this problem.

Q: A waiting-line problem that cannot be modeled by standard distributions has been simulated. The table below shows the result of a Monte Carlo simulation. (Assume that the simulation began at 8:00 a.m. and there is only one server. Customer Number Arrival Time Service Time Service Ends 1 8:06 2 8:08 2 8:07 10 8:18 3 8:12 10 8:28 4 8:24 11 8:39 5 8:30 5 8:44 a. What is the average waiting time in line? b. What is the average time in the system?

Q: Given the Scavenger Company data, what is net income using variable costing? A. $201,250 B. $181,250 C. $150,000 D. $177,600 E. $276,250

Q: Explain the difference between random numbers and random number intervals.

Q: Given the Scavenger Company data, what is net income using absorption costing? A. $201,250 B. $181,250 C. $150,000 D. $177,600 E. $276,250

Q: Explain what is meant by the concept of "time compression" in simulation modeling.

Q: Given the Galaxy Inc. data, what is net income using variable costing? A. $16,220,000 B. $17,400,000 C. $16,360,000 D. $11,275,000 E. $16,800,000

Q: Explain what is meant by "simulation is not limited to using the standard probability distributions."

Q: Given the Galaxy, Inc. data, what is net income using absorption costing? A. $11,275,000 B. $17,400,000 C. $16,360,000 D. $16,800,000 E. $16,220,000

Q: A waiting-line problem that cannot be modeled by standard distributions has been simulated. The table below shows the result of a Monte Carlo simulation. (Assume that the simulation began at 8:00 a.m. and there is only one server.) Why do you think this problem does not fit the standard distribution for waiting lines? Explain briefly how a Monte Carlo simulation might work where analytical models cannot. Customer Number Arrival Time Service Time Service Ends 1 8:05 2 8:07 2 8:06 10 8:17 3 8:10 15 8:32 4 8:20 12 8:44 5 8:30 4 8:48

Q: Vision Tester, Inc., a manufacturer of optical glass, began operations on February 1 of the current year. During this time, the company produced 900,000 units and sold 800,000 units at a sales price of $12 per unit. Cost information for this year is shown in the following table: Production costs Direct materials $0.80 per unit Direct labor $0.70 per unit Variable overhead $500,000 in total Fixed overhead $450,000 in total Non-production costs Variable selling and administrative $30,000 in total Fixed selling and administrative $490,000 in total Given this information, which of the following is true? A. Net income under variable costing will exceed net income under absorption costing by $50,000. B. Net income under absorption costing will exceed net income under variable costing by $50,000. C. Net income will be the same under both absorption and variable costing. D. Net income under variable costing will exceed net income under absorption costing by $60,000. E. Net income under absorption costing will exceed net income under variable costing by $60,000.

Q: Provide a small example illustrating how random numbers are used in Monte Carlo simulation.

Q: Chance, Inc. sold 3,000 units of its product at a price of $72 per unit. Total variable cost per unit is $51, consisting of $32 in variable production cost and $19 in variable selling and administrative cost. Compute the manufacturing margin for the company under variable costing. A. $96,000 B. $63,000 C. $120,000 D. $216,000 E. ($90,000)

Q: What are the advantages and disadvantages of simulation models?

Q: Explain how Monte Carlo simulation uses random numbers.

Q: Accurate Metal Company sold 32,000 units of its product at a price of $250 per unit. Total variable cost per unit is $155, consisting of $145 in variable production cost and $5 in variable selling and administrative cost. Compute the manufacturing margin for the company under variable costing. A. $8,000,000 B. $4,960,000 C. $4,800,000 D. $3,360,000 E. $3,200,000

Q: Identify, in order, the five steps required to implement the Monte Carlo simulation technique.

Q: A company reports the following information for its first year of operations: Units produced this year ? units Units sold this year 1,500 units Direct materials $9 per unit Direct labor $5 per unit Variable overhead $7 per unit Fixed overhead $24,000 in total If the company's cost per unit of finished goods using absorption costing is $27, how many units were produced? A. 4,000 units. B. 3,600 units. C. 1,846 units. D. 2,667 units. E. 2,000 units.

Q: What is the Monte Carlo method?

Q: Magenta Inc. reports the following information for the current year, which is its first year of operations: Units produced this year 750,000 units Units sold this year 740,000 units Direct materials $18.30 per unit Direct labor $14.20 per unit Variable overhead ? in total Fixed overhead $4,500,000 in total If the company's cost per unit of finished goods using absorption costing is $39.75, what is total variable overhead? A. $925,000 B. $877,500 C. $937,500 D. $865,800 E. $5,437,500

Q: Identify the seven steps involved in using simulation.

Q: State the three-fold idea behind simulation.

Q: Identify five applications of simulation.

Q: Gage Company reports the following information for its first year of operations: Units produced this year 7,000 units Units sold this year 6,500 units Direct materials $22 per unit Direct labor $30 per unit Variable overhead ? in total Fixed overhead $56,000 in total If the company's cost per unit of finished goods using variable costing is $63, what is total variable overhead? A. $21,000 B. $71,500 C. $77,000 D. $19,500 E. $16,590

Q: Define simulation.

Q: Milton Company reports the following information for the current year: Units produced this year 45,000 units Units sold this year 53,000 units Direct materials $5 per unit Direct labor $2 per unit Variable overhead $270,000 in total Fixed overhead ? in total If the company's cost per unit of finished goods using absorption costing is $18, what is total fixed overhead? A. $225,000 B. $180,000 C. $270,000 D. $315,000 E. $720,000

Q: Would you simulate a problem for which there is an exact mathematical model already?

Q: Clear Company reports the following information for its first year of operations: Units produced this year 50,000 units Units sold this year 49,000 units Direct materials $7 per unit Direct labor $3 per unit Variable overhead $210,000 in total Fixed overhead ? in total If the company's cost per unit of finished goods using absorption costing is $19.30, what is total fixed overhead? A. $350,000 B. $255,000 C. $150,000 D. $249,900 E. $147,000

Q: The numbers used to represent each possible value or outcome in a computer simulation are referred to as __________ .

Q: Given Advanced Company's data, and the knowledge that the product is sold for $50 per unit and operating expenses are $200,000, compute the net income under variable costing. A. $55,000 B. $67,500 C. $80,500 D. $122,500 E. $205,000

Q: The effects of OM policies over many months or years can be obtained by computer simulation in a short time. This phenomenon is referred to as __________ .

Q: A(n) __________ is a series of digits that have been selected by a totally random process.

Q: Given Advanced Company's data, compute cost of finished goods in inventory under variable costing. A. $285,000 B. $712,500 C. $427,500 D. $230,000 E. $345,000

Q: A(n) __________ is the accumulation of individual probabilities of a distribution.

Q: Given Advanced Company's data, compute cost per unit of finished goods under absorption costing. A. $20.00 B. $34.17 C. $25.32 D. $23.00 E. $28.50

Q: The __________ method is a simulation technique that uses random elements when chance exists in their behavior.

Q: __________ is the attempt to duplicate the features, appearance, and characteristics of a real system, usually by means of a computerized model.

Q: Sea Company reports the following information regarding its production costs: Units produced 42,000 units Direct labor $35 per unit Direct materials $28 per unit Variable overhead $17 per unit Fixed overhead $105,000 in total Compute the product cost per unit under absorption costing. A. $28.00 B. $82.50 C. $80.00 D. $63.00 E. $35.00

Q: Which of the following is a necessity for common EOQ methodology but not simulations A) constant lead time B) variable demand C) variable holding costs D) A and B E) A, B and C

Q: Which of the following restrictions applies to queuing models but not Monte Carlo simulations? A) Poisson distribution of arrivals B) constant or exponential service times C) average length of line D) A and B E) A, B, and C

Q: Sea Company reports the following information regarding its production cost. Units produced 42,000 units Direct labor $35 per unit Direct materials $28 per unit Variable overhead $17 per unit Fixed overhead $105,000 in total Compute the product cost per unit under variable costing. A. $28.00 B. $82.50 C. $80.00 D. $63.00 E. $35.00

Q: Hayes Inc. provided the following information for the year 2015: Beginning inventory 100 units Units produced 750 units Units sold 800 units Selling price $150/unit Direct materials $35/unit Direct labor $16/unit Variable manufacturing overhead $15/unit Fixed manufacturing overhead $24,000/yr Variable selling/administrative costs $8/unit Fixed selling/administrative costs $15,500/yr What is the unit product cost for the year using variable costing? A. $98 B. $66 C. $74 D. $96

Q: Monte Carlo simulations applied to queuing problems have what advantage? A) simpler B) Arrival distribution does not need to be a Poisson distribution. C) Unloading rates can vary randomly. D) B and C E) A, B, and C

Q: There are four possible outcomes for a Monte Carlo simulation variable (A, B, C, and D). The random numbers 02, 22, 53, and 74 correspond to the variables __________ respectively if each possible outcome has an equivalent chance of occurring. A) A A C C B) B B D D C) A B C D D) D C B A E) none of the above

Q: Urban Company reports the following information regarding its production cost: Units produced 20,000 units Direct labor $13 per unit Direct materials $18 per unit Variable overhead $220,000 per unit Fixed overhead $110,000 in total Compute production cost per unit under variable costing. A. $18.00 B. $36.50 C. $42.00 D. $13.00 E. $31.00

Q: The number of tires sold at a car garage varies randomly between 0 and 4 each hour. What set of random numbers (on the 1-100 scale would tire sales of 2 be assigned? A) 01 through 20 B) 21 through 40 C) 41 through 60 D) 61 through 80 E) 81 through 100

Q: What is the cumulative probability distribution of the following variable? Tires Sold Probability 0 .1 1 .2 2 .15 3 .3 4 .25 A) 1 B) .5 C) 10 D) .2 E) none of the above

Q: Shore Company reports the following information regarding its production cost. Units produced 28,000 units Direct labor $23 per unit Direct materials $24 per unit Variable overhead $280,000 in total Fixed overhead $94,920 in total Compute production cost per unit under absorption costing. A. $57.00 B. $60.39 C. $47.00 D. $23.00 E. $24.00

Q: Special order decisions should be made using variable costing because: A. Special order decisions usually focus on fixed costs B. Variable costing includes all overhead costs in the calculation of product costs. C. Only variable costs will increase as a result of the special order. D. All costs, including variable and fixed costs, must be covered by the special order pricing.

Q: A distribution of lead times in an inventory problem indicates that lead time was 1 day 20 percent of the time, 2 days 30 percent of the time, 3 days 30 percent of the time, and. 4 days 20 percent of the time. This distribution has been prepared for Monte Carlo analysis. The first four random numbers drawn are 06, 63, 57, and 02. The average lead time of this simulation is A) 1.75 days B) 2 days C) 3 days D) 3.5 days E) none of these

Q: A distribution of service times at a waiting line indicates that service takes 12 minutes 30 percent of the time and 14 minutes 70 percent of the time. This distribution has been prepared for Monte Carlo analysis. The first four random numbers drawn are 07, 60, 77, and 49. The average service time of this simulation is A) 12 minutes B) 13 minutes C) 13.5 minutes D) 14 minutes E) none of these

Q: During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $5 per unit, Direct labor, $3 per unit, Variable overhead, $4 per unit, and Fixed overhead, $250,000. The company produced 25,000 units, and sold 20,000 units, leaving 5,000 units in inventory at year-end. Income calculated under variable costing is determined to be $315,000. How much income is reported under absorption costing? A. $315,000 B. $265,000 C. $565,000 D. $365,000

Q: A distribution of service times at a waiting line indicates that service takes 12 minutes 30 percent of the time and 14 minutes 70 percent of the time. In preparing this distribution for Monte Carlo analysis, the service time 13 minutes would be represented by the random number range A) 00 through 29 B) 01 through 30 C) 30 through 99 D) 31 through 00 E) None of these; 13 minutes is not a possible outcome.

Q: A distribution of service times at a waiting line shows that service takes 6 minutes 30 percent of the time, 7 minutes 40 percent of the time, 8 minutes 20 percent of the time, and 9 minutes 10 percent of the time. This distribution has been prepared for Monte Carlo analysis. The first two random numbers drawn are 53 and 74. The simulated service times are __________ minutes, then __________ minutes. A) 6; 7 B) 7; 7 C) 7; 8 D) 8; 9 E) Cannot determine, because no service time probability is that large.

Q: A distribution of service times at a waiting line indicates that service takes 6 minutes 30 percent of the time, 7 minutes 40 percent of the time, 8 minutes 20 percent of the time, and 9 minutes 10 percent of the time. In preparing this distribution for Monte Carlo analysis, the service time 8 minutes would be represented by the random number range A) 20 through 40 B) 21 through 40 C) 70 through 90 D) 71 through 90 E) none of these

Q: Income __________ when there is zero beginning inventory and all inventory units produced are sold. A. Will be lower under variable costing than absorption costing B. Will be the same under both variable and absorption costing C. Will be higher under variable costing than absorption costing D. Will be higher than gross margin under variable costing

Q: Which of the following best describes costs assigned to the product under the variable costing method? Direct labor (DL) Direct materials (DM) Variable selling and administrative Variable manufacturing overhead Fixed selling and administrative Fixed manufacturing overhead A. DL, DM, variable selling and administrative costs, and variable manufacturing overhead. B. DL, DM, and variable manufacturing overhead. C. DL, DM, variable manufacturing overhead, and fixed manufacturing overhead. D. DL and DM. E. DL, DM, fixed selling and administrative, and fixed manufacturing overhead.

Q: From a portion of a probability distribution, you read that P(demand = 0) is 0.25, and P(demand = 1) is 0.30. The random number intervals for this distribution beginning with 01 are A) 01 through 25, and 26 through 30 B) 01 through 25, and 01 through 30 C) 01 through 25, and 26 through 55 D) 00 through 25, and 26 through 55 E) 00 through 25, and 26 through 30

Q: From a portion of a probability distribution, you read that P(demand = 0) is 0.05, P(demand = 1) is 0.10, and P(demand = 2) is 0.20. The two-digit random number intervals for this distribution beginning with 01 are A) 01 through 05, 01 through 10, and 01 through 20 B) 00 through 04, 05 through 14, and 15 through 34 C) 01 through 05, 06 through 15, and 16 through 35 D) 00 through 04, 00 through 09, and 00 through 19 E) 01 through 06, 07 through 16, and 17 through 36

Q: From a portion of a probability distribution, you read that P(demand = 1) is 0.05, P(demand = 2) is 0.15, and P(demand = 3) is .20. The cumulative probability for demand 3 would be A) 0.133 B) 0.200 C) 0.400 D) 0.600 E) cannot be determined from the information given

Q: Geneva Company manufactures dolls that are sold to various customers. The companyworks at full capacity for half the year to meet peak demand, and operates at 80% capacity for the other half of the year. The following information is provided: Units produced and sold 600,000 units Selling price $35/unit Variable manufacturing costs $20/unit Fixed manufacturing costs $1,200,000/yr. Variable selling and administrative costs $6/unit Fixed selling and administrative costs $950,000/yr Geneva receives a purchase order to make 5,000 dolls as a one-time event. The good news is that this order is during a period when Geneva does have excess capacity. What is the lowest selling price Geneva should accept for this purchase order? A. $35.00 B. $26.00 C. $29.50 D. $23.50

Q: From a portion of a probability distribution, you read that P(demand = 0) is 0.05 and P(demand = 1) is 0.10. The cumulative probability for demand 1 would be A) 0.05 B) 0.075 C) 0.10 D) 0.15 E) cannot be determined

Q: A company is currently operating at 75% capacity and producing 3,000 units. Current cost information relating to this production is shown in the table below: Per Unit Sales price $43 Direct material $7 Direct labor $6 Variable overhead $4 Fixed overhead $4 The company has been approached by a customer with a request for a 200-unit special. What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits? A. Any amount over $43 per unit. B. Any amount over $17 per unit. C. Any amount over $21 per unit. D. Any amount over $13 per unit. E. Any amount over $22 per unit.

Q: Which of the following is not a step in running a Monte Carlo simulation? A) setting up a probability distribution for important variables B) building a cumulative probability distribution for each variable C) establishing an interval of random numbers for each variable D) generating random numbers E) All of the above are steps in running a Monte Carlo simulation.

Q: A company is currently operating at 80% capacity producing 5,000 units. Current cost information relating to this production is shown in the table below: Per Unit Sales price $34 Direct material $2 Direct labor $3 Variable overhead $4 Fixed overhead $5 The company has been approached by a customer with a request for a 100-unit special order. What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits? A. Any amount over $34 per unit. B. Any amount over $20 per unit. C. Any amount over $14 per unit. D. Any amount over $9 per unit. E. Any amount over $5 per unit.

Q: Setting up a probability distribution, building a cumulative probability distribution, and generating random numbers are A) necessary when the underlying probability distribution is normal B) three of the five steps in Monte Carlo analysis C) elements of physical simulation but not mathematical simulation D) the three steps involved in simulating a queuing problem E) advantages of simulation

Q: "Time compression" and the ability to pose "what-if" questions are elements of A) setting up a probability distribution for important variables B) the disadvantages of simulation C) physical simulations but not mathematical simulations D) the advantages of simulation E) the broad threefold idea of simulation

Q: When evaluating a special order, management should: A. Only accept the order if the incremental revenue exceeds all product costs. B. Only accept the order if the incremental revenue exceeds fixed product costs. C. Only accept the order if the incremental revenue exceeds total variable product costs. D. Only accept the order if the incremental revenue exceeds full absorption product costs. E. Only accept the order if the incremental revenue exceeds regular sales revenue.