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Free IIA IIA-CIA-Part3 Exam Questions (page: 27)

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Dale has 20 days to complete production of an order for an important customer. The customer wants 96 units of product that may be painted either red or white. The red units can be produced at a rate of 4 per day. The white units, because of a different quality of paint, can be produced at a rate of 7 per day. The materials for the red units cost US $80 each, while the white units cost US $120 each. Dale wants to keep costs at a minimum.
What is the constraint that expresses the number of units to be produced?

  1. 4R + 7W = 20
  2. (R/4) + (W-7) 20
  3. R + W=20
  4. 4R + 7W=96

Answer(s): B

Explanation:

The constraint function that expresses the number of units to be produced is R + W = 96, but that is not one of the answer choices. Another constraint is that the total quantities of red (R) and white (W) units must be produced in 20 or fewer days at a rate of 4 red units per day and 7 white units per day. Thus, the time constraint is (R + 4) + (W + 7) 20.



The data below were gathered on two different machine centers and two products.



Which item below would be part of a linear programming formulation of this problem?

  1. Maximize: Contribution 4A + 5B.
  2. Subject to: A 0.
  3. Subject to: 2.5A+4B60.
  4. Subject to: 4A + 5B130.

Answer(s): C

Explanation:

The linear programming solution is subject to constraints on the availability of machine hours in both centers. For example, products A and B require 2.5 and 4 hours per unit, respectively, in Machine Center 1, but only 60 hours are available. Hence, the optimal production of A and B to the following constraint:
2.5A + 4B 60



A firm must decide the mix of production of Product X and Product Y. There are only two resources used in the two products, resources A and B. Data related to the two products is given in the following table:


What is the appropriate objective function to maximize profit?

  1. 3X + 7Y
  2. 2X + Y
  3. 8X + 6Y
  4. 5X + 8Y

Answer(s): C

Explanation:

The objective function is the function to be optimized. This firm wishes to maximize profits on the sales of two products (X and Y). Based on profits per unit (US $8 and US $6, respectively), the objective function is 8X + 6Y.



Under throughput costing, the only cost considered to be truly variable in the short run is:

  1. Direct materials.
  2. Direct labor.
  3. Manufacturing overhead.
  4. All manufacturing costs are considered variable.

Answer(s): D

Explanation:

Throughput costing, also called super variable costing, recognizes only direct materials costs as being truly variable and thus relevant to the calculation of throughput margin.



The immediate goal of a theory of constraints (TOC) analysis is to:

  1. Maximize the efficiency of the entire production process.
  2. Minimize direct materials cost.
  3. Maximize contribution margin through the constraint.
  4. Smooth production flow to eliminate backup in the system.

Answer(s): C

Explanation:

A basic principle of TOC analysis is that short-term profit maximization requires maximizing the contribution margin through the constraint, called the throughput margin or throughput contribution.



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