Jonathan Reese is considering three stocks in which to invest with a fixed budget. The
table below provides information on Jonathan’s expected returns for each stock. The
table also provides information, collected from market researchers, on the
variance-covariance matrix of the individual stocks. He expects a total return of at least
10%.
Develop a quadratic optimization model to find the optimal allocation of the budget to
each stock, and variance calculations for squared terms and cross-products based on the
variance-covariance matrix.
According to the model, what is the cross-product value for Stock 3 variance?
A) 0.00049
B) 0.00283
C) -0.00047
D) 0.00074
Which of the following is true about multiple linear regression?
A) It is a linear regression model with more than one dependent variable.
B) The regression coefficients are called fractional regression coefficients.
C) It uses least squares to estimate the intercept and slope coefficients.
D) The ANOVA tests for the significance of each variable separately.
Which of the following is true when testing for normality of errors?
A) Normality is verified by inspecting for a bell-shaped distribution.
B) It is easier to evaluate normality with small sample sizes.
C) A scatter diagram of the whole data is always used to verify normality.
D) Errors are normally distributed when the scatter diagram shows a straight-line
distribution.
Explain with an example the filtering tool provided by Excel for simple criteria.
Which of the following best defines objective functions?
A) They are limitations, requirements, or other restrictions that are imposed on any
solution in an optimization model.
B) They are quantities that an optimization model seeks to maximize or minimize.
C) They are quantities for which no feasible solutions exist in an optimization model.
D) They are unknown values that an optimization model seeks to determine.
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 both Graystone and Lava surfboards is increased by $10, what is the
Allowable Decrease for Lava surfboards?
A) 95.00
B) 38.46
C) 20.00
D) 11.11
Consider the spreadsheet for a Newsvendor Model.
What is the value of standard deviation?
A) $12.50
B) $10.99
C) $15.86
D) $20.25
Which of the following charts shows three-dimensional data?
A) Surface chart
B) Column chart
C) Stock chart
D) Doughnut chart
Jonathan Reese is considering three stocks in which to invest with a fixed budget. The
table below provides information on Jonathan’s expected returns for each stock. The
table also provides information, collected from market researchers, on the
variance-covariance matrix of the individual stocks. He expects a total return of at least
10%.
Develop a quadratic optimization model to find the optimal allocation of the budget to
each stock, and variance calculations for squared terms and cross-products based on the
variance-covariance matrix.
According to the model, what is the squared term value for Stock 2 variance?
A) 0.00236
B) -0.00031
C) 0.00080
D) 0.00430
The Riviera Transport Company (RTC) produces car accessories at two plants: Dallas
and Atlanta. They ship them to major distribution centers in Houston, San Jose,
Jacksonville, and Memphis. The accounting, production, and marketing departments
have provided the information in the table below, which shows the unit cost of shipping
between any plant and distribution center, plant capacities over the next planning
period, and distribution center demands. RTC’s supply chain manager faces the problem
of determining how much to ship between each plant and distribution center to
minimize the total transportation cost, not exceed available capacity, and meet customer
demand.
Assume Xij = amount shipped from plant i to distribution center j, where i = 1
represents Dallas, i = 2 represents Atlanta, j = 1 represents Houston, and so on.
According to the transportation model, which of the following is the amount shipped
from Dallas to Houston?
A) 0
B) 175
C) 1,180
D) 750
Following is an extract from the Cost per Order Database of Grogtes LLC.
Which of the following is true about quartiles?
A) The 25th percentile is called the fourth quartile.
B) One-fourth of the data fall below the fourth quartile.
C) Three-fourths of the data are below the third quartile.
D) The 50th quartile is the third percentile.
Letherin Hides is a company that makes boots specifically targeting college students.
Forecasts of sales for the next year are 200 in the summer, 450 in the autumn, and 500
in the winter. Accessories that are used on the boots are purchased from a supplier for
$31.66. The cost of capital is estimated to be 24% per year (or 6% per quarter); thus, the
holding cost per item is 0.06($31.66) = $1.9 per quarter (rounded figure). Letherin
Hides hires freelance art designers at part-time to craft designs during the summer, and
they earn $ 6 per hour. In the autumn, labor is more difficult to keep, and the owner
must pay $6.5 per hour to retain qualified help. Because of the high demand for
part-time help during the winter holiday season, labor rates are higher in the winter, and
workers earn $7.75 per hour. Each boot design takes 2 hours to complete. How should
production be planned over the three quarters to minimize the combined production and
inventory holding costs?
The table below provides information on Letherin Hides boot design cost and
production.
According to the linear optimization model, what is the inventory held at the end of
autumn?
A) 0
B) 200
C) 950
D) 500
The Kolmogorov-Smirnov procedure:
A) compares the cumulative distribution of the data with the theoretical distribution to
base its conclusion.
B) puts more weight on the differences between the tails of the distributions.
C) breaks down the theoretical distribution into areas of equal probability and compares
the data points within each area to the number that would be expected for that
distribution.
D) is useful when a better fit is needed at the extreme tails of the distribution.
Which decision model incorporates the process of optimization?
A) predictive
B) prescriptive
C) descriptive
D) normative
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
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.
Use the spreadsheet below for Stone Age Surfboards to answer the following
question(s) using integer constraints on variables in the optimization models using the
standard Solver.
What is the quantity of Graystone surfboards produced?
A) 2
B) 5
C) 7
D) 10
Which of the following accurately describes a sampling distribution of the mean?
A) It is the mean of any one sample from a group of related populations of different
sizes.
B) It is the mean distribution of any one sample from a group of samples of varying
sizes from a population.
C) It is the mean of half the samples from a related group of populations.
D) It is the distribution of the means of all possible samples of fixed size n from a
population.
The exponential distribution:
A) has the density function f (x) = e-λx , for x ≥ 0.
B) models the time between randomly occurring events.
C) has an expected value λ.
D) is described by the familiar bell-shaped curve.