The economic order quantity is the amount to order that minimizes the total cost of
ordering and holding.
In a two-sample test for means with the population variance being known, the z-test
uses a test statistic that is based on the standard normal distribution.
Decision variables that are forced to be integers are called general integer variables.
A confidence interval is a range of values between which the value of the population
parameter is believed to be.
A confidence interval is associated with the sampling distribution of a statistic.
The best-fitting line maximizes the residuals.
The market share of a business would be considered a lagging measure in the
cause-and-effect modeling of data mining.
The beta distribution is a function of three parameters, the minimum, a; maximum, b;
and most likely, c.
Monte Carlo simulation is an inappropriate tool to analyze cash budgets because of the
inherent uncertainty of the sales forecasts on which most cash budgets are based.
In cluster analysis, the objects within clusters should exhibit a high amount of
dissimilarity.
The best-fitting line maximizes the residuals.
Which of the following is true about the classical definition of probability?
A) It is based on judgment and experience.
B) If the process that generates the outcomes is known, probabilities can be deduced
from theoretical arguments.
C) The probability that an outcome will occur is simply the relative frequency
associated with that outcome.
D) It is based on observed data.
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 cost when demand is 40,000.
A) $ 2,000,000
B) $1,925,000
C) $1,100,000
D) $75,000
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 shadow price
for the finishing hours used?
A) $18.48
B) $17.39
C) $15.42
D) $14.15
If the given time series has no trend and no seasonality, the most appropriate forecasting
model to determine the forecast of the time series is the ________ model.
A) single moving average
B) Holt-Winters no-trend smoothing
C) double exponential smoothing
D) Holt-Winters additive
John and Mike were offered mints. What is the probability that at least John or Mike
would respond favorably? (Hint: Use the classical definition).
A)1/8
B)1/2
C) 3/4
D) 3/8
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 total units sold during the discount sales period.
A) 388.13
B) 25.88
C) 133.3
D) 39.28
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
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.
Which of the following is the Excel formula to determine the number of units sold?
A) =B8
B) =MIN(0,B8,B9)
C) =MIN(B8,B9)
D) =MAX(0,B8,B9)
A company makes standard 130- inch-wide rolls of thin sheet metal and slits them into
smaller rolls to meet customer orders for widths of 10, 14, and 25 inches. Suppose that
the company has proposed the following cutting patterns:
Demands for the coming week are 950 10-inch rolls, 725 14-inch roles, and 640
25-inch rolls. Develop a model using the Analytic Solver Platform that will determine
how many 130-inch rolls to cut into each of the six patterns in order to meet demand
and minimize scrap.
What is the total number of 14-inch rolls produced?
A) 721
B) 725
C) 728
D) 740
The difference between the first and third quartiles is referred to as the ________.
A) standard deviation
B) variance
C) interquartile range
D) midrange
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.).
What is the minimum number of total part-time employees needed across all the 4-hour
shifts to ensure meeting the staffing requirements?
A) 16
B) 28
C) 24
D) 20
Prescriptive decision models help:
A) make predictions of how demand is influenced by price.
B) make trade-offs between greater rewards and risks of potential losses.
C) decision makers identify the best solution to decision problems.
D) describe relationships and influence of various elements in the model.
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 Y-coordinate for the phone
charger location?
A) 1.50
B) 1.00
C) 3.00
D) 5.00
A(n) ________ is a single number derived from sample data that is used to estimate the
value of a population parameter.
A) confidence interval
B) frequentist interference
C) interval estimate
D) point estimate
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 coefficient of variation obtained from the simulation results?
A) 0.086
B) 0.120
C) 0.014
D) 0.048
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
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 deviation.
Give an account of how data is used in predictive models.
What are the three elements required to characterize decisions with uncertain
consequences?
What are the two basic properties of a linear optimization model?
What are the three elements required to characterize decisions with uncertain
consequences?
What are the differences between an aggressive strategy and a conservative strategy?