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 standard deviation obtained from the simulation results of the net present
value? [Hint: Choose the approximate value.]
A) $204,868,924
B) $162,135,408
C) $182,992,245
D) $138,134,040
Monte Carlo sampling differs from Latin Hypercube sampling in that the Monte Carlo
sampling ______.
A) results in a more even distribution of output values
B) uses the entire range of the distribution in a more consistent manner
C) selects random variates independently over the entire range of possible values of the
distribution
D) uses an uncertain variable whose probability distribution is divided into intervals of
equal probability
Below is the spreadsheet for a project selection model:
What is the return obtained from Project 3?
A) $ 200,000
B) $ 125,000
C) $ 275,000
D) $ 225,000
The Riviera Transport Company (RTC) produces car accessories at two plants: Dallas
and Atlanta. They ship them to major distribution centers in Houston, San Jose,
Jacksonville, and Memphis. The accounting, production, and marketing departments
have provided the information in the table below, which shows the unit cost of shipping
between any plant and distribution center, plant capacities over the next planning
period, and distribution center demands. RTC’s supply chain manager faces the problem
of determining how much to ship between each plant and distribution center to
minimize the total transportation cost, not exceed available capacity, and meet customer
demand.
Assume Xij = amount shipped from plant i to distribution center j, where i = 1
represents Dallas, i = 2 represents Atlanta, j = 1 represents Houston, and so on.
According to the transportation model, which of the following is the amount shipped
from Dallas to Houston?
A) 0
B) 175
C) 1,180
D) 750
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 linear optimization model, what is the net profit per unit on Dela
Mort?
A) $205,200
B) $108
C) $680
D) $90
The table provided below gives the sales details of the number of android smart phones
at an electronic retail store for the past 6 weeks. The time series appears to be relatively
stable, without trend, seasonal, or cyclical effects. (Hint: Optimize α value in 0.1
increments)
Calculate the value of the mean absolute percentage error for the given data.
A) 20.90
B) 16.60
C) 21.72
D) 29.97
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)
Using the double exponential smoothing, find the value of the root mean square error
for the given data.
A) 8.10
B) 91.27
C) 11976.17
D) 109.44
Which of the following is true of the lift value in association rule?
A) Its strength is directly proportional to the strength of the association rule.
B) It cannot have a value that is more than 1 to be considered a good minimum.
C) It provides information on the increase of the antecedent given the consequent.
D) It does not require the expected confidence to be calculated.
Below is a payoff table that lists four mortgage options:
The probability of rates rising is 0.6, rates stable is 0.3, and rates falling is 0.1. Answer
the following questions by creating a decision tree.
Which of the following is considered the best expected value decision?
A) 1-year ARM
B) 3-year ARM
C) 5-year ARM
D) 30-year fixed
Which of the following is a valid one-sample hypothesis test?
A) H0: population parameter ≠constant vs. H1: population parameter = constant
B) H0: population parameter > constant vs. H1: population parameter ≤ constant
C) H0: population parameter < constant vs. H1: population parameter ≥ constant
D) H0: population parameter = constant vs. H1: population parameter ≠constant
The Ransin Sports Company has noted that the size of individual customer orders is
normally distributed with a mean of $112 and a standard deviation of $9. Which of the
following is the answer for the probability that the next individual who buys a product
will make a purchase of more than $116?
A) 71%
B) 48%
C) 33%
D) 42%
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential
new drug. The total R&D costs are estimated to reach around $875,000,000 with
clinical trials mounting to $145,000,000. The current market size is estimated to be
around 3,000,000 and is expected to grow at 4 percent every year. The market share
Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25
percent each year for the next 4 years. A monthly prescription is anticipated to generate
revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is
assumed.
Calculate cumulative net profit at the fourth year.
A) $1,073,538,462
B) $3,189,634,800
C) $1,312,041,240
D) $1,494,838,800
Which of the following is the test statistic for a one-sample test for mean when the
population standard deviation is unknown?
A) t =
B) z =
C) z =
D) t =
________ means that the variation about the regression line is constant for all values of
the independent variable.
A) Autocorrelation
B) Normality of errors
C) Homoscedasticity
D) Linearity
Below is a payoff table that lists four mortgage options:
The probability of rates rising is 0.6, rates stable is 0.3, and rates falling is 0.1. Answer
the following questions by creating a decision tree.
Which of the following is considered the worst expected value decision?
A) 1-year ARM
B) 3-year ARM
C) 5-year ARM
D) 30-year fixed
In a lower one -tailed hypothesis test, chosen level of significance = 0.10, sample size =
55, and t-test statistic = -1.76.
What is the observed level of significance?
A) 0.4605
B) 0.4191
C) 0.0379
D) 0.0420
The Atlas Movies Theater is planning to reprice their ticket rates to maximize revenues.
They have three classes of tickets: Classic, Silver, and Gold. The table below provides
information on the average ticket sales, revenue and price elasticity on demand. They
have a total seating capacity of 300. The table also provides the price range within
which they plan to reduce their ticket rates.
According to the nonlinear model, which of the following is the projected sales figure
for Classic tickets at the new price?
A) 32
B) 90
C) 175
D) 202
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 is the Allowable Decrease in the fabrication hours used?
A) 26.84
B) 16.67
C) 8.33
D) 38.46
Which of the following is true about multiple linear regression?
A) It is a linear regression model with more than one dependent variable.
B) The regression coefficients are called fractional regression coefficients.
C) It uses least squares to estimate the intercept and slope coefficients.
D) The ANOVA tests for the significance of each variable separately.
Which of the following ways would 102 53/ 100 – 73 be represented in an Excel
spreadsheet?
A) 10(2) * 5(3) / 100 ^ 73
B) 10(2) ^ 5(3) / 100 – 73
C) 10^2 * 5^3 / 100 – 73
D) 10*2 ^ 5*3 / 100 – 73
Use the table below to answer the following question(s) using the standard Solver.
Below is the spreadsheet for a plant location model:
What is the total cost incurred?
A) $ 27,297
B) $ 35,233
C) $ 42,675
D) $ 47,864
To construct a frequency distribution for categorical data, the
A) observations that appear in each category must be summed up.
B) number of observations that appear in each category must be counted.
C) observations in each category must be multiplied by observations in the
corresponding category.
D) number of observations in each category must be divided by the total number of
observations in all categories.
To find the average of the total cost of orders from Rex Technologies, what Excel
formula should be used in A12?
A) =AVERAGE(C4:C10)
B) =AVERAGE(C4:C7)
C) =AVERAGE(E4:E7)
D) =AVERAGE(E4:E10)
Below is the spreadsheet for a newsvendor model.
Answer the following question(s) using multiple parameterized simulations. The range
for the historical demand is 40-51. Assume a uniform integer distribution for demand,
and run 12 simulations for different purchase quantities. Use 5,000 trials and 1 for
random seed.
Which of the following is the best purchase quantity to maximize the expected profit if
demand is 42?
A) 42
B) 45
C) 48
D) 51