Bolton Computer’s
Laptop
Pricing Decision
Inputs
Price
Model
Sales -3.85 price + 1150.9
Outputs
Total revenue sales price
Bolton Computers are planning to release a new line of low-end laptops. Using Excel’s
Solver, develop a nonlinear model to calculate the optimal price for the laptops, given
that sales = -3.85 price + 1150.9.
A) 342.40
B) 380.90
C) 719.70
D) 149.47
The ________ measures the degree of asymmetry of observations around the mean. A)
coefficient of variation
B) return to risk factor
C) coefficient of skewness D) coefficient of kurtosis
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
Cerebro Manufacturing produces four types of structural support fittings-plugs, rails,
rivets, and clips-which are machined on two CNC machining centers. The machining
centers have a capacity of 250,000 minutes per year. The gross margin per unit and
machining requirements are shown in the spreadsheet below.
Which of the following options is used if Solver gives an error message that linearity is
not satisfied?
A) Ignore Integer Constraints
B) Show Iteration Results
C) Use Automatic Scaling
D) Use Multistart
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 upper cutoff in thousands of dollars if the likelihood is 75%?
A) approximately 46
B) approximately 28
C) approximately 32
D) approximately 59
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 expected value margin obtained from the simulation results of the net
present value?
A) 0.864
B) -0.726
C) 0.343
D) -0.467
The table below provides the sales data for JD Inc. for the year 1998. Given: α = 0.2,
β = 0.15, and γ = 0.05 (Hint: Use an additive Holt-Winters model.)
Umbrella Sales of JD Inc.
Calculate the value of the mean square error using an appropriate Holt-Winters trend
model for the given data.
A) 8.10
B) 346.26
C) 140942.78
D) 7.62
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 coefficient of variation obtained from the simulation results for maximizing
the total expected return? [Hint: Choose the approximate value.]
A) 1.2451
B) 0.4865
C) 0.8917
D) 0.1284
The spreadsheet below shows the net income model for a company that sells shoes.
Which of the following formulas would be used to calculate earnings before taxes?
A) =B15-B16+B6
B) =B15-B5
C) =B15-B16
D) =B17-B10
Following is an extract from the Cost per Order Database of Grogtes LLC.
Which of the following does the 38th percentile of the costs per order indicate?
A) 62% of the costs per order are more than or equal to $190.40.
B) 38% of the costs per order are less than or equal to $189.20.
C) 62% of the costs per order are less than or equal to $484.16.
D) 38% of the costs per order are more than or equal to $501.80.
When using logistic regression, where p being the probability that the dependent
variable Y = 1, X1, X2 …, Xk are the independent variables, and β0, β1, β2 …, βk are
unknown regression coefficients, ________ is called the odds of belonging to category
1(Y = 1).
A) p(β0 + β1X1 + β2X2 + …+ βkXk)
B)
C)
D)
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.
According to the model, which of the following is the weighted distance between the
phone charger and Paint cell?
A) 36.00
B) 12.00
C) 24.00
D) 0
In the cause-and-effect modeling, internal metrics, such as employee satisfaction,
productivity, and turnover are considered to be ________ measures.
A) logit
B) life
C) leading
D) lagging
If the actual value of a time series at time t and the forecast value for time t is denoted
by At and Ft respectively, then the formula for the mean absolute deviation over a range
of forecasted values is ________.
A) MAD =
B) MAD =
C) MAD =
D) MAD =
In finance, the ________ is the ratio of a fund’s excess returns (annualized total returns
minus Treasury bill returns) to its standard deviation.
A) field ratio
B) Sortino ratio
C) Calmar ratio
D) Sharpe ratio
A ________ is a description of the approach that is used to obtain samples from a
population prior to any data collection activity.
A) population frame
B) sampling weight
C) sampling plan
D) probability interval
In statistical notation, the elements of a data set are typically labeled as ________.
A) summation operators
B) letters in capitals
C) Greek letters
D) subscripted 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 mean absolute deviation obtained from the simulation results? [Hint:
Choose the approximate value.]
A) $ 143,767
B) $ 104,786
C) $ 188,995
D) $ 232,673
Below is a payoff table that lists four mortgage options:
What is the average payoff for the 5-year ARM?
A) $ 49,514
B) $ 52,015
C) $ 53,395
D) $ 51,641
Fiberia Accessories, a clothing retailer, is planning to introduce a new line of sweaters
as part of the winter collection for $65 with an inventory of 1500. The main selling
season is 60 days between November and December. The store then sells the remaining
units in a clearance sale at 65 percent discount. Out of the 60 main retail days, Fiberia
sells the sweaters at full retail price for only 45 days, while giving a discount of 25
percent for the remaining 15 days. The demand functions a, and b are given as 79.5 and
1.1 respectively.
Calculate the revenue for the clearance sales period.
A) $18,921.09
B) $23,400
C) $48,871.88
D) $17,105.16
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.
With reference to the trend chart, which year shows the highest mean net cumulative
profit?
A) Year 1
B) Year 2
C) Year 4
D) Year 5
If the Euclidean distance were to be represented in a right triangle, which of the
following would be considered the distance between two objects of a cluster?
A) the hypotenuse
B) the small leg
C) the long leg
D) the average of the sum of both the legs