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 market size for the second year.
A) 3,000,000
B) 273,000
C) 3,244,800
D) 3,120,000
The table below provides the sales data for JD Inc. for the year 1998. Given: α = 0.2,
β = 0.15, and γ = 0.05 (Hint: Use an additive Holt-Winters model.)
Umbrella Sales of JD Inc.
Using an appropriate Holt -Winters trend model, calculate the value of the mean
absolute percentage error for the given data.
A) 8.10
B) 330.01
C) 384.83
D) 7.21
Below is a payoff table with three mortgage options:
The expected value of sample information (EVSI) is equal to the ________.
A) EMV without sample information divided by the EMV with sample information
B) EMV without sample information minus the EMV with sample information
C) sum of the EMV with sample information and the EMV without sample information
D) EMV with sample information minus the EMV without sample information
The table below provides the sales data for JD Inc. for the year 1998. Given: α = 0.2,
β = 0.15, and γ = 0.05 (Hint: Use an additive Holt-Winters model.)
Umbrella Sales of JD Inc.
What will be the predicted sales for umbrellas for the month of February of year 2?
A) 4530.19
B) 4648.21
C) 4883.76
D) 4818.07
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 standard deviation obtained from the simulation results?
A) 5
B) 4
C) 8
D) 10
Descriptive decision models:
A) aim to predict what will happen in the future.
B) describe relationships but do not tell a manager what to do.
C) help analyze the risks associated with various decisions.
D) do not facilitate evaluation of different decisions.
Below is a payoff table that lists three mortgage options:
What is the maximum opportunity loss incurred for the 2-year ARM?
A) $ 8,626
B) $ 13,716
C) $ 14,369
D) $ 10,581
In the ________ method, the distance between groups is defined as the distance
between the closest pair of objects, where only pairs consisting of one object from each
group are considered. A) Ward’s linkage clustering
B) single linkage clustering
C) divisive clustering
D) average group linkage clustering
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 is the constraint for investment in low-priced and multinational
funds?
A) X1 + X2 ≥ 0.35(750,000)
B) ≥ 0.35(750,000)
C) X1 + X2 + X3 + X4 + X5 + X6 ≥ 0.35(750,000)
D) ≥ 0.35
What is the value of mean obtained from the simulation results?
A) 473.0
B) 520.0
C) 456.0
D) 490.0
In the equation for calculating a confidence interval for a proportion, p za/2,
what
does represent?
A) the mean for the sampling distribution of the proportion
B) the degree of freedom for the sampling distribution of the proportion
C) the standard error for the sampling distribution of the proportion
D) the estimator for sampling distribution of the proportion
For a one-tailed test, the critical value:
A) divides the sampling distribution into three parts.
B) is the number of standard errors away from the sample mean.
C) helps determine if the test statistic falls in the rejection region or not.
D) fails to reject the null hypothesis if the test statistic exceeds the critical value.
When will a company use a predictive decision model?
A) when it wishes to determine the best product pricing to maximize revenue
B) when it wishes to know how best to use advertising strategies to influence sales
C) when it wishes to know sales patterns to plan inventory levels
D) when it wishes to ensure that a specified level of customer service is achieved
Which of the following Lookup functions returns the relative position of an item in an
array that equals a specified value in a specified order?
A) HLOOKUP(lookup_value, table_array, row_index_num)
B) MATCH(lookup_value, lookup_array, match_type)
C) INDEX(array, row_num, col_num)
D) VLOOKUP(lookup_value, table_array, col_index_num)
A manufacturer wishes to determine if the average profit from the sale of his product
exceeds $6,710. Which of the following is the appropriate hypothesis test?
A) H0: population mean profit from sale > $6,710 vs. H1: population mean profit from
sale ≤ $6,710
B) H0: population mean profit from sale ≤ $6,710 vs. H1: population mean profit
from sale > $6,710
C) H0: population mean profit from sale < $6,710 vs. H1: population mean profit from
sale ≥ $6,710
D) H0: population mean profit from sale ≥ $6,710 vs. H1: population mean profit
from sale < $6,710
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, calculate the / value at a 95% confidence interval.
A) 1.64
B) 1.84
C) 1.96
D) 2.19
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 total number of hours used for the finishing operation?
A) 39.6
B) 34.4
C) 29.2
D) 24.8
________ is the ratio of the number of transactions that include all items in the
consequent as well as the antecedent to the number of transactions that include all items
in the antecedent.
A) Lift
B) Logit
C) Support for the association rule
D) Confidence of the association rule
The Ransin Sports Company has noted that the size of individual customer orders is
normally distributed with a mean of $112 and a standard deviation of $9. If a soccer
team of 11 players were to make the next batch of orders, what is the probability that
the mean purchase would exceed $116?
A) 11%
B) 3%
C) 33%
D) 7%
Which of the following is true of variance?
A) The formula to calculate variance of a population is not the same as the formula to
calculate variance of a sample.
B) Its value is inversely proportional to the degree to which the data is spread from the
mean.
C) It only requires the middle 50% of data to be calculated.
D) It is the square root of standard deviation.
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.
Problem statements such as the amount of material used in production cannot exceed
the amount available in inventory would be categorized as a ________ constraint.
A) proportional relationships
B) limitations
C) requirements
D) simple bounds
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 probability that more than 300 tickets will be sold?
A) approximately 0.75
B) approximately 0.40
C) approximately 0.60
D) approximately 0.50
Explain the different types of Holt-Winters models used in forecasting.
When are logarithmic functions used in predictive analysis?
Develop a prescriptive model that will help Goody Woods identify the price that
maximizes the total revenue.
How is the strength of an association measured?
P(P|Q) = P(Q) – P(P or Q)
Give an account of balance constraints with some examples of verbal clues.
Give an account of balance constraints with some examples of verbal clues.