Which of the following is true of the t-distribution?
A) It has narrower confidence intervals than the standard normal distribution.
B) It is only used to calculate confidence intervals where there is no known population
standard deviation.
C) It converges to the standard normal distribution as degrees of freedom increase.
D) It does not require parameters such as degrees of freedom.
Which of the following is a parameter in the Normal Distribution Dialog of the Risk
Solver Platform?
A) maximum value
B) minimum value
C) most likely value
D) mean
Below is the profit model spreadsheet for the Lazarus Shoe Company producing their
latest model of shoes for the month of January.
Calculate the variable cost of production.
A) $1,786,000
B) $836,000
C) $600,000
D) $1,436,000
What is a database?
A) a structured collection of related files and data
B) simply a collection of data
C) a data file holding a single file
D) flat files used to store data
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 net present value for Dresden’s new drug.
A) $1,312,041,240
B) ($339,600,000)
C) $3,702,463,939
D) ($932,028,690)
If the given time series has a trend and no seasonality, the most appropriate forecasting
model to determine the forecast of the time series is the ________ model.
A) single exponential smoothing
B) Holt-Winters no trend smoothing
C) double exponential smoothing
D) Holt-Winters additive
Which of the following types of conditions is most likely to render a midrange value
useless? A) having repetitious values in the data set
B) having the data arranged from least to greatest in value
C) having a small sample size
D) having extreme values in a data
When a scatter chart of data shows a nonlinear relationship, the nonlinear model can be
expressed as:
A) Y = β0 + β1X + β2X2 + ε
B) Y = β0 + β1X + (β2X)2 + ε
C) Y = β0 + β1X + β2X
D) Y = β0 + β1X2 + β2X2 + ε
Below is a room overbooking model spreadsheet for the Metza, a hotel chain. The hotel
has 425 rooms priced at $180 per day each, and is usually fully booked. Reservations
can be cancelled any time before 5:00 p.m. with no penalty. The hotel estimates an
average overbooking cost of $150. Customer demand is set at 400 with an average
cancellation of 20.
Calculate the net revenue.
A) $72,900
B) $76,500
C) $64,650
D) $68,400
To find the average of the total cost of orders from Rex Technologies, what Excel
formula should be used in A12?
A) =AVERAGE(C4:C10)
B) =AVERAGE(C4:C7)
C) =AVERAGE(E4:E7)
D) =AVERAGE(E4:E10)
In which of the following ways does demand influence profit?
A) It predicts how many units will be sold.
B) It directly influences the fixed cost of production.
C) It helps in reducing the variable cost of production.
D) It reduces the unit cost of production.
The spreadsheet below shows the net income model for a company that sells shoes.
Which of the following formulas would be used to calculate the net operating income?
A) =B15-B5
B) =B15-B16
C) =SUM(B6:B10)-B11
D) =B15-B16+B6
Following is an extract from the database of a construction company. The table shows
the height of walls in feet and the cost of raising them. The estimated simple linear
regression equation is given as Ŷ = b0 + b1X. (Hint: Use Excel functions).
What is the estimated cost of raising a 10-inch wall?
A) 1505.786
B) 1103.578
C) 968.6109
D) 1123.008
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
Below is the spreadsheet for Memphis Designs fixed cost model:
What is the total cost incurred by the company?
A) $ 8,345.00
B) $ 10,756.80
C) $ 7,289.62
D) $ 9,582.75
Which of the following best defines constraints in an optimization problem?
A) They are limitations, requirements, or other restrictions that are imposed on any
solution.
B) They are quantities that an optimization model seeks to maximize or minimize.
C) They are quantities for which no feasible solutions exist.
D) They are unknown values that the model seeks to determine.
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
Following is an extract from the Employee Payroll Database of HFR Informatics Inc.
What is the cumulative relative frequency of Ranks 1 and 2?
A) 0.80
B) 0.15
C) 0.30
D) 0.25
Which of the following Excel tools is used for a two-sample test for equality of
variances?
A) Excel F-test Two-sample for variances
B) Excel z–test: Two-sample for means
C) Excel t-test: Two-sample assuming unequal variances
D) Excel t-test: Two-sample assuming equal variances
15 students were asked to choose between the broad categories of Arts, Science, and
Math as their preferred area of study.
Use the multiplication law of probability to compute the probability that the respondent
is male and prefers Math.
A) 8/75
B) 3/8
C) 3/225
D) 3/15
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.
Compute the variance of the random variable that denotes the possible summed scores
from the two spinners.
What are the four possible outcomes that can be obtained by solving a linear
optimization model?
While conducting regression analysis, how is constructing a normal probability plot
useful?
The table below shows the sales per day at a grocery store over a period of a week.
Calculate the z-score for sales on Day 4.
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.
Briefly explain classification as a data-mining tool with an example.
Explain the different Lookup functions in Excel.