CPAR :MS 9110_QUANTITATIVE TECHNIQUES BATCH MAY 2022

QUIZZER (DO-IT-YOURSELF DRILL)

THEORIES
1. The calculation of reasonable probabilities about the future, based on the analysis of all the latest
relevant information by tested and logically sound statistical and economic techniques, and applied in
terms of an executive’s personal judgement and knowledge of his business is
A. Budgeting C. Planning and control
B. Business forecasting D. Project feasibility studies
2. Which formula describes the learning curve?
A. y = axb C. y = ax-b
B. y = abx D. x = ayb
3. Various tools are employed to control large scale projects. They include all of the following except:
A. CPM. C. PERT.
B. Gantt charts. D. Statistical process control.
4. Which of the following terms is not used in project management?
A. Dummy activity. C. Lumpy demand.
B. Latest finish. D. Optimistic time.
5. A management consultant is scheduling a long-term research and development project. The time
table is very tight due to the advent of the rainy season and to inadequate research and development
staff complement. As the requirements are extensive and complex, what is the most appropriate
approach for planning and controlling the government highway project?
A. Cost-volume-profit analysis. C. Time-series or trend regression analysis.
B. Queuing theory analysis. D. Program evaluation review technique (PERT)
6. Which of the following statements is the least pertinent to the Project Evaluation Review Technique
(PERT)
A. It is a system, which uses network analysis and critical path methods.
B. It is more useful for analyzing the interrelationships of time and activities to discover potential
bottlenecks.
C. It involves measuring progress in relation to schedule, evaluating changes to schedule,
forecasting future progress and predicting and controlling costs.
D. Time is a primary consideration and this technique is particularly suite for problems, which
involve the combination of resources that maximize profits or minimize costs.
7. Which one of the following statements best describes a difference between basic PERT and the Critical
Path Method (CPM) of network analysis?
A. PERT does not allow for slack times on the activities while CPM does.
B. PERT considers only activity cost while CPM considers only activity time.
C. PERT uses probability distribution on the activity times while CPM uses point estimates for the
activity times.
D. PERT determines the least-cost path through a network while CPM determines the least-time
path through a network.
8. When using the PERT method for network analysis, the critical path through the network is
A. The least cost path. C. The path with the most slack.
B. The longest path through the network. D. The shortest path through the network.
9. Of these statements, which is the least pertinent to the concept of “slack” in relation to the Project
Evaluation and Review Technique (PERT)?
A. The less the amount of slack time, the more critical an activity or path.
B. Slack time information is useful for planning and continuous monitoring.
C. It is computed by subtracting the earliest expected time from the earliest allowable time.
D. If not exceeded, non-critical activities can be delayed without delaying the project’s completion
time.
10. In a Program Evaluation and Review Technique (PERT) system, activities along the critical path:
A. have a slack of zero
B. follow the line of best fit
C. may be delayed without affecting completion time
D. intersect at a corner point described by the feasible area
11. The process of adding resources to shorten selected activity times on the critical path in project
scheduling is called
A. A branch-and-bound solution. C. Material-requirements planning.
B. Crashing. D. The Delphi technique.
12. A quantitative technique used for selecting the combination of resources that maximize profits or
minimize costs is
A. Curvilenear analysis C. Linear programming
B. Dynamic programming D. Queuing theory

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13. Linear programming is used most commonly to determine the

A. Fastest timing.
B. Most advantageous prices.
C. Best use of scarce resources.
D. Mix of variables that will result in the largest quantity.
14. AB Woods Co. is planning to expand its production facilities, which is at present, a constraint. You are
asked to review the linear programming model. Among the items in the model, which will not be
found?
A. Networks. C. Slack variables.
B. Constraints. D. Independent and dependent variables.
15. Linear programming models are mathematical techniques in which an objective function is maximized
or minimized subject to constraints. These constraints must be fully specified before a linear
programming problem can be solved, and generally described:
A. Costs. C. Inefficiencies.
B. Dependent variables. D. Resources.
16. In a linear programming maximization problem for business problem solving, the coefficient of the
objective function usually are
A. Variable costs.
B. Marginal contributions per unit.
C. Usage rates for scarce resources.
D. Profit based on allocations of overhead and all indirect costs.
17. A transportation model is a special case of
A. Dynamic programming model. C. Linear programming model.
B. Economic order quantity model. D. PERT/CPM.
Questions 18 through 20 are based on the following information.
ReMetal, Inc. uses the following model to determine blends of new (n) metal and scrap (s) metal.
Max Z = P30N + P70S subject to:
3N + 2S < 15
2N + 4S < 18
18. These mathematical functions are an example of a(n)
A. Economic order quantity model. C. Parametric model.
B. Linear programming model. D. Present value model.
19. The two inequality functions are
A. Conditions. C. Objectives.
B. Constraints. D. Shadow prices.
20. The point where N = 2 and S = 3 would
A. Be a feasible point. C. Lie in a corner.
B. Be the optimal solution point. D. Minimize cost.
PROBLEMS
1. The following information applies to a project:
Activity Time (days) Immediate Predecessor
A 5 None
B 3 None
C 4 A
D 2 B
E 6 C, D
The earliest completion time for the project is
A. 11 days. C. 15 days.
B. 14 days. D. 20 days.
2. PAMPANGA COMPANY is planning to market a new product. The marketing research staff prepared
the following payoff probability distribution giving the relative likelihood of monthly sales volume
levels and the corresponding income (loss) for the new product;
Monthly sales volume Probability Income(loss)
2,500 0.10 P(25,000)
5,000 0.20 7,500
10,000 0.50 37,500
15,000 0.10 50,000
25,000 0.10 75,000
The expected value of the monthly income from the new product:
A. P18,750 C. P30,250
B. P22,500 D. P32,750

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3. The ILOCOS NORTE CORP. wants more information on the demand for its products. The following
data are relevant
Units demanded Probability of unit demand Total cost of units demanded
0 0.10 P0.00
1 0.15 1.00
2 0.20 2.00
3 0.40 3.00
4 0.10 4.00
5 0.05 5.00
What is the total expected value of the total cost of units demanded?
A. P2.40 C. P9.00
B. P7.40 D. P9.15
4. ILOCOS SUR CORP. has decided to increase its daily muffin purchases by 100 boxes. A box of muffins
costs P2 and sells for P3 through regular stores. Any boxes not sold through regular stores are sold
through ILOCOS SUR’s thrift store for P1. ILOCOS SUR assigns the following probabilities to selling
additional boxes:
Additional sales Probability
60 0.6
100 0.4
What is the expected value of ILOCOS SUR’s decision to buy 100 additional boxes of muffins?
A. P28 C. P52
B. P40 D. P68
5. The auditor is attempting to evaluate the potential dollar effect of a control breakdown in the sales
cycle. Two controls are involved. The probability that control A will fail is 10%, and the probability
that control B will fail is 5%. The controls are independent such that the failure of one does not affect
the failure of the other. In evaluating the potential exposure to the organization, the auditor
determines that the cost of control A's failure is P10,000, the cost of control B's failure is P25,000,
and the cost of failure of both control procedures at the same time is an additional P200,000.
If the control procedures are not made more effective, the expected cost to the organization is
A. P1,000 C. P3,250
B. P2,250 D. P32,250
6. In actual business, it is difficult to ascertain the value of information about a future event. However, it
is possible to compute the maximum expected value of additional information by computing the
expected value under conditions of certainty and comparing it with the expected value of the best
strategy under uncertainty. Assuming:
Expected value under certainty conditions P12,000
Expected value using best strategy under uncertainty 10,900
Expected value of perfect information 1,100
This means
A. Management is uncertain it will incur P10,900.
B. Management is certain it will realize P12,000.
C. Management can afford to spend P1,100 for perfect information.
D. Management can afford to incur P10,900 since it will earn a net income of P1,100.
Questions 7 and 8 are based on the following information.
A company has the following probabilities of profit (or loss) from an investment opportunity:
Profit Outlook Profit (Loss) Amount Probability
Optimistic P10,000 .30
Most likely 6,000 .55
Pessimistic (1,000) .15
7. What is the expected profit?
A. P6,000 C. P6,300
B. P6,150 D. P6,450
8. How much would the company be willing to pay before investing in the project to learn in advance
which of the three scenarios (optimistic, pessimistic, or most likely) would actually occur?
A. P0 C. P300
B. P150 D. P550
Questions 9 through 13 are based on the following information.
The LA UNION SOCIETY sells hot pretzels at the home football games. The pretzels are sold for P1.00
each, and the cost per pretzel is P0.30. Any unsold pretzels are discarded because they will be stale
before the next home game.
The frequency distribution of the demand for pretzels per game is presented below.
Unit Sales Volume Probability
2,000 pretzels .10
3,000 pretzels .15
4,000 pretzels .20

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CPAR :MS 9110_QUANTITATIVE TECHNIQUES BATCH MAY 2022

5,000 pretzels .35

6,000 pretzels .20
9. The estimated demand for pretzels at the next home football game using an expected value approach
is
A. 4,000 pretzels. C. 5,000 pretzels.
B. 4,400 pretzels. D. 6,000 pretzels.
10. The estimated demand for pretzels at the next home football game using a determinate approach
based on the most likely outcome is
A. 4,000 pretzels. C. 5,000 pretzels.
B. 4,400 pretzels. D. 6,000 pretzels.
11. The conditional profit per game of having 4,000 pretzels available but only selling 3,000 pretzels is
A. P1,800 C. P2,800
B. P2,100 D. P3,500
12. The conditional profit per game of having 4,000 pretzels available and selling all 4,000 pretzels is
A. P800 C. P2,100
B. P1,200 D. P2,800
13. The conditional profit (loss) per game of having 4,000 pretzels available but being able to sell 5,000
pretzels if they had been available is
A. P(1,225). C. P3,500.
B. P2,800. D. P4,025.
Questions 14 through 18 are based on the following information.
TARLAC CORP. has two products, a frozen dessert and ready-to-bake breakfast rolls, ready for
introduction. However, plant capacity is limited, and only one product can be introduced at present.
Therefore, TARLAC has conducted a market study, at a cost of P26,000, to determine which product
will be more profitable. The results of the study follow.
Sales of Desserts at P1.80/unit Sales of Rolls at P1.20/unit
Volume Probability Volume Probability
250,000 .30 200,000 .20
300,000 .40 250,000 .50
350,000 .20 300,000 .20
400,000 .10 350,000 .10
The costs associated with the two products have been estimated by TARLAC's cost accounting
department and are shown as follows.
Dessert Rolls
Ingredients per unit P.40 P.25
Direct labor per unit .35 .30
Variable overhead per unit .40 .20
Production tooling* 48,000 25,000
Advertising 30,000 20,000
*TARLAC treats production tooling as a current operating expense rather than capitalizing it as a fixed
asset.
14. According to TARLAC's market study, the expected value of the sales volume of the breakfast rolls is
A. 125,000 units. C. 275,000 units.
B. 260,000 units. D. Some amount other than those given.
15. Applying a deterministic approach, TARLAC's revenue from sales of frozen desserts would be
A. P216,000. C. P549,000.
B. P540,000. D. Some amount other than those given.
16. The expected value of TARLAC's operating profit directly traceable to the sale of frozen desserts is
A. P120,250. C. P198,250.
B. P150,250. D. Some amount other than those given.
17. In order to recover the costs of production tooling and advertising for the breakfast rolls, TARLAC's
sales of the breakfast rolls would have to be
A. 37,500 units. C. 100,000 units.
B. 60,000 units. D. Some amount other than those given.
18. The advertising expense estimated by TARLAC for the introduction of the new products is an example
of a(n)
A. Conversion cost. C. Discretionary cost.
B. Committed cost. D. Opportunity cost.
19. Ron Bagley is contemplating whether to investigate a labor efficiency variance in the Assembly
Department. It will cost P6,000 to undertake the investigation and another P18,000 to correct
operations if the department is found to be operating improperly. If the department is operating
improperly and Bagley fails to investigate, operating costs from the various inefficiencies are expected

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to amount to P33,000. Bagley will be indifferent between investigating and not investigating the
variance if the probability of improper operation is
A. 0.29 C. 0.60
B. 0.40 D. 0.71
20. Under favorable weather conditions, the management of ISABELA FARMS expects its raspberry crop
to have a P120,000 market value. An unprotected crop subject to frost has an expected market value
of P80,000. If ISABELA protects the raspberries against frost, the market value of the crop is still
expected to be P120,000 under frost-free conditions and P180,000 if a frost occurs. What must be
the probability of a frost for Flesher to be indifferent to spending P20,000 for tents to provide frost
protection?
A. 0.167 C. 0.250
B. 0.200 D. 0.333
Questions 21 and 22 are based on the following information:
NUEVA ECIJA INC. is evaluating the launching of a new product. If the product becomes successful,
the present value of future cash flows (excluding investment) is estimated at P2,000,000. If the
product is not successful, the present value of this flow is estimated at P400,000. The required
investment is P1,000,000.
21. What are the probabilities that would have to be assigned to the events “success” and “not success”
to make NUEVA ECIJA indifferent between the two actions “invest” and “do not invest”?
A. B. C. D.
Probability of success 37.5% 40% 45.5% 50%
Probability of not success 62.5% 60% 54.5% 50%
22. If NUEVA ECIJA thinks the probability of “success” is 60%, how much higher would be the expected
value of the act “invest” over the expected value of the act “do not invest”?
A. P360,000 C. P600,000
B. P400,000 D. P1,000,000
23. Rusty, the night manager at a local fast food restaurant, has had problems with his employees not
arriving on time. After doing some research, he discovered that, if his employees were on time the
night before, the probability that they would arrive on time again is .7. On the other hand, if they
were late the night before, the probability that they would arrive on time the following day is .4. What
is the probability that an employee will arrive on time the fourth day if they arrived on time the first
day?
A. .575 C. .61
B. .583 D. .7
24. QUIRINO CORP. used 30 hours to produce the first batch of units. The second batch took an
additional 18 hours. How many total hours will the first four batches require?
A. 61.44 hours. C. 96.2 hours.
B. 76.8 hours. D. 120.0 hours.
25. BATAAN INC. manufactures specialty components for the electronics industry in a highly labor
intensive environment. BATANGAS INC. has asked BATAAN to bid on a component that BATAAN made
for BATANGAS last month. The previous order was for 80 units and required 120 hours of direct labor
to manufacture. BATANGAS would now like 240 additional components. BATAAN experiences an 80%
learning curve on all of its jobs. The number of direct labor hours needed for BATAAN to complete the
240 additional components is
A. 187.2 C. 307.2
B. 256.0 D. 360.0
26. LAGUNA INC. has a target total labor cost of P1,500 for the first four batches of a product. Labor is
paid P10 an hour. If Tofte expects an 80% learning rate, how many hours should the first batch take?
A. 58.6 hours. C. 96.0 hours.
B. 73.2 hours. D. 150 hours.
27. RIZAL CORP. expects a 90% learning curve. The first batch of a new product required 100 hours.
The second batch should take
A. 80 hours. C. 95 hours
B. 90 hours. D. 100 hours.
28. If plant capacity for cutting time and shaping time is 80 hours and 100 hours, respectively, and it
takes four hours to cut and two hours to shape a standard model and two hours to cut and five hours
to shape a deluxe model, the maximum number of standard and deluxe models that can be produced
are:
A. 20 standard and 20 deluxe D. 40 standard and 20 deluxe
B. 20 standard and 40 deluxe E. 50 standard and 40 deluxe
C. 20 standard and 50 deluxe

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29. QUEZON INC. produces three products: A, B, and C. Four machines are used to produce the
products. The sales demands and time on each machine (in minutes) is as follows:
Demand Time on M1 Time on M2 Time on M3 Time on M4
A 100 10 15 10 5
B 80 10 5 10 5
C 60 5 5 15 15
There are 2,400 minutes available on each machine during the week. Which machine is the
bottleneck?
A. M1 C. M3
B. M2 D. M4
30. ROMBLON CORP. manufactures two types of electronic components, both of which must pass through
the Assembly and Finishing Departments. The following constraints apply:
Unit Contribution Hrs Required per unit
Product Selling Price Margin per Unit Assembly Finishing
Component 818 P120 P30 3 4
Component 810 P180 P45 4 6
Demand for Component 818 far exceeds the company’s capacity, but the company can only sell 60
units of component 810 each week. Workers in the Assembly department work a total of 200 hours
per week, and workers in the Finishing department work a total of 250 hours per week. The company
wants to know how many units of each component to produce to maximize profit. If X represents the
number of units of Component 818 and Y represents the number of units of Component 810, the
objective function would be
A. Maximize 30X + 45Y C. Minimize 30X + 45Y
B. Maximize 120X + 180Y D. Minimize 90X + 135Y
31. A mathematical technique that can be used to find the best possible combination of the company’s
limited resources is called linear programming. ALBAY CORP. manufactures two types of calculators,
Star 1 and Star 2. Each calculator is processed in two departments, departments 1 and 2. Daily
labor requirements are as follows:
Hours Required per Calculator Total Hours
Department Star 1 Star 2 Available
1 15 5 450
2 18 9 720
The marginal contributions are P15 on Star 1 and P0.10 on Star 2. From the items listed below what
are the labor constraints? (Assume X represents the number of units of Star 1, Y represents the
number of units of Star 2, P represents profit).
A. X>0;Y>0 C. 15X + 5Y < 450; 18X + 9Y < 720
B. P = 15X + 10Y; P = 15X + 5Y D. combination of (b) and (c)
32. Consider the following linear programming problem and assume that non-negativity constraints apply
to the independent variables:
Max CM = P14X + P23Y
Subject to
Constraint 1: 4X + 5Y < 3,200
Constraint 2: 2X + 6Y < 2,400
Which of the following are feasible solutions to the linear programming problem?
A. X = 0, Y = 400 C. X = 800, Y = 640
B. X = 600, Y = 240 D. X = 1,200, Y = 0
33. The AURORA CORP. makes toys Y and Z each of which needs two processes, cutting and sanding.
The contribution margin is P3.00 for product Y and P4.00 for product Z. The table below shows the
maximum number of units (constraints) of each product that may be processed in the two
departments.
Maximum Capacities (in Product Units)
Product Cutting Sanding
Y 30 40
Z 30 20
Considering the constraint on processing, which combination of product Y and Z maximizes the total
contribution margin?
A. B. C. D.
Product Y 0 units 20 units 30 units 40 units
Product Z 20 units 10 units 0 units 0 units

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Questions 34 and 35 are based on the following information.

CEBU CORP. has available production capacity of 180,000 hours. This can be used to produce 3
products in any combination. Total fixed cost is P180,000, other facts are:
PRODUCTS
X Y Z
Selling price P 8 P 23 P 5
Variable cost 7 12 2
No. of hours per unit 1 hr. 10 hrs. 2 hrs.
Market limits 5,000 50,000
34. The best possible combination of product is:
A. B. C. D.
Product X 4,000 30,000 30,000 80,000
Product Y 4,000 3,000 5,000 0
Product Z 50,000 50,000 50,000 50,000
35. The net profit associated with the best combination of products is:
A. P33,000 C. P54,000
B. P50,000 D. P55,000
Questions 36 through 38 are based on the following information.
In the two following constraint equations, X and Y represent two products (in units) produced by the
BOHOL CORP.
Constraint 1: 3X + 5Y < 4,200
Constraint 2: 5X + 2Y > 3,000
36. What is the maximum number of units of Product X that can be produced?
A. 600 C. 3,000
B. 1,400 D. 4,200
37. What is the feasible range for the production of Y?
A. 0 to 631 units C. 0 to 1500 units
B. 0 to 840 units D. 840 to 1,500 units
38. A solution of X = 500 and Y = 600 would violate
A. Constraint 1. C. both constraints.
B. Constraint 2. D. neither constraint.
39. ZAMBOANGA CORP. has estimated the first batch of product will take 40 hours to complete. A 90%
learning curve is expected. If labor is paid P15 per hour, the target labor cost for four batches of
product is
A. P600 C. P1,944
B. P2,160 D. P2,400
40. DAVAO CORP. used 30 hour to produce the first batch of units. The second batch took an additional
18 hours. How many total hours will the first four batches require?
A. 76.8 hours C. 120.0 hours
B. 96.2 hours D. 48.0 hours
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