In a Minimization Problem, a Negative Improvement Index in a Cell

question 82

Multiple Choice

In a minimization problem, a negative improvement index in a cell indicates that the:

• A) solution is optimal.
• B) total cost will increase if units are reallocated to that cell.
• C) current iteration is worse than the previous one.
• D) total cost will decrease if units are reallocated to that cell.
• E) problem has no feasible solution.

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Definitions:

Activity Variance

The difference between budgeted activity levels and actual activity levels.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Variable Costs

Expenditures that are directly linked to the production or sales volume, including direct labor and raw materials.

Refurbishing Materials

Materials used in the process of cleaning, repairing, and updating an item to bring it back to a like-new condition, often in electronics and furniture.