In stock trading, the higher the coefficient of variation for the stock, the smaller the
relative risk is for the return provided.
If the Integer Tolerance is set to 0.01, the Solver will stop if it finds an integer solution
that is within 10% of the optimal solution.
A confidence interval is associated with the sampling distribution of a statistic.
Infeasible problems can occur when the demand requirement is higher than the
available capacity.
Point estimates do not provide any indication of the magnitude of the potential error in
the estimate.
The indexes in the forecasting indicators provide a complete forecast.
A normal distribution has a limited range and can be skewed in either direction.
AutoFilter creates filtering criteria based on the type of data being filtered.
Expected confidence assumes independence between the consequent and the
antecedent.
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.
When constructing frequency distributions for numerical data, SUMIF is used to count
the frequencies of each discrete value.
Estimators are the measures used to estimate population parameters.
For an odd number of observations, the median is the mean of the two middle numbers.
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.
Indicators are measures that are believed to influence the behavior of a variable an
individual wishes to forecast.
The simple random sampling method is the only statistical sampling method that does
not include sampling errors.
Excel’s Trendline feature cannot be used in modeling trends which include time
variables.
If P(X|Y) = P(X), it implies that event Y is dependent on event X.
Linear optimization cannot be used on problems having multiple time periods.
One of the properties of the mean is that the sum of the deviations of each observation
from the mean is zero.
During which phase in problem solving is a formal model often developed?
A) analyzing the problem
B) structuring the problem
C) defining the problem
D) implementing the solution
The ________ is the average of the greatest and least values in the data set.
A) mean
B) median
C) midrange
D) mode
Below is the spreadsheet for Memphis Designs fixed cost model:
Which of the following constraints is used in Solver?
A) $B$14:$D$14 > = $B$18:$D$18
B) $B$16:$D$16 = binary
C) $B$19:$D$19 < = $B$8:$D$8
D) $B$15:$D$15 = binary
Which of the following characterizes a random variable having two possible outcomes,
each with a constant probability of occurrence?
A) Beta distribution
B) Bernoulli distribution
C) Poisson distribution
D) Binominal distribution
Pickson Luthiers Corporation makes four models of electric guitars, ScarCT, Dela Mort,
Warax, and Invazen. Each guitar must flow through five departments, assembly,
painting, sound testing, inspection, and packaging. The table below shows the relevant
data. Production rates are shown in units/hour. (ScarCT is assembled elsewhere).
Pickson wants to determine how many guitars to make to maximize monthly profit.
According to the linear optimization model, what is the total profit for the Pickson
Luthiers Corporation?
A) $10,000
B) $199,880
C) $205,200
D) $219,200
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 production cells
covers the most distance according to its demand when using the phone charger?
A) Measurements
B) Paint
C) Electricals
D) Testing
Bolton Computer’s
Laptop
Pricing Decision
Inputs
Price
Model
Sales -3.85 price + 1150.9
Outputs
Total revenue sales price
According to the nonlinear model, which of the following is the expected sales figure
based on the computed price?
A) 149.47
B) 719.7
C) 575.45
D) 500
Below is a decision tree illustrating the R&D process for a new drug.
Let us assume that if market is large, payoff is lognormally distributed with a mean of
$4,900 million and a standard deviation of $1,000 million; if market is medium, payoff
is lognormally distributed with a mean of $2,500 million and a standard deviation of
$500 million; and if market is small, payoff is normally distributed with a mean of
$1,800 million and standard deviation of $200 million. Let us also assume that the cost
of clinical trials is uncertain and estimates are modeled with a triangular distribution
with a minimum of -$ 700 million, a most likely value of – $550 million, and a
maximum of -$500 million. Use 10,000 trials and a random seed of 1.
What is the value of mode obtained from the simulation results? [Hint: Choose the
approximate value.]
A) $ 119.0
B) $ 116.1
C) $ 105.7
D) $ 94.1
The total cost of reaching consumers (C) depends upon the number of consumers (N),
advertising costs (A), and transportation costs (T). The linear cost prediction model is
represented as:
C = c – nN + aA + tT
where c, n, a, and t are constants and c estimates the total cost when the remaining
variables are zero. Which of the following interpretations is true about this model?
A) Change in variables N, A, and T will cause n, a, and t to change.
B) As n decreases, c will increase.
C) When variables N, A, and T are zero, C = c – n + a + t.
D) Change in variables N, A, and T will not reflect any changes in c.
Consider the spreadsheet for a Newsvendor Model.
What is the purchase quantity lower cutoff if the likelihood is 75%?
A) 264
B) 255
C) 246
D) 228
In multiple regression, R Square is referred to as the:
A) multiple correlation coefficient.
B) coefficient of autocorrelation.
C) coefficient of multiple determination.
D) multiple significance coefficient.
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
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 scrap produced?
A) 1,389
B) 1,390
C) 1,427
D) 1,445
U-botit.com is an electronic commerce company that sells music online. It keeps a tab
of what genre of music their registered customers buy. If u-botit.com were to use the
data mining approach of association, which of the following actions would it take?
A) send recommendations to customers based on their buying habits
B) conduct surveys to customers to gauge customer satisfaction
C) classify the customers based on the genre of music they listen to
D) provide discounts to certain genre buyers where sales are less
Below is the spreadsheet for demand prediction of a company that sells chocolates.
If a dollar sign is used after the column in B5 (B$5), how will the formula at B8 be
represented in C9 using absolute addressing?
A) C3-B$5*C9
B) C5-C$6*B9
C) C5-C$6*C9
D) C5-C$5*B9
The table provided below gives the sales details of the number of android smart phones
at an electronic retail store for the past 6 weeks. The time series appears to be relatively
stable, without trend, seasonal, or cyclical effects. (Hint: Optimize α value in 0.1
increments)
Which of the following is the value of the root mean square error for the given data?
A) 11.56
B) 21.77
C) 13.87
D) 20.13
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
Below is the spreadsheet for a portfolio allocation model.
Answer the following question(s) using a model with uncertainty on type of investment
return. Assume that the distributions of life insurance annual return is uniform with
minimum 4% and maximum 6%, bond mutual funds annual return is normal with mean
7% and standard deviation 1%, stock mutual funds annual return is lognormal with
mean 11% and standard deviation 4%. Use 10,000 trials and 1 for random seed for the
simulation.
What is the value of standard deviation obtained from the simulation results for
maximizing the total expected return? [Hint: Choose the approximate value.]
A) $ 1,346.78
B) $ 1,890.25
C) $843.52
D) $ 1,578.64
Below is a payoff table that lists four mortgage options:
The probability of rates rising is 0.6, rates stable is 0.3, and rates falling is 0.1. Answer
the following questions by creating a decision tree.
Which of the following is considered the best expected value decision?
A) 1-year ARM
B) 3-year ARM
C) 5-year ARM
D) 30-year fixed
What is the importance of Integer Tolerance in Solver?
List the systematic approach to build good multiple regression models.
Describe the steps involved in the construction of a decision tree.
For a two-sample test, explain the procedure used when it is difficult to justify the
assumption that the variances of each population are equal.
To meet consumer demand, Nib ‘N’ Ink must produce 800 gel-ink refills. Should the
company produce them in-house or outsource them from the supplier? (Hint: Use the
mathematical descriptive model).
List out the different types of constraints that help model formulation.
Calculate the standard deviation for cost per order in the following table.
Develop a linear model relating the demand for Goody Woods’ units to the price.
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%.
Using the table above, provide the objective function for minimal variance, and the
constraints for creating an optimization model.
Calculate the economic value of a loyal customer for a company given that the
customer purchases, on an average, worth $43worth per visit and comes three times a
year. The company’s gross profit margin is 35 per cent with a customer defection rate of
0.4.