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Chapter 7 - Nonlinear Optimization Models
1. Which of the following is not one of the reasons an optimization model can become nonlinear?
a. Nonconstant returns to scale.
b. The model objective is to minimize the sum of squared differences.
c. The model objective is a function of a variable times multiplied by a function of that same variable
d. The model objective is to minimize the sum of absolute errors.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy |Bloom's Comprehension
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
TOPICS: 7.1 Introduction
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
2. Which of the following is not one of the common types of nonlinear models?
a. Pricing models.
b. Advertising and response selection models.
c. Network flow models.
d. Portfolio optimization models.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy |Bloom's Comprehension
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
TOPICS: 7.1 Introduction
OTHER: BUSPROG - Communication |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
5. Which of the following is not one of the conditions for maximization in a nonlinear problem?
a. The objective function is concave
b. The logarithm of the objective function is concave
c. The starting values are bounded
d. The constraints are linear
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate |Bloom's Comprehension
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
TOPICS: 7.2 Basic Ideas of Nonlinear Optimization - Conditions for Maximization Problems
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
6. If you try different starting values for the changing cells and obtain different solutions:
a. you can be confident there is no solution
b. there must be a mistake in your objective function
c. there must be a mistake in one of your constraints
d. you can keep the best solution you have found and hope that it is indeed optimal
ANSWER: d
POINTS: 1
DIFFICULTY: Easy |Bloom's Application
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
TOPICS: 7.2 Basic Ideas of Nonlinear Optimization - When the Assumptions Do Not Hold
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
Copyright Cengage Learning. Powered by Cognero. Page 2
Chapter 7 - Nonlinear Optimization Models
DATE MODIFIED: 10/21/2017 9:14 PM
7. Which of the following is not one of the useful options within Solver's Multistart box?
a. Population size
b. Error distribution
c. Random seed
d. Upper or lower bound constraints on all changing cells
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate |Bloom's Comprehension
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
TOPICS: 7.2 Basic Ideas of Nonlinear Optimization - Multistart Option
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
9. Which of the following types of fit should be selected in Excel's Trendline function if a constant elasticity curve is to be
used to model demand?
a. Exponential
b. Logarithmic
c. Polynomial
d. Power
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate |Bloom's Application
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
TOPICS: 7.3 Pricing Model - Estimating the Demand Function
Copyright Cengage Learning. Powered by Cognero. Page 3
Chapter 7 - Nonlinear Optimization Models
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
10. As an objective, minimizing the sum of squared errors is equivalent to minimizing the
a. root mean square error
b. weighted sum of squared errors
c. sum of absolute errors
d. maximum absolute error
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate |Bloom's Comprehension
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
TOPICS: 7.4 Advertising Response and Selection Models - Developing the Spreadsheet Model
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
11. Relative to linear optimization models, nonlinear optimization models are typically more difficult to solve.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy |Bloom's Comprehension
QUESTION TYPE: True / False
HAS VARIABLES: False
TOPICS: 7.1 Introduction
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
12. Solver can get stuck at a global optimum and never find the local optimum.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy |Bloom's Comprehension
QUESTION TYPE: True / False
HAS VARIABLES: False
TOPICS: 7.2 Basic Ideas of Nonlinear Optimization
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
Copyright Cengage Learning. Powered by Cognero. Page 4
Chapter 7 - Nonlinear Optimization Models
14. A function is convex if a line drawn connecting two points on the curve never lies below the curve.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate |Bloom's Comprehension
QUESTION TYPE: True / False
HAS VARIABLES: False
TOPICS: 7.2 Basic Ideas of Nonlinear Optimization - Convex and Concave Functions
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
16. Solver is guaranteed to find the global minimum (if it exists) if the objective function is concave and the constraints
are linear.
a. True
b. False
17. In pricing models, two products are substitutes for each other if a larger price for one product tends to induce
customers to demand less of the other.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate |Bloom's Comprehension
QUESTION TYPE: True / False
HAS VARIABLES: False
TOPICS: 7.3 Pricing Model - Electricity Pricing at Florida Power and Light
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
18. In advertising response models, a typical source of nonlinearity is a decreasing marginal effect, where each extra ad
gains fewer exposures than the previous ad.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy |Bloom's Comprehension
QUESTION TYPE: True / False
HAS VARIABLES: False
TOPICS: 7.4 Advertising Response and Selection Models
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
19. In some nonlinear models, Solver will find the optimal solution only if the starting solution is reasonably close to the
optimal solution.
a. True
b. False
ANSWER: True
POINTS: 1
20. The amount invested is one of the required inputs in a portfolio optimization model.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate |Bloom's Application
QUESTION TYPE: True / False
HAS VARIABLES: False
TOPICS: 7.7 Portfolio Optimization Models - Solution
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
Exhibit 7-1
A company manufactures two products. If it charges price p1 for product 1 and price p2 for product 2, it can sell quantities
q1 = 55 − 3p1 + 2p2 and q2 = 75 + 2p1 − 2p2 for products 1 and 2, respectively. It costs the company $20 to produce a unit
of product 1 and $65 to produce a unit of product 2.
21. Refer to Exhibit 7-1. How many units of each product should the company produce? What prices should it charge, to
maximize profit?
ANSWER: The optimized model below shows that the company should produce 55 units of product 1 and no
units of product 2, which will generate total profit of $3,025. The respective prices of product 1 and
product 2 are $75 and $112.50.
POINTS: 1
DIFFICULTY: Moderate |Bloom's Application
QUESTION TYPE: Subjective Short Answer
HAS VARIABLES: False
Copyright Cengage Learning. Powered by Cognero. Page 7
Chapter 7 - Nonlinear Optimization Models
PREFACE NAME: Exhibit 07-1
TOPICS: 7.3 Pricing Model
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
22. Refer to Exhibit 7-1. Suppose the company must produce a minimum of 20 units of each product. How many units of
each product should the company produce in that case? What prices should it charge, to maximize profit?
ANSWER: The optimized model with an added production constraint shows that the company should produce
35 units of product 1 and the minimum of 20 units of product 2, which reduces total profit to $2,675.
The respective prices of product 1 and product 2 are $75 and $102.50.
POINTS: 1
DIFFICULTY: Easy |Bloom's Application
QUESTION TYPE: Subjective Short Answer
HAS VARIABLES: False
PREFACE NAME: Exhibit 07-1
TOPICS: 7.3 Pricing Model
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
23. Refer to Exhibit 7-1. Suppose the company is required by regulation to charge the same price for both products. How
many units of each product should the company produce in that case? What prices should it charge, to maximize profit?
ANSWER: The optimized model with the added constraint below shows that the company should produce 18
units of product 1 and no units of product 2, which reduces total profit to only $306. The price of
both products is $37.00. Note that integer constraints were imposed on the production quantities.
POINTS: 1
DIFFICULTY: Easy |Bloom's Application
QUESTION TYPE: Subjective Short Answer
HAS VARIABLES: False
PREFACE NAME: Exhibit 07-1
TOPICS: 7.3 Pricing Model
Copyright Cengage Learning. Powered by Cognero. Page 8
Chapter 7 - Nonlinear Optimization Models
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
Exhibit 7-2
A soda producer makes and sells two products, Classic Cola and Diet Cola. During the planning period, if the producer
spends x1 dollars on promotion of Classic Cola, it can sell 100x10.5 cases of Classic Cola, and if it spends x2 dollars on
promotion of Diet Cola, it can sell 10x20.75 cases of Diet Cola. Each case of Classic Cola sells for $12.00 and costs $0.95
to produce and ship to customers, while each case of Diet Cola sells for $12.50 and costs $1.00 to produce and ship to
customers. A total of $7,500 is available for promotion during the planning period.
24. Refer to Exhibit 7-2. Formulate and solve a nonlinear optimization model to help this soda producer identify the best
promotional strategies for its two products.
ANSWER: The optimized model below shows that the company should spend $2,810 promoting Classic Cola
and $4,690 promoting Diet Cola, which will generate total profit of $116,250.
POINTS: 1
DIFFICULTY: Moderate |Bloom's Application
QUESTION TYPE: Subjective Short Answer
HAS VARIABLES: False
PREFACE NAME: Exhibit 07-2
TOPICS: 7.4 Advertising Response and Selection Models
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
25. Refer to Exhibit 7-2. Suppose the producer can double the promotional budget. Formulate and solve a nonlinear
optimization model to help this soda producer identify the best promotional strategies for its two products in that case.
Does the change in profit justify the budget increase? Does the proportional amount spent promoting the two products
remain the same?
ANSWER: The optimized model below shows that the company should spend $4,254 promoting Classic Cola
and $10,746 promoting Diet Cola, which will generate total profit of $178,447. Therefore, the
increase in budget is well worth it. The proportional amount spent promoting Diet Cola grows from
62.5% in the $7,500 budget case to 71.6% in this case.
POINTS: 1
DIFFICULTY: Easy |Bloom's Application
QUESTION TYPE: Subjective Short Answer
HAS VARIABLES: False
PREFACE NAME: Exhibit 07-2
TOPICS: 7.4 Advertising Response and Selection Models
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
Exhibit 7-3
A company has the following historical data on the number of ad exposures and the corresponding number of units sold of
one of its products:
26. [Part 1] Refer to Exhibit 7-3. Formulate a nonlinear optimization model to find the parameters of a function of the
form: f(x) = axb to model demand for its product as a function of ad exposures (x).
POINTS: 1
DIFFICULTY: Moderate |Bloom's Application
QUESTION TYPE: Subjective Short Answer
HAS VARIABLES: False
PREFACE NAME: Exhibit 07-3
TOPICS: 7.4 Advertising Response and Selection Models - Estimating Advertising Response Function
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
27. [Part 2] Refer to Exhibit 7-3. Formulate a nonlinear optimization model to find the parameters of a function of the
form: f(x) = a(1 − e−bx) to model demand for its product as a function of ad exposures (x). In terms of fit, is this model
better or worse than the model in Part 1? Explain your answer
ANSWER: The parameterized model is:
The sum of squared errors is lower (48.7 vs. 689.9) in this case, so this is a better model.
POINTS: 1
DIFFICULTY: Moderate |Bloom's Application
QUESTION TYPE: Subjective Short Answer
HAS VARIABLES: False
PREFACE NAME: Exhibit 07-3
TOPICS: 7.4 Advertising Response and Selection Models - Estimating Advertising Response Function
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
Exhibit 7-4
You are given the following means, standard deviations, and correlations for the annual return on three stocks. The means
are 0.08, 0.10, and 0.15. The standard deviations are 0.15, 0.20, and 0.30. The correlation between stocks 1 and 2 is 0.62,
between stocks 1 and 3 is 0.32, and between stocks 2 and 3 is 0.43.
28. [Part 1] Refer to Exhibit 7-4. Determine the minimum variance portfolio that yields an expected annual return of at
least 0.10
POINTS: 1
DIFFICULTY: Challenging |Bloom's Application
QUESTION TYPE: Subjective Short Answer
HAS VARIABLES: False
PREFACE NAME: Exhibit 07-4
TOPICS: 7.7 Portfolio Optimization Models
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
29. [Part 2] Refer to Exhibit 7-4. Determine the minimum variance portfolio that yields an expected annual return of at
least 0.12. How has the portfolio changed from your answer in Part 1?
ANSWER: The optimized portfolio is heavily weighted to Stock 3, which increases the standard deviation by
50%.
POINTS: 1
DIFFICULTY: Easy |Bloom's Application
QUESTION TYPE: Subjective Short Answer
HAS VARIABLES: False
PREFACE NAME: Exhibit 07-4
TOPICS: 7.7 Portfolio Optimization Models
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
30. Refer to Exhibit 7-4. Suppose you set the weights in the portfolio to a maximum of 0.45 for each stock. Is it possible
to achieve a 12% return? What is the portfolio standard deviation in that case?
ANSWER: Yes, the optimized portfolio with the added diversification constraint shows that a 12% return is still
achievable. The standard deviation of the return increases slightly to .198.
POINTS: 1
DIFFICULTY: Easy |Bloom's Application
QUESTION TYPE: Subjective Short Answer
HAS VARIABLES: False
PREFACE NAME: Exhibit 07-4
TOPICS: 7.7 Portfolio Optimization Models
OTHER: BUSPROG - Analytic |DISC - Nonlinear Models
DATE CREATED: 5/17/2017 3:49 PM
DATE MODIFIED: 10/21/2017 9:14 PM
Language: French
DE
L’ÉMERAUDE
Droits de traduction et de reproduction réservés pour tous les pays
y compris la Suède, la Norvège et la Hollande.
A. SUARÈS
LE LIVRE
DE
L’ÉMERAUDE
— EN BRETAGNE —
PARIS
CALMANN-LÉVY, ÉDITEURS
3, RUE AUBER, 3
Amico Meo
MAVR. POTTECHER
LOTTHARIG.
D. P. Q. E.
MCM
DÉDICACE
VERS L’OUEST
De Paris à Plou-Gastel. En juin.
Une vague d’azur court dans le ciel profond; peu à peu elle gagne sur le
brouillard de la Ville, ces nuages faits de fumée noire en spirales, et ce
dôme fiévreux de poussière en fusion. Mais la lueur de la fournaise poursuit
longtemps le prisonnier dans sa fuite. Babylone flambe, la nuit, sous le ciel
noir et pourpre.
L’air bleu recule. Le dais du firmament se tend plus haut sur le fleuve.
Le deuil et le sang se voilent. Les lumières au loin se font plus rares. La nuit
était venue, une nuit étincelante, pleine d’étoiles et sans lune,—la nuit qui
accomplit toutes les formes. Mais Paris ne voulait pas disparaître. Les
bourgs satellites retentissent encore de rumeurs, de feux, d’agitation. Enfin,
les petites villes s’éteignent une à une, comme les lampions d’une fête. Et la
lumière de la Ville immense, ce rouge reflet d’or sanglant et de brillante
poussière, s’efface du ciel pacifié.
L’espace s’élargit. La plaine se déroule sans heurts et sans surprise. L’air
vient au visage plus vif. Saines, paisibles, uniformes, les senteurs du soir se
répandent; elles n’ont plus l’odeur changeante et lourde de la fièvre.
La solitude sacrée de la campagne, où l’on entend l’haleine du silence: la
Beauce vaste, large et impassible. Sur l’horizon rougeâtre s’était arrêtée,
comme sur un talus, après la bataille, une armée de nuages obliques, une
cavalerie suspendue, des chevaux violets et des dragons échevelés, coiffés
de casques; toute la cavalcade rougeoyait dans l’ombre bleuâtre, et campait.
Avec elle, sur la plaine, régnait une tristesse auguste.
Enfin la Ville est oubliée. Enfin il fait silence.
Le train roule sur les rails, à toute vitesse, dans la nuit. Vers l’Ouest se
hâte la bête de fer, haletante, qui s’ébroue en sifflant, et secoue son collier
de fumée: vers l’Ouest, là où la terre finit et où l’Océan s’espace, image du
ciel sans bornes.
L’Ouest!... Les mots ont leur magie, et comme les parfums ils évoquent
les visions lointaines. L’Ouest a pour moi la féerie de la lumière qui
descend, du soleil qui tombe, la gloire passionnée du couchant, le
crépuscule sur la lande qui rêve et la splendeur de la mer, cette beauté
déserte... Sur l’âme changeante de l’Ouest c’est le prestige de ce qu’elle
préfère, le songe de sa demeure ardente et triste, au bord de la mer, devant
l’horizon où s’attarde la flamme du jour sanglant, couchée sur l’heure
occidentale...
Puis, ce fut la nuit noire, la nuit humide, qui trempe les labours.
Au réveil, le coucou flûta dans la paix des champs. Sur la rivière et la
prairie courait la mince brume de l’aube. La bonne petite pluie, qui
chuchote et salue mille fois les feuilles, au delà de Rennes annonça l’aurore
à la campagne. Elle cessa bientôt; et le jour vert parut dans un voile d’or fin,
teinté de rose. L’âme fraîche de l’Occident disait une chère contrée.
Dans une petite gare, on ne parla plus français, et j’entendis la langue
dure dont l’accent chante. Je vis les haies mouillées, et les paisibles vaches.
Je revis le ciel humide qui sourit de plus près aux ajoncs sombres sur la
lande qui lui rend, en rêvant, son grave et mélancolique sourire; le pays où
toutes les femmes en noir portent des coiffes blanches, et où les hommes
très droits ont l’air supérieur à leur fortune.
Une jeune fille peignait, à la fenêtre, ses blonds cheveux, que le soleil
poudrait de miel rosé. Et la fumée s’éleva des toits au soleil levant.
Une ville, un quai désert, où un seul homme parle à grand fracas, un
corps énorme, rond de graisse, une figure joviale, une voix qui prend tout le
monde à témoin, et à qui personne ne répond; et chacun de savoir, sans le
dire, que cet ogre familier jusque dans la mauvaise humeur, n’est pas du
pays... Une marchande porte sur un plat des journaux et des brioches, sans
les annoncer, sans les offrir: comme on la hèle, elle ne tourne seulement pas
la tête à l’appel; elle va du même pas indifférent, et pour un peu semble
prête à fuir le client qui crie... En voiture monte un grand homme botté, hâlé
et blond, une figure ferme et vive, au front sec, un jeune seigneur dont les
yeux et les gestes brusques trahissent la vivacité intérieure.
Une petite laitière tire par les cornes une grosse vache, à la croupe noire;
la bête immobile, entêtée, ne veut pas venir sur la lande; et plantée des
quatre pieds sur le sol, la queue collée au flanc, elle est de pierre. Là-
dessous, la fillette s’agite; et, quand elle tourne autour de la vaste bête,
passant par derrière, l’arc ouvert des jambes écartées semble une porte, où
la petite fille va entrer...
Puis, du ciel gris encore, et de la pluie; un grain violent, que rien
n’annonce, une averse brutale, qui tourne court. Dans la prairie si verte, que
bornent les pommiers, des poulains galopent, gauches et gais comme de
gros enfants au sortir de table... Une vieille, rouge et bigle, le front strié de
veines bleues, arrache des pousses claires; elle les tient, vertes entre ses
doigts durs et bruns, comme au bout d’une serpe. Et deux petits moulins
noirauds, dans le ciel bleu d’eau pure, au sommet d’une hauteur herbeuse,
où un rayon de soleil somnole, ressemblent à de gros insectes, qui tirent en
arrière une de leurs pattes...
Je revois les prés, l’avoine nacrée, la campagne silencieuse, les espaces
verdoyants, et l’étendue déserte, sans villes et sans hommes, les yeux
innombrables de l’herbe mouillée, les chênes sur le roc, et, descendant la
pente, les houx dentelés que l’on préfère à tous les arbres, quand on les
aime...
Et voici, voici la mer!... Je suis en Cornouailles.
II
DE LA FENÊTRE
A Ker Joz.., en Benodet, Juillet.
LA PAIX DE KERGOAT
En Loc Ronan. Juillet.