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Trey Leeman, Operations Manager at National Consumers, Inc. (NCI), is evaluating
alternatives for increasing capacity at NCI's Fountain Hill plant. He has identified four
alternatives, and has constructed the following payoff table which shows payoffs (in
$1,000,000's) for the three possible levels of market demand.
If Trey uses the maximin criterion, the appropriate alternative would be:
_____________.
a) Lease New Equipment
b) Purchase New Equipment
c) Add Third Shift
d) Do Nothing
e) Do everything
Which scale of measurement has these two properties: linear distance is meaningful and
the location of origin (or zero point) is absolute (or natural)?
a) Interval level
b) Ordinal level
c) Nominal level
d) Ratio level
e) Relative level
The Poisson distribution is being used to approximate a binomial distribution. Ifn=60
andp=0.02, what value of lambda would be used?
a) 0.02
b) 12
c) 0.12
d) 1.2
e) 120
A graph that plots the number of nonconformances per item for multiple samples is
called a(n) _______.
a) chart
b) R chart
c) p chart
d) c chart
e) Pareto chart
Max Sandlin is exploring the characteristics of stock market investors. He found that
sixty percent of all investors have a net worth exceeding $1,000,000; 20% of all
investors use an online brokerage; and 10% of all investors a have net worth exceeding
$1,000,000 and use an online brokerage. An investor is selected randomly, and E is the
event "net worth exceeds $1, 000, 000," and O is the event "uses an online brokerage."
P(O|E) = _____________.
a) 0.17
b) 0.50
c) 0.80
d) 0.70
e) 0.88
The following graphic of PCB Failures is a _____________.
a) Scatter Plot
b) Pareto Chart
c) Pie Chart
d) Cumulative
Histogram Chart
e) Line diagram
The number of defects per 1,000 feet of extruded plastic pipe is best modeled with the
________________.
a) Poisson distribution
b) Pascal distribution
c) binomial distribution
d) hypergeometric distribution
e) exponential distribution
In exponential smoothing models, the value of the smoothing constant may be any
number between ___________.
a) -1 and 1
b) -5 and 5
c) 0 and 1
d) 0 and 10
e) 0 and 100
Sue Taylor, Director of Global Industrial Sales, is concerned by a deteriorating sales
trend.
Specifically, the number of customers is stable at 1,500, but they are purchasing less
each year.
She orders her staff to search for causes of the downward trend by surveying all 1,500
industrial customers. One question on the survey asked the customers: "How many
people does your company employ? The measurement level for this question is
__________.
a) interval level
b) ordinal level
c) nominal level
d) relative level
e) ratio level
During the Valentine's season, different offices in a company are encouraged to decorate
their doors. A committee then goes around and ranks the doors according to how well
the doors are decorated. The best door gets a ranking of "1"; the second best gets a
ranking of "2", etc. The numbers of these rankings represent which level of data?
a) Interval level
b) Ordinal level
c) Nominal level
d) Ratio level
e) Relative level
Nels Neugent, Purchasing Manager at Mid-West Medical Center, is designing a p chart
to monitor the proportion of defective purchase orders issued at Mid-West. He has the
proportions defective for 22 samples of purchase orders. Each sample contains 150
purchase orders, and the average proportion defective is 0.08. The lower control limit
for Nels's p chart is ___________.
a) 0.0447
b) 0.0283
c) 0.0135
d) 0.0000
e) 0.5090
In the Wilcoxon test of the differences between two populations, the value z statistic
was calculated to be 1.80. If the level of significance is 0.05, which of the following
decisions is appropriate?
a) Reject the null hypothesis
b) Do not reject the null hypothesis
c) Indeterminate without the sample size
d) Indeterminate without all of the data
e) Inconclusive
The city golf course is interested in starting a junior golf program. The golf pro has
collected data on the number of youths under 13 that have played golf during the last 4
months. Using a three-month moving average (with weights of 5, 3, and 1 for the most
current value, next most current value and oldest value, respectively), the forecast value
for October made at the end of September in the following time series would be
__________.
a) 24
b) 21
c) 21.56
d) 19.22
e) 22
The high and low values of the "ratios of actuals to moving average" are ignored when
finalizing the seasonal index for a period (month or quarter) in time series
decomposition. The rationale for this is to ________.
a) reduce the sample size
b) eliminate autocorrelation
c) minimize serial correlation
d) eliminate the irregular component
e) eliminate the trend
Suppose you are testing the null hypothesis that a population mean is less than or equal
to 46, against the alternative hypothesis that the population mean is greater than 46. If
the sample size is 25, is known, and alpha = .01, the critical value of zis _______.
a) 1.645
b) -1.645
c) 1.28
d) -2.33
e) 2.33
Within a range of zscores from -2 to +2, you can expect to find _______ per cent of the
values in a normal distribution.
a) 95
b) 99
c) 68
d) 34
e) 100
Discrete Components, Inc. manufactures a line of electrical resistors. Presently, the
carbon composition line is producing 100 ohm resistors. The population variance of
these resistors "must not exceed 4" to conform to industry standards. Periodically, the
quality control inspectors check for conformity by randomly select 10 resistors from the
line, and calculating the sample variance. The last sample had a variance of 4.36.
Assume that the population is normally distributed. Using = 0.05, the critical value of
chi-square is _________________.
a) 18.31
b) 16.92
c) 3.94
d) 3.33
e) 19.82
A researcher wants to determine the sample size necessary to adequately conduct a
study to estimate the population mean to within 5 points. The range of population
values is 80 and the researcher plans to use a 90% level of confidence. The sample size
should be at least _______.
a) 44
b) 62
c) 216
d) 692
e) 700
A time series analysis was performed to determine the number of new online customers
that joined the "Jelly of the Month Club". The actual number of new customers, the
forecast values and error terms is presented in the following table. The mean error (ME)
for this forecast is ___________.
a) -0.50
b) 0.50
c) 1.50
d) 7.00
e) 3.00
Let F be the event that a student is enrolled in a finance course, and let S be the event
that a student is enrolled in a statistics course. It is known that 40% of all students are
enrolled in a finance course and 35% of all students are enrolled in statistics. Included
in these numbers are 15% who are enrolled in both statistics and finance. A student is
randomly selected, what is the probability that the student is enrolled in either finance
or statistics or both?
a) 0.15
b) 0.75
c) 0.60
d) 0.55
e) 0.90
James Desreumaux, VP of Human Resources of American First Banks (AFB), is
reviewing the employee training programs of AFB banks. His staff randomly selected
personnel files for 100 tellers in the Southeast Region and determined that their mean
training time was 25 hours. Assume that the population standard deviation is 5 hours.
The 92% confidence interval for the population mean of training times is ________.
a) 16.25 to 33.75
b) 24.30 to 25.71
c) 17.95 to 32.05
d) 24.12 to 25.88
e) 24.45 to 27.32
The staff of Ms. Tamara Hill, VP of Technical Analysis at Blue Sky Brokerage,
prepared a frequency histogram of market capitalization of the 937 corporations listed
on the American Stock Exchange in January 2013.
Approximately ________
corporations had
capitalization exceeding
$200,000,000.
a) 50
b) 100
c) 700
d) 800
e) 890
An "all possible regressions" search of a data set containing "k" independent variables
will produce __________ regressions.
a) 2k -1
b) 2k- 1
c) k2- 1
d) 2k- 1
e) 2k
Melissa Rossi, Product Manager at National Consumers, Inc. (NCI), is evaluating
alternatives for introducing a new package for toothpaste. She has identified four
alternative markets, and has constructed the following table which shows NCI's rewards
(in $1,000,000's) for various levels of acceptance by the markets and their probabilities.
If Melissa uses the EMV criterion, the appropriate choice would be: ________.
a) Northeast Only
b) Southeast Only
c) National
d) None (don't introduce the new package)
A graph that plots the proportions of items in noncompliance for multiple samples is
called a(n) _______.
a) chart
b) R chart
c) p chart
d) c chart
e) Pareto chart
Ray Crofford is evaluating investment alternatives to invest $100,000 which he
inherited from his grandfather. His investment advisor has identified four alternatives
and constructed the following payoff table which shows expected profits (in $10,000's)
for various market conditions.
If Ray uses the Hurwicz criterion with alpha = 0.9, the appropriate choice is ______.
a) T-Bills
b) Stocks
c) Bonds
d) Mixture
e) None
In the regression equation, y = 54.78 + 1.45x, the intercept is _______.
a) 1.45
b) -1.45
c) 54.78
d) -54.78
e) 0.00
Consider the following frequency distribution:
What is the cumulative frequency of the second class interval?
a) 25
b) 45
c) 70
d) 100
e) 250
If x, the time (in minutes) to complete an oil change job at certain auto service station,
is uniformly distributed over the interval 20 to 30, inclusively (20 x 30), then the
standard deviation of this distribution is __________________.
a) unknown
b) 8.33
c) 0.833
d) 2.89
e) 1.89
Suppose a population has a mean of 400 and a standard deviation of 24. If a random
sample of size 144 is drawn from the population, the probability of drawing a sample
with a mean less than 402 is _______.
a) 0.3413
b) 0.6826
c) 0.8413
d) 0.1587
e) 0.9875
