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FPA > LESSON 4: SENSITIVITY ANALYSIS AND SIMPLEX METHOD > Flashcards

LESSON 4: SENSITIVITY ANALYSIS AND SIMPLEX METHOD Flashcards

1
Q

In a data-driven business, sensitivity analysis is used to which among the following?

A) Analyze the impact of changing external factors on business operations
B) Calculate historical sales data
C) Determine the optimal solution in a linear programming problem
D) Assess customer satisfaction

A

Analyze the impact of changing external factors on business operations

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2
Q

Which of the following is a primary goal of sensitivity analysis in the context of data-driven business practices?

A) Maximizing revenue
B) Minimizing costs
C) Identifying the range of possible solutions given changing input values
D) Analyzing market trends

A

Identifying the range of possible solutions given changing input values

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3
Q

In a linear programming problem, the objective function is typically which among the subsequent options?

A) A cost function to be minimized or a profit function to be maximized
B) A historical data record
C) A marketing plan
D) A random variable

A

A cost function to be minimized or a profit function to be maximized

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4
Q

Which of the following best describes the concept of Sensitivity Analysis in a data-driven business?

A) Evaluating how changes in input values affect the output of a model
B) Measuring employee satisfaction
C) Analyzing customer demographics
D) Reviewing financial statements

A

Evaluating how changes in input values affect the output of a model

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5
Q

When conducting Sensitivity Analysis, if the shadow price of a resource is zero, it means:

A) The resource is not important for the solution
B) The resource is in short supply
C) The resource is overutilized
D) The resource is underutilized

A

The resource is not important for the solution

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6
Q

How does Sensitivity Analysis relate to prescriptive analytics in data management?

A) It helps determine optimal business decisions under changing conditions
B) It generates historical sales reports
C) It identifies market trends
D) It analyzes customer behavior

A

It helps determine optimal business decisions under changing conditions

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7
Q

A company wants to maximize its profit given resource constraints. Which technique is most suitable for this problem?

A) Descriptive analytics
B) Predictive analytics
C) Sensitivity Analysis
D) Linear programming using the Simplex Method

A

Linear programming using the Simplex Method

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8
Q

In a data-driven business, if the objective is to minimize costs, the objective function in a linear programming problem would typically involve which of the following?

A) Maximizing revenue
B) Minimizing expenses
C) Analyzing market trends
D) Customer satisfaction scores

A

Minimizing expenses

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9
Q

Which of the following is a key concept in the Simplex Method for solving linear programming problems?

A) Feasible solution
B) Social media marketing
C) Employee training
D) Market research

A

Feasible solution

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10
Q

Sensitivity Analysis can help a business in making decisions when faced with changes in which of the succeeding choices?

A) Financial statements
B) Customer preferences
C) Input parameters or constraints
D) Employee morale

A

Financial statements

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11
Q

The Simplex Method iteratively moves from one basic feasible solution to another, always improving the:

A) Employee turnover rate
B) Profit margin
C) Objective function value
D) Market share

A

Objective function value

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12
Q

Sensitivity Analysis can help identify critical resources or constraints in a data-driven business by evaluating the:

A) Impact of resource limitations on the objective function
B) Social media engagement
C) Customer reviews
D) Competitor product offerings

A

Customer reviews

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13
Q

Sensitivity Analysis can assist in optimizing inventory levels by assessing the impact of changes in demand, lead times, and carrying costs on which of the following?

A) Market research
B) Profit margins
C) Total inventory cost
D) Employee productivity

A

Total inventory cost

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14
Q

The objective of Sensitivity Analysis is to determine which among the following?

A) The number of employees needed for a project
B) How to maximize profits
C) How sensitive the workforce is to changes in salary
D) How parameter changes affect the optimal solution

A

How sensitive the workforce is to changes in salary

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15
Q

In the Simplex Method, the pivot element is chosen to which among the subsequent choices?

A) Maximize employee satisfaction
B) Minimize objective function value
C) Move to an adjacent vertex of the feasible region
D) Collect customer feedback

A
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16
Q

In a linear programming problem, shadow prices represent which among the following?

A) The price of products in the market
B) The impact of changes in constraints on the objective function
C) Employee salaries
D) Marketing expenses

A
17
Q

Sensitivity Analysis is a valuable tool for supply chain optimization as it helps in which of the options?

A) Monitoring employee work hours
B) Identifying alternative suppliers
C) Analyzing social media trends
D) Assessing the impact of supply chain disruptions on costs and profits

A

Identifying alternative suppliers

18
Q

In a data-driven business, Sensitivity Analysis can be applied to optimize advertising spending by evaluating the impact of changes in:

A) Employee training programs
B) Customer service quality
C) Advertising budgets on sales and profits
D) Competitor product features

A

Advertising budgets on sales and profits

19
Q

The Simplex Method can be used in data-driven businesses to optimize resource allocation by which of the options?

A) Ignoring resource constraints
B) Minimizing resource utilization
C) Maximizing the use of available resources to achieve the objective
D) Disregarding employee preferences

A

Maximizing the use of available resources to achieve the objective

20
Q

Sensitivity Analysis can help data-driven businesses adapt to changing market conditions and make informed decisions by assessing the impact of changes in:

A) Historical data
B) Employee training programs
C) Input parameters and constraints on the objective function
D) Employee turnover rates

A

Input parameters and constraints on the objective function

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