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.
If the unit profit on Graystone surfboards is increased by $10, what is the Allowable
Increase for Lava surfboards?
A) 30.00
B) 85.00
C) 16.67
D) 58.75
Troista Mobile Accessories sells mobile apps on their Web site. If a customer spends on
average, $12 per visit and visits the Web site 20 times each year, what is the average
nondiscounted gross profit during a customer’s lifetime? Given that Troista makes a
margin of 60 percent on the average bill, with 25 percent of customers not returning
each year.
A) $30
B) $75
C) $360
D) $576
Below is the spreadsheet for demand prediction of a company that sells chocolates.
If a dollar sign is used before the column label B4 ($B4), how will the formula at B10
be represented in C11 using absolute addressing?
A) $B5-C6*B11
B) $C5-C6*A10
C) $B4-C5*B11
D) $A5-C6*B11
The weights for determining the discriminant functions are determined by ________.
A) assessing the number of outliers that are present in each group
B) calculating the distance between the two closest observations in each group
C) measuring the closeness between predictor values of each set
D) maximizing the between-group variance relative to the within-group variance
Following is an extract from the Employee Payroll Database of HFR Informatics Inc.
What is the relative frequency of Female employees?
A) 0.65
B) 0.75
C) 0.25
D) 0.35
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. If a soccer
team of 11 players were to make the next batch of orders, what is the probability that
the mean purchase would exceed $116?
A) 11%
B) 3%
C) 33%
D) 7%
Belowisaspreadsheetofpurchaseordersfor acomputerhardwareretailer.
To find the number of orders with A/P terms less than 25 months, what Excel formula
should be used in A12?
A) =COUNTIF(F4:F10,”<25″)
B) =COUNT(F4:F10,25)
C) =AVERAGE(F4:F10,”<25″)
D) =COUNTIF(F4:F10,F5)
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 expected variance of the resulting portfolio?
A) 0.014
B) 0.010
C) 0.009
D) 0.012
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.
What is the value of mean profit generated by the simulation if the purchase quantity is
equal to 45?
A) $ 234
B) $ 255
C) $ 216
D) $ 222.
Below is the table showing rate of shoes sold per day and the highest-priced shoe sold
that day for a one-week period. The rate of shoes sold per day (X) and the price of the
shoes (Y).
Use Excel to calculate the covariance between variables X and Y.
A) 2.67
B) 0.02
C) 16.71
D) 7.04
Below is a decision tree illustrating the R&D process for a new drug.
Let us assume that if market is large, payoff is lognormally distributed with a mean of
$4,900 million and a standard deviation of $1,000 million; if market is medium, payoff
is lognormally distributed with a mean of $2,500 million and a standard deviation of
$500 million; and if market is small, payoff is normally distributed with a mean of
$1,800 million and standard deviation of $200 million. Let us also assume that the cost
of clinical trials is uncertain and estimates are modeled with a triangular distribution
with a minimum of -$ 700 million, a most likely value of – $550 million, and a
maximum of -$500 million. Use 10,000 trials and a random seed of 1.
What is the mean absolute deviation obtained from the simulation results? [Hint:
Choose the approximate value.]
A) $ 119.0
B) $ 116.1
C) $ 105.7
D) $ 94.0
In a k-Nearest Neighbors algorithm, similarity of records is based on the ________.
A) closeness of a record to numerical predictors in the other records
B) sum of the squares of the distance between the numerical predictors
C) set of linear functions of predictors called discriminant functions
D) nearness of a record to its own observations
Which of the following is true about multicollinearity?
A) The effect of a dependent variable on another becomes difficult to isolate.
B) Regression coefficients become clearer and are easier to interpret.
C) P-values reduce significantly leading to rejection of null hypothesis.
D) It is best measured using the statistic variance inflation factor (VIF).
Consider the spreadsheet for a Newsvendor Model.
What is the value of standard deviation?
A) $12.50
B) $10.99
C) $15.86
D) $20.25
Following is an extract from the Employee Payroll Database of HFR Informatics Inc.
What is the cumulative relative frequency of employees on a ‘A to D’ pay scale?
A) 1.00
B) 0.80
C) 0.30
D) 0.60
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.
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.
Calculate the employer contribution in Sheila’s fourth year at Simsin.
A) $546.98
B) $703.26
C) $2,500.47
D) $2,160
Which of the following denotes the power of the test?
A) α
B) 1 – β
C) β
D) 1 – α
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.
What is the number of reservations that will generate the least revenue?
A) 400
B) 410
C) 420
D) 430
The confidence coefficient is denoted by:
A) α
B) 1 – β
C) β
D) 1 – α
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 weighted distance between Shirley’s new
accommodation and Bungalow 3?
A) 3152.08
B) 1529.39
C) 346.77
D) 250.78