Below is the spreadsheet for an economic order quantity model.
Assume that the distribution of demand is normal with a mean of 20,000 and standard
deviation of 2,000.
What is the reorder point required to attain a 95% service level?
A) 460.0
B) 750.5
C) 571.0
D) 640.5
Which of the following is the rectilinear distance between the points A(13, and
B(10,12)?
A) 4
B) 25
C) 6
D) 10
Coppell Services contracts with outsourcing partners to handle various customer service
functions. Based on a study of call volumes provided by one of the firm’s partners, the
minimum number of staff needed for each hour of the day is as follows:
Mr. Coppell hires 6 permanent employees and wants to staff the remaining
requirements using part-time employees who work 4-hour shifts (four consecutive
hours starting as early as 8 A.M. or as late as 1 P.M.).
How many excess employees are present in the 4-5 time slot?
A) 0
B) 2
C) 4
D) 6
Which of the following is true of midspread?
A) It is an example of a measure of location.
B) It is calculated by finding the difference between the highest and lowest values in the
data set. C) It is affected by extreme values.
D) It is calculated using only the middle 50% of the data.
The data mining approach called ________ involves the developing of analytic models
to describe the relationship between metrics that drive business performance like
profitability, customer satisfaction, or employee satisfaction.
A) association
B) reduction
C) cause-and-effect modeling
D) classification
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.
Below is the profit model spreadsheet for the Lazarus Shoe Company producing their
latest model of shoes for the month of January.
Calculate the total profit.
A) $600,000
B) $1,436,000
C) $836,000
D) $1,786,000
A positiveNPVmeansthattheinvestmentwillprovideaddedvaluebecausetheprojected
returnexceedsthe .
A) modified internal rate of return
B) discount rate
C) accounting rate of return
D) adjusted present value
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 describes the constraint on the mid-cap fund?
A) X3 ≥ 0.35(750,000)
B) X3 ≥ 80,000
C) X3 ≥ 0.35(80,000)
D) X3 ≤ 670,000
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.
When using the t-statistic in multiple regression to determine if a variable should be
removed:
A) R2 will increase if the variable is removed.
B) if |t| > 1, the standard error will decrease.
C) a large number of independent variables is convenient.
D) if |t| < 1, the standard error will increase.
Use the table below to answer the following question(s).
The historical data of Velvetta Inc., a healthcare products manufacturer, have shown
that in a production process for filling bottles of shampoo, variance in the volume is
constant; however, clogs in the filling machine often affect the mean volume. The
historical standard deviation is 5 milliliters. In filling 250-milliliter bottles, a sample of
20 found a meanvolume of 242 milliliters.
From the table above, determine the cumulative probability for z at a 95% confidence
level.
A) 0.975
B) 0.950
C) 1
D) 0.987
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 the projected sales for the first year.
A) 273,000
B) 210,000
C) 378,000,000
D) 268,230
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 are the chances that the product will show a cumulative net profit in the fourth
year?
A) approximately 25%
B) approximately 18%
C) approximately 11%
D) approximately 32%
The Atlas Movies Theater has repriced 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 new price for the three
classes obtained using Solver.
Assume the distributions of elasticities for three classes of tickets are uniform with
minimum and maximum values equal to 75% and 125% of their estimated values,
respectively. Under this assumption, use Monte Carlo simulation to see what happens to
the prediction of tickets sold. The model is simulated for 10,000 trials.
What is the value of mean obtained from the simulation results?
A) 450
B) 300
C) 400
D) 250
Which of the following is true about the Random Number Generation tool?
A) The Random Number Generation dialog presents only three distributions to choose
from: beta, lognormal, and triangular.
B) The default distribution in this tool is the continuous distribution.
C) Repeating the process generates a new set of sample values.
D) Pressing the recalculation (F9) key is an easy way to change the values generated.
Sendstars is a package delivering company that recently made a study on its customer
retention and service renewal metrics. They found that most customers defected from
using Sendstars’ services due to customer dissatisfaction stemming from delivery
personnel being rude or ill-mannered. To curb this issue, Sendstars gave special training
to its employees in customer service. Which of the following data mining approaches
did Sendstars employ when they decided to train their employees in customer care
based on the study?
A) association
B) cause-and-effect modeling
C) classification
D) reduction
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 total profit
generated?
A) $ 489.13
B) $ 521.74
C) $ 423.91
D) $ 554.35
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
Standard residuals:
A) help detect outliers that may bias the results of a regression analysis.
B) cause differences in the regression equation by changing the slope and intercept.
C) point out the ranges for the population intercept and slope at a 95% confidence level.
D) provide information for testing hypothesis associated with the intercept and slope.
Use the table below to answer the following question(s).
The historical data of Velvetta Inc., a healthcare products manufacturer, have shown
that in a production process for filling bottles of shampoo, variance in the volume is
constant; however, clogs in the filling machine often affect the mean volume. The
historical standard deviation is 5 milliliters. In filling 250-milliliter bottles, a sample of
20 found a meanvolume of 242 milliliters.
Based on the data in the table above, calculate the margin of error at 95% confidence
interval.
A) 1.84
B) 2.19
C) 2.51
D) 1.96
Coppell Services contracts with outsourcing partners to handle various customer service
functions. Based on a study of call volumes provided by one of the firm’s partners, the
minimum number of staff needed for each hour of the day is as follows:
Mr. Coppell hires 6 permanent employees and wants to staff the remaining
requirements using part-time employees who work 4-hour shifts (four consecutive
hours starting as early as 8 A.M. or as late as 1 P.M.).
Which of the following best defines a binary variable?
A) It is a general integer variable that is restricted to being between -1 and 1.
B) It is a general integer variable that is restricted to being a multiple of 2.
C) It is a general integer variable that is restricted to being between 0 and 1.
D) It is a general integer variable that is restricted to being greater than 2.
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.
From the “what if” values, calculate the total profit when the demand is 20,000.
A) $825,000
B) $1,000,000
C) $1,100,000
D) ($925,000)
Sujito Electronix makes headphones for $22 and sells them for $32. Sujito has sold at
least 50 headphones on average per week in the past, though the actual demand is
unknown. Sujito has also often run short of supply in the past. After three months of
release, the headphones are sold at 40 percent discount. The spreadsheet below shows
Sujito’s sales and demand for the headphones. We take demand at 51, and quantity
produced at 55.
Which of the following is the value for quantity sold?
A) 51
B) 50
C) 4
D) 55
Below is the data collected from a manufacturing process for a part whose dimensions
are specified as 4.00 0.1 centimeters. Calculate the process capability index within three
standard deviations of the mean.
Manufacturing Measurements
4.78 3.99 5.02
4.23 4.57 4.44
5.18
Why do predictive decision models incorporate uncertainty?
Describe the method of calculating the net present value (NPV) in Excel.
How are objects clustered in agglomerative hierarchical clustering?
The table below is the data set of the Shiller Real Home Price Index for the years
1946-1956.
Setting k = 3, determine the value of mean absolute percentage of error.
Which of the following is true of the parameters of a beta distribution function?
C) The parameters of the distribution function, α and β, can be negative.
D) The values of the parameters do not affect the skewness of the distribution.
E) If either parameter is 1.0 and the other is lesser than 1.0, the distribution takes an “L”
shape.
F) If the parameter β exceeds the other parameter α, the distribution is positively
skewed.
To meet consumer demand, Nib ‘N’ Ink must produce 800 gel-ink refills. Should the
company produce them in-house or outsource them from the supplier? (Hint: Use the
mathematical descriptive model).
The table below shows the number of goals scored by the Huntington Soccer Club in
their league for the past 12 years. Calculate the standard error of the mean of the data
given that the variance of the data is 50.45
Keychain Publishing is planning to release two books, simultaneously, by the same
author. One is a fictional book, while the other is the author’s autobiography. The details
of its cost, production, and demand are given in the table below.
Keychain Publishing has $150,000 available to bind books and advertise them with an
objective of maximizing profit contribution. Provide the objective function for
maximizing profits, along with its constraints.
Explain econometric models used in forecasting with examples.