A scatter diagram of sales versus production is labeled with sales on the Y-axis and
production on the X-axis.
There are two general types of causes of variations in manufacturing and service
processes: chance and assignable causes.
A frequency distribution groups data into classes showing the number of observations
in each class.
A typical seasonal index of 103.7 for January indicates that sales for January are below
the annual average.
A box plot graphically shows the 10th and 90th percentiles.
Descriptive statistics are used to find out something about a population based on a
sample.
The central limit theorem allows us to use a z-statistic to compute probabilities for the
sampling distribution of the sample mean.
If we are testing for the difference between two population means, it is assumed that the
sample observations from one population are independent of the sample observations
from the other population.
According to Chebyshev’s theorem, 75% of the observations lie within plus and minus
2.00 average mean deviations.
We can apply parametric tests, such as the t test, to ordinal or ranked level of
measurement.
The Wilcoxon signed-rank test of differences requires that the data be at least ordinal
scaled and that the two samples be related.
When computing probabilities for the sampling distribution of the sample mean, the
z-statistic is computed as .
An expected monetary value can only be greater than or equal to zero.
According to the Empirical rule, about 95% of the observations lie within plus and
minus 2.00 standard deviations.
If we are testing for the difference between two population means and assume that the
two populations have equal and unknown standard deviations, the degrees of freedom
are computed as (n1)(n2) – 1.
Sensitivity analysis examines the effects that changes in the probabilities for the states
of nature have on the expected values of the alternatives or acts, and the corresponding
decisions.
For the exponential distribution, the mean and standard deviation are equal.
The variance of the chi-square distribution is equal to one.
David’s gasoline station offers 4 cents off per gallon if the customer pays in cash and
does not use a credit card. Past evidence indicates that 40% of all customers pay in
cash. During a one-hour period, 15 customers buy gasoline at this station. What is the
probability that all 15 pay in cash?
A. 0.0
B. 0.1
C. 0.9
D. 1.0
A study of interior designers’ opinions with respect to the most desirable primary color
for executive offices showed the following:
What is the probability that a designer does not prefer blue?
A. 1.0000
B. 0.9075
C. 0.8850
D. 0.7725
The weekly incomes of a large group of executives are normally distributed with a
mean of $2,000 and a standard deviation of $100. What is the z-score for an income of
$2,100?
A. 1.00
B. 2.00
C. 1.683
D. -0.90
The Simple Index P (simple price index) can be calculated by ______________.
A. dividing a base-period price by a selected period price and multiplying the result by
100
B. dividing a given period price by a base-period price and dividing the result by 100
C. dividing a given period price by a base-period price and multiplying the result by
100
D. calculating the simple average of the price relatives
What is an important similarity between the uniform and normal probability
distributions?
A. The mean, median, and mode are all equal.
B. The mean and median are equal.
C. They are negatively skewed.
Random samples of four items are selected from a manufacturing process at regular
intervals, and a certain quality characteristic is measured. After 25 samples, ΣX =
15,350 and ΣR = 411.4.
To construct a mean chart, what is the value for the center line?
A. 15,350
B. 614
C. 411.4
D. 3837.5
It is claimed that in a bushel of peaches, less than 10% are defective. A sample of 400
peaches is examined and 50 are found to be defective. What is the null hypothesis?
A. H0: π ≠0.10
B. H0: π ≥ 0.10
C. H0: π ≤ 0.10
D. H0: π < 0.10
Given the following ANOVA table for three treatments each with six observations:
What is the treatment mean square?
A. 71.2
B. 71.4
C. 558
D. 534
A sales manager for an advertising agency believes that there is a relationship between
the number of contacts that a salesperson makes and the amount of sales dollars earned.
A regression ANOVA shows the following results:
What is the value of the coefficient of determination?
A. -0.9513
B. 0.9754
C. 0.6319
D. 0.9513
A recent study of the relationship between social activity and education for a sample of
corporate executives showed the following results.
Using 0.05 as the significance level, what is the critical value for the test statistic?
A. 9.488
B. 5.991
C. 7.815
D. 3.841
A large department store examined a sample of the 18 credit card sales and recorded the
amounts charged for each of three types of credit cards: MasterCard, Visa, and
Discover. Six MasterCard sales, seven Visa, and five Discover sales were recorded. The
store used an ANOVA to test if the mean sales for each credit card were equal. What are
the degrees of freedom for the F statistic?
A. 18 in the numerator, 3 in the denominator
B. 3 in the numerator, 18 in the denominator
C. 2 in the numerator, 15 in the denominator
D. 6 in the numerator, 15 in the denominator
The upper and lower limits of a uniform probability distribution are __________.
A. Positive and negative infinity
B. Plus and minus three standard deviations
C. 0 and 1
D. The maximum and minimum values of the random variable
Manufacturers were subdivided into groups by volume of sales. Those with more than
$100 million in sales were classified as large; those from $50 to $100 million as
medium size; and those between $25 and $50 million, and so on. Samples were then
selected from each of these groups. What is this type of sampling called?
A. Simple random sampling
B. Stratified random sampling
C. Cluster sampling
D. Systematic sampling
Twenty economists were sampled and asked to predict if the national economy would
improve during the next 12 months. Eleven of the economists predicted an increase,
two economists predicted no change, and seven economists predicted a decrease in the
economy. Conduct a hypothesis test at the 0.10 significance level to determine if the
majority of economists predict an increase. Based on the analysis, we would conclude
that:
A. the economists favor an increase in the economy.
B. the economists favor a decrease in the economy.
C. the economists favor no change in the economy.
D. No conclusion can be reached.
The contingency table for a sample of corporate executives classified by educational
level and the social activity follows.
What does the expected frequency for the “above average” social activity and “high
school” education equal?
A. 9.50
B. 60.00
C. 22.50
D. 28.50
In a survey of employee satisfaction, 60% of the employees are male and 45% of the
employees are satisfied. What is the probability of randomly selecting an employee who
is male and satisfied?
What does a significantly large chi-square statistic infer about the differences between
the observed and expected frequencies in a goodness-of-fit test?
The arrival of customers at a service desk follows a Poisson distribution. If they arrive
at a rate of two every five minutes, what is the probability that no customers arrive in a
five-minute period?
Twenty-one executives in a large corporation were randomly selected to study the effect
of several factors on annual salary (expressed in $000s). The factors selected were age,
seniority, years of college, number of company divisions they had been exposed to, and
the level of their responsibility. The results of the regression analysis follow:
Write out the multiple regression equation.
In ANOVA, when we do not reject the null hypothesis, ______ inference is made about
the population means.
The probability that an interval estimate includes the population parameter is called the
_____________.
The critical t statistic for an alternative hypothesis, H1: > 30, a 1% level of significance,
and a sample size of 8 is __________.
A plastics manufacturer performed a quarterly time series analysis for demands over the
last five years (periods 1 through 20). The analysis resulted in the following trend
equation and seasonal indexes:
Ŷ = 920.0 + 22.6t
Using the trend line equation and the seasonal indexes, predict demand for the third
period of the next year (i.e., period 23).
A person is trying to decide if they should buy a lottery ticket. The ticket costs $1.00. If
the ticket is a winner, the prize would be $10,000. Knowing that winning $10,000 is not
a certain outcome (state of nature), the person finds that the probability of winning is
0.0009. Based on this information, the following payoff table can be constructed.
What is the decision using a maximin approach?
A plastics manufacturer performed a quarterly time series analysis for demands over the
last five years (periods 1 through 20). The analysis resulted in the following trend
equation and seasonal indexes:
Ŷ = 920.0 + 22.6t
The seasonal indexes sum to 4.0. Therefore, the indexes have been _________.