UGBA 104 - Exam 1 with Questions and Answers

UGBA 104 - Exam 1 with Questions and Answers Optimization - CORRECT ANSWER-maximizing or minimizing an objective function involving at least one variable Linear programming - CORRECT ANSWER-maximizing or minimizing an objective when the objective function AND all constraints involve linear functions of the variables 5 Steps in Formulating a Linear Program - CORRECT ANSWER-(1) understand decision problem (2) define decision variables (3) express objective as a linear function of decision variables (4) express constraints as a linear inequality (5) identify upper or lower bounds of decision variables Decision Variables - CORRECT ANSWER-variables that the decision maker can control to achieve their objective Objective - CORRECT ANSWER-the goal of the decision maker Constraints - CORRECT ANSWER-variables that restrict the decision maker's decision Slack - CORRECT ANSWER-the amount the left-hand side is lower than the right-hand side Binding Constraint - CORRECT ANSWER-constraint's slack = 0 (LHS = RHS) Non-Binding Constraint - CORRECT ANSWER-constraint's slack 0 (LHS RHS) Feasible Solutions - CORRECT ANSWER-solutions that satisfy all problem constraints Infeasible Solutions - CORRECT ANSWER-solutions that violate at least one problem constraint Optimal Solution - CORRECT ANSWER-feasible solution that meets the objective function (maximum or minimum value reached) Finding LP Optimal Solutions via Graphing - CORRECT ANSWER-(1) graph all constraints to determine the feasible plane (2) graph isoquant lines (objective function) until you reach the point of tangency with the feasible region (2.5) system of equations where two constraint functions intersec