All quadratic optimization models have nonlinear constraints.
Explain the similarity between the formulas for computing population mean and
expected value of discrete random variable X.
AND(condition 1, condition 2’¦) is a logical function that returns TRUE if all conditions
are true and FALSE if not.
The VLOOKUP function in Excel can be used to generate outcomes from any discrete
distribution.
In a MATCH function, the default value for match_type = 0.
The process of developing good, useful, and correct spreadsheet models is known as
spreadsheet engineering.
The average payoff strategy weights the likelihood that the actual outcomes can occur.
A payoff table is a matrix whose rows correspond to events and whose columns
correspond to decisions.
A constraint function is a function of the decision variables in the problem.
Two variables can only have a statistical relationship if there is a cause-and-effect factor
between them.
AutoFilter creates filtering criteria based on the type of data being filtered.
In the average linkage clustering, the distance between two clusters is defined as the
average of distances between all pairs of objects, where each pair is made up of one
object from each group.
Whenever a constraint has positive slack, the shadow price is equal to one.
A normal distribution has a limited range and can be skewed in either direction.
To use the VLOOKUP(lookup_value, table_array, col_index_num), the table must be
sorted in descending order.
Logistic regression cannot be employed when the dependent variable is binary.
Which of the following is the first stage of joining clusters in agglomerative
hierarchical clustering?
A) by separating clusters into finer groups
B) by joining two clusters farthest away from each other
C) by joining two clusters that are not at a Euclidean distance
D) by joining two clusters that are closest to each other
________ involves selecting items from a population so that every subset of a given
size has an equal chance of being selected.
A) Convenience sampling
B) Subjective sampling
C) Judgment sampling
D) Simple random sampling
________ is the term used by Analytic Solver Platform for systematic methods of
“what-if” study.
A) Scenario
B) Validity
C) Parametric sensitivity analysis
D) Goal Seek
Below is a spreadsheet for Trance Electronics.
Suppose that the project manager of Trance Electronics has identified the following
uncertain variables in the model and the distributions and parameters that describe
them, as follows: Market size: normal with mean of 20,000,000 units and standard
deviation of 4,000,000 units. R&D costs: uniform between $600,000,000 and
$800,000,000.
Clinical trial costs: lognormal with mean of $150,000,000 and standard deviation
$30,000,000. Annual market growth factor: triangular with minimum = 2%,
maximum = 6%, and most likely = 3%.
Annual market share growth rate: triangular with minimum = 15%, maximum =
25%, and most likely = 20%.
The number of trials per simulation is equal to 10,000 at a Sim. Random Seed of 2. Run
the simulation and answer the following questions using the Risk Solver Platform.
What is the coefficient of variation obtained from the simulation results of the net
present value?
A) 1.78392
B) -2.23958
C) -1.36659
D) 2.87645
Consider an event X comprised of three outcomes whose probabilities are 9/18, 1/18,
and 6/18. Compute the probability of the complement of the event.
A) 2/18
B) 1/2
C) 16/3
D) 16/18
Which of the following Excel functions is applied to test for significance of regression?
A) COVAR
B) ANOVA
C) SINH
D) TREND
Using an empirical distribution precludes sampling values outside the range of the
actual data.
Below is a payoff table that lists four mortgage options:
What is the worst payoff rate for the 5-year ARM?
A) $ 50,894
B) $ 48,134
C) $ 51,641
D) $ 55,895
Which of the following is true of the coefficient of skewness (CS)? A) If the CS is
positive, the distribution of values tails off to the left.
B) If the CS value is between 0.5 and 1, the skewness is considered to be moderate. C)
If the CS is closer to zero, the degree of skewness is considered to be high.
D) If the CS value is between -0.5 and -1, the skewness is considered negligible.
Consider the following spreadsheet for an outsourcing decision model.
We assume that the production (demand) volume is normally distributed with a mean of
1,000 and a standard deviation of 100. For the unit cost, select the triangular
distribution. It has a minimum value of $150, most likely value of $165, and a
maximum value of $190. The number of trials per simulation is equal to 5,000 at a Sim.
Random Seed of 1. Run the simulation and answer the following question(s) using the
Risk Solver Platform.
What is the cost difference lower cutoff in thousands of dollars if the likelihood is 60%?
A) approximately 13.56
B) approximately 22.45
C) approximately 29.67
D) approximately 38.97
In forecasting, what is an index?
A) It is a single measure that weights multiple indicators and provides a measure of
overall expectation.
B) It is a stream of historical data, such as weekly sales.
C) It is a time series that does not have trend, seasonal, or cyclical effects but is
relatively constant and only exhibits random behavior.
D) It is a measure that provides a complete forecast.
Stone Age Surfboards is a small manufacturer of two types of popular low-tide
surfboards, the Graystone and the Lava models. The manufacturing process consists of
two departments: fabrication and finishing. The fabrication department has 8 skilled
workers, each of whom works 9.25 hours per day. The finishing department has 5
workers, each of whom works a 6 -hour shift per day. Each pair of Graystone
surfboards requires 2.5 labor hours in the fabrication department and 2 labor hours in
finishing. The Lava model requires 4.2 labor-hours in fabrication and 3.6 labor-hours in
finishing. The company operates 6 days a week. It makes a per unit profit of $40 on the
Graystone model and $60 on the Lava model. The company anticipates selling at least
twice as many Lava models as Graystone models.
What will be the total profit contribution from Lava surfboards?
A) $ 391.30
B) $ 521.74
C) $ 130.43
D) $ 276.65
Which of the following is true about the value of the power of the test?
A) low value will enable valid conclusions to be made
B) small sample sizes generate a low value of the power of the test
C) low value will help in detecting small differences in sample statistics
D) small sample sizes incur higher costs than large sample sizes
Which of the following mathematical functions, used in predictive analytical models, is
represented by the formula y = ax3 + bx2 + cx + d?
A) exponential functions
B) power functions
C) logarithmic functions
D) polynomial functions
The worldwide sales of cars from 1981-1990 are shown in the table below. Given: α =
0.2 and β = 0.15 (Hint: Use XLMiner)
Identify the value of the mean square error using double exponential smoothing for the
given set of data.
A) 8.10
B) 1.80
C) 91.27
D) 11976.17
A z-score of 1.0 means that ________.
A) the observation is -1.0 standard deviation to the right of the mean
B) the observation is -1.0 standard deviation to the left of the mean
C) the observation has no deviation from the mean
D) the observation is 1.0 standard deviation to the right of the mean
In order to reject the null hypothesis, the F-test statistic must be greater than the_____.
A) p-value
B) variance
C) df
D) F crit
Identify the formula used to calculate the root mean square error over a range of
forecasted values, if the actual value of the time series at time t and the forecast value
for time t are denoted by At and Ft respectively.
A) RMSE =
B) RMSE =
C) RMSE =
D) RMSE =
Pickson Luthiers Corporation makes four models of electric guitars, ScarCT, Dela Mort,
Warax, and Invazen. Each guitar must flow through five departments, assembly,
painting, sound testing, inspection, and packaging. The table below shows the relevant
data. Production rates are shown in units/hour. (ScarCT is assembled elsewhere).
Pickson wants to determine how many guitars to make to maximize monthly profit.
According to the Sensitivity Report, by how much should the unit profit on ScarCT be
increased in order for its production to be feasible?
A) $30
B) $90
C) $60
D) $120
The central limit theorem states that if the population is normally distributed, then the
________.
A) mean of the population can be calculated without using samples
B) standard error of the mean will not vary from the population mean
C) sampling distribution of the mean will vary from sample to sample
D) sampling distribution of the mean will also be normal for any sample size
________ is a measure of the linear association between two variables, X and Y.
A) Kurtosis
B) Proportion
C) Skewness
D) Covariance
A z-score of 1.0 means that ________.
A) the observation is -1.0 standard deviation to the right of the mean
B) the observation is -1.0 standard deviation to the left of the mean
C) the observation has no deviation from the mean
D) the observation is 1.0 standard deviation to the right of the mean
Which of the following is true of an unbiased estimator value?
A) The expected value will align perfectly with the population mean.
B) The expected value will not equal the population’s parameters.
C) The expected value will not be greater than zero.
D) The expected value will equal the population’s parameter.
Explain the implementation of a project-selection model.
What is the probability that profit will be between $2,000 and $2,200?
Give an account of how data is used in predictive models.
Exemplify the k-Nearest Neighbor algorithm of classification.
Explain econometric models used in forecasting with examples.
Gruten Retailers sells Mother’s Day special greeting cards at their store at $6. They
make the cards for a dollar apiece. Most of the cards are sold by Mother’s Day, but the
actual demand is unknown. They have orders for 120 cards. In the past, they have had
sales of at least 100 cards by Mother’s Day. The remaining cards are sold at a 40 percent
discount. Calculate the net profit, if demand, D, is set at 110 units.
Give an account of Excel’s Descriptive Statistics Tool.
Explain the significance of using double moving average and double exponential
smoothing models.