The complexity of a problem increases when the problem belongs to an individual
rather than a group.
A sample is a subset of a population.
If a time series has seasonality but no trend, the most appropriate model used for
forecasting is the Holt-Winters multiplicative model.
When interpreting sensitivity analysis information for changes in model parameters, all
other model parameters are held constant.
As the number of degrees of freedom increases, the t-distribution converges to the
standard normal distribution.
The following extract from a manufacturer’s database shows a sample of 10 suppliers,
their transportation charges, and the estimated and actual total costs of supplying
materials. (Note: Assume a significance level of 0.05 wherever necessary.)
Conduct the appropriate type of one-sample test-statistic to determine whether the
average transportation charge is less than $430. Apply a decision rule using the
observed level of significance and draw a conclusion.
A service level is a constraint that represents the probability that demand can be
satisfied.
In conducting a hypothesis test, what is usually to be proven statistically is identified as
the null hypothesis.
All quadratic optimization models have nonlinear constraints.
AND(condition 1, condition 2’¦) is a logical function that returns TRUE if all conditions
are true and FALSE if not.
Two different sets of data can never have the same z-scores.
For nonlinear models, the Lagrange multipliers are only approximate indicators of
shadow prices.
Logistic regression is different from discriminant analysis in that logistic regression
________.
A) does not predict the weights
B) sets observation into predefined classes
C) does not depend on assumptions
D) depends on assumptions such as normalization of independent variables
Below is the spreadsheet for a project selection model.
Answer the following question(s) using a model with uncertainty on project selection.
Assume that the distribution on each project return is LogNormal. Use 10,000 trials and
1 for random seed for the simulation.
What is the value of standard deviation obtained from the simulation results? [Hint:
Choose the approximate value.]
A) $ 89,236
B) $ 180,278
C) $ 236,745
D) $ 107,892
Which of the following Lookup functions returns the relative position of an item in an
array that equals a specified value in a specified order?
A) HLOOKUP(lookup_value, table_array, row_index_num)
B) MATCH(lookup_value, lookup_array, match_type)
C) INDEX(array, row_num, col_num)
D) VLOOKUP(lookup_value, table_array, col_index_num)
Below is the spreadsheet for demand prediction of a company that sells chocolates.
If, in the spreadsheet, cells B9 and B10 were empty, which of the following formulas
should be entered in B8 so that the formula can be dragged to B9 and B10 to obtain
their correct values?
A) B4-B5*A8
B) B4-B5*$A8
C) $B4-B5*$A8
D) $B$4-$B$5*$A8
15 students were asked to choose between the broad categories of Arts, Science, and
Math as their preferred area of study.
What is the probability that a respondent prefers Science given that the respondent is
female?
A) 1/15
B) 1/7
C) 7/15
D) 4/7
The Excel function of
A) SUM(range)
B) COUNT(range)
C) MAX(range)
D) COUNTIF(range, criteri A)
Which of the following denotes the power of the test?
A) α
B) 1 – β
C) β
D) 1 – α
A company makes standard 130- inch-wide rolls of thin sheet metal and slits them into
smaller rolls to meet customer orders for widths of 10, 14, and 25 inches. Suppose that
the company has proposed the following cutting patterns:
Demands for the coming week are 950 10-inch rolls, 725 14-inch roles, and 640
25-inch rolls. Develop a model using the Analytic Solver Platform that will determine
how many 130-inch rolls to cut into each of the six patterns in order to meet demand
and minimize scrap.
What is the total scrap produced?
A) 1,389
B) 1,390
C) 1,427
D) 1,445
Below is the spreadsheet for a portfolio allocation model.
Answer the following question(s) using a model with uncertainty on type of investment
return. Assume that the distributions of life insurance annual return is uniform with
minimum 4% and maximum 6%, bond mutual funds annual return is normal with mean
7% and standard deviation 1%, stock mutual funds annual return is lognormal with
mean 11% and standard deviation 4%. Use 10,000 trials and 1 for random seed for the
simulation.
What is the mean absolute deviation obtained from the simulation results for
maximizing the total expected return? [Hint: Choose the approximate value.]
A) $ 887.25
B) $ 735.86
C) $ 651.97
D) $ 967.36
Shirley Templeton is a real estate agent for Paralol Realty. Shirley is given the
responsibility to manage potential customers for 5 of the Realty’s bungalows. These 5
bungalows are situated in close proximity. In order to make traveling easier, Shirley
decides to move to a location closer to the 5 bungalows. The table below gives the
location (X and Y coordinates) of the 5 bungalows along with the number of trips she
would have to make to each bungalow. Create a nonlinear model based on the data
given in the table below noting that the objective is to reduce the weighted distance
between Shirley’s accommodation and the 5 bungalows.
According to the model, what is the distance between Shirley’s new accommodation
and Bungalow 2?
A) 91.16
B) 23.12
C) 98.21
D) 14.53
The Excel 2010 function ________ computes the kth percentile of data in the range
specified in the array field, where k is in the range 0 to 1, inclusive.
A) PERCENTILE.INC(array, k)
B) PERCENTILE(array + k)
C) PERCENTILE.IF(array, k)
D) PERCENTILE(SUM(array), k)
The payoff table given below lists four mortgage options:
The probability of rates rising is 0.6, rates stable is 0.3, and rates falling is 0.1.
What is the expected payoff for the 1-year ARM?
A) $ 53,082.00
B) $ 16,951.00
C) $ 56,938.00
D) $ 18,979.30
The ________ algorithm is a classification scheme that attempts to find records in a
database that are similar to one we wish to classify.
A) linear regression
B) logistic regression
C) k-Nearest Neighbors
D) discriminant analysis
Qualis Investments is a private limited business that manages personal financial
portfolios. The company manages six mutual funds and has a client that has acquired
$750,000 from an inheritance. Characteristics of the funds are given in the table below.
The company recommends that no more than $300,000 be invested in any individual
fund, and that at least $80,000 be invested in each of the mid-cap stock and mortgage
fund. The total amount invested in the low-priced and multinational funds are at least
35% of the total investment. The client would like an average return of at least 6%.
Assume that X1- X6 represent the dollar amounts invested in funds 1 through 6,
respectively.
Which of the following is the constraint for the weighted return?
A) X1 + X2 + X3 + X4 + X5 + X6 = 750,000
B) 7.23 X1 + 8.42 X2 + 6.66 .X3 + 2.72 X4 + 8.89 X5 + 3.5 X6 ≥ 6.00
C) ( 7.23 X1 + 8.42 X2 + 6.66 .X3 + 2.72 X4 + 8.89 X5 + 3.5 X6 ) / 750,000 ≥ 6.00
D) ( 7.23 X1 + 8.42 X2 + 6.66 .X3 + 2.72 X4 + 8.89 X5 + 3.5 X6 ) / 750,000
Which of the following is true from the equation:∑, where is the mean of the sample?
A) The sum of the deviations above the mean are the same as the sum of the deviations
below the mean
B) Half the data lie above the mean of the values
C) The specific set of values does not have any outliers affecting the mean
D) Half the data lie below the mean of the values
Below is a spreadsheet for a hotel overbooking model.
Answer the following question(s) using multiple parameterized simulations. The range
of historical customer demand is 400-430. Assume a uniform integer distribution for
customer demand, and run parameterized simulations for different reservation limits.
Use 5,000 trials and 1 for random seed.
If 425 reservations are made, and there are 20 cancellations, what is the mean net
revenue generated by the simulation?
A) $ 58,000
B) $ 58,500
C) $ 59,000
D) $58,995
In the spreadsheet below, there is data on the price, cost, demand, and quantity
produced for an item. There are also different “what if” values that can help a manager
to calculate costs and revenue with variability in demand.
Which of the following is the Excel formula to determine the number of units sold?
A) =B8
B) =MIN(0,B8,B9)
C) =MIN(B8,B9)
D) =MAX(0,B8,B9)
Jonathan Reese is considering three stocks in which to invest with a fixed budget. The
table below provides information on Jonathan’s expected returns for each stock. The
table also provides information, collected from market researchers, on the
variance-covariance matrix of the individual stocks. He expects a total return of at least
10%.
Develop a quadratic optimization model to find the optimal allocation of the budget to
each stock, and variance calculations for squared terms and cross-products based on the
variance-covariance matrix.
According to the model, what is the squared term value for Stock 2 variance?
A) 0.00236
B) -0.00031
C) 0.00080
D) 0.00430
Following is an extract from the Cost per Order Database of Grogtes LLC.
Which of the following does the second quartile of the costs per order indicate?
A) 2% of the costs per order are less than or equal to $114.84.
B) 20% of the costs per order are less than or equal to $1,200.12.
C) 5% of the costs per order are less than or equal to $229.36.
D) 50% of the costs per order are less than or equal to $286.16.
Prescriptive decision models help:
A) make predictions of how demand is influenced by price.
B) make trade-offs between greater rewards and risks of potential losses.
C) decision makers identify the best solution to decision problems.
D) describe relationships and influence of various elements in the model.
Sheila joined Simsin Tradings at the age of 36 with a starting salary of $ 75,000. She
expects a salary increase of 5 percent every year. Her retirement plan requires her to
pay 9 percent of her salary, while the company matches it at 32 percent. She expects an
annual return of 7 percent on her retirement portfolio. Using a predictive model for
Sheila’s first five years, calculate the following, assuming that the salary increases at the
same rate every year, and the return of interest does not change.
What will be the amount of employee contribution to retirement plan when Sheila has
reached the age of 38?
A) $7,441.88
B) $7,813.97
C) $24,450
D) $2381.40
Which option in Risk Solver Platform allows you to choose the number of times that
random values can be generated for the uncertain cells in the model?
A) Trials per Simulation
B) Simulations to Run
C) Only Run
D) Sim.Random Seed
Qualis Investments is a private limited business that manages personal financial
portfolios. The company manages six mutual funds and has a client that has acquired
$750,000 from an inheritance. Characteristics of the funds are given in the table below.
The company recommends that no more than $300,000 be invested in any individual
fund, and that at least $80,000 be invested in each of the mid-cap stock and mortgage
fund. The total amount invested in the low-priced and multinational funds are at least
35% of the total investment. The client would like an average return of at least 6%.
Assume that X1- X6 represent the dollar amounts invested in funds 1 through 6,
respectively.
Which of the following is the constraint for investment in low-priced and multinational
funds?
A) X1 + X2 ≥ 0.35(750,000)
B) ≥ 0.35(750,000)
C) X1 + X2 + X3 + X4 + X5 + X6 ≥ 0.35(750,000)
D) ≥ 0.35
Following is an extract from a firm’s database detailing the number of hours spent on
the job by employees and their corresponding pay. (Note: Assume a level of
significance of 0.05 wherever necessary.)
Interpret residual output.
Following is the purchase order database of ‘The Chef Says So’, a restaurant in New
York, over the last quarter (April-June).
Describe how to and construct a line chart exhibiting the purchase order of ceramic
plates over the three months.
Pickson Luthiers Corporation is studying where to locate a phone charging point on the
factory floor. The locations of five production cells are expressed as X– and
Y-coordinates on a rectangular grid of the factory layout. The daily demand for the
charging point (measured as the number of trips to the charging point) at each
production cell is also known. Because of the nature of the equipment layout in the
factory and for safety reasons, workers must travel along marked horizontal and vertical
aisles to access the charger. Thus, the distance from a cell to the charger is measured as
rectilinear distance.
The table below provides the relevant information.
The optimal location should minimize the total weighted distance between the charging
point and all production cells, where the weights are the daily number of trips to the
phone charging point.
From the above table, provide the objective function for the best location of the
charging point. What kind of solution technique from Solver can be used to make the
optimization model based on the data?
Briefly explain the assumptions on which the statistical hypothesis tests associated with
regression analysis are predicated.
P(Q|P) = P(P or Q) – P(Q)
How does Excel distinguish between vertical and horizontal bar charts?
What is a confidence interval in sampling?