If a simulation has multiple output variables that are related to one another, the
distributions of all output variables can be viewed on a single Risk Solver Platform
chart called a(n)
________.
A) trend chart
B) sensitivity chart
C) overlay chart
D) box-whisker chart
Below is the spreadsheet for a newsvendor model.
Answer the following question(s) using multiple parameterized simulations. The range
for the historical demand is 40-51. Assume a uniform integer distribution for demand,
and run 12 simulations for different purchase quantities. Use 5,000 trials and 1 for
random seed.
Which of the following is the best purchase quantity to maximize the expected profit if
demand is 42?
A) 42
B) 45
C) 48
D) 51
Monte Carlo sampling differs from Latin Hypercube sampling in that the Monte Carlo
sampling ______.
A) results in a more even distribution of output values
B) uses the entire range of the distribution in a more consistent manner
C) selects random variates independently over the entire range of possible values of the
distribution
D) uses an uncertain variable whose probability distribution is divided into intervals of
equal probability
Which of the following is the inherent reason why sampling errors occur?
A) because samples represent the whole population
B) because samples are only a subset of the population
C) because samples never provide enough data to estimate standard deviation
D) because the means cannot be accurately estimated using samples
Which of the following solving methods is selected in the Solver dialog for linear and
linear integer optimization problems?
A) GRG Nonlinear
B) Simplex LP
C) SOCP Barrier Engine
D) Evolutionary
Calculate the median for the cost per order data.
A) $325
B) $154
C) $174.17
D) $88
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.
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
Below are four options for an investment decision.
Identify the average utility for the growth fund decision.
A) 1.05
B) 0.70
C) 0.20
D) 0.60
Misty Inc. launches a new range of perfumes for men and women. The probability of
high consumer demand for the product is 0.6 and low consumer demand is 0.4. The
probability of a favorable survey response given high consumer demand is 0.9 and the
probability of a favorable survey response given low consumer demand is 0.2.
What is the likelihood for high demand knowing that the market report is favorable?
A) 84%
B)) 90%
C) 87%
D) 80%
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 probability that the drug will not reach the market? [Hint: Choose the
approximate value.]
A) 0.95
B) 0.89
C) 0.77
D) 0.82
A graphical depiction of a frequency distribution for numerical data in the form of a
column chart is called a ________.
A) cartogram
B) correlogram
C) histogram
D) dendogram
Observations consisting of pairs of variable data are required to construct a ________
chart.
A) doughnut
B) scatter
C) radar
D) line
What is the formula used to calculate the value of at in the linear trend equation Ft+k =
at + btk while using double exponential smoothing?
A) at = β(bt – bt–1) + (1 –β)bt–1
B) at = αFt-1 + (1 – α)(at +1 + bt+1)
C) at = αFt + (1 – α)(at –1 + bt-1)
D) at = β(bt + bt–1) + (1 + γ)bt–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.
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 total amount to be produced in
summer?
A) 200
B) 100
C) 550
D) 0
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
Which of the following is the probability mass function of the Bernoulli distribution?
A)
B)
C)
D)
Time-series models may exhibit seasonal effects or cyclical effects. A seasonal effect
differs from a cyclical effect in that a seasonal effect:
A) has no trend, is relatively constant, and only exhibits random behavior.
B) describes ups and downs over a time frame such as several years.
C) is one that repeats at fixed intervals of time, typically a year, month, week, or day.
D) is based on analysis of historical time-series data and are predicated on the
assumption that the future is an extrapolation of the past.
A children’s welfare fundraiser involves selling one thousand $70 tickets to win a
$20,000 grand prize. If the probability of winning is only 0.005, what is the expected
payoff?
A) -$40
B) -$50
C) $30
D) $60
Explain how data-mining using lagging and leading measures of the cause-and-effect
model can help managers make business decisions.
What is a confidence interval in sampling?
What is the probability that profit will be less than $1,900?
Briefly explain the assumptions on which the statistical hypothesis tests associated with
regression analysis are predicated.
Compute the variance of the random variable that denotes the possible summed scores
from the two spinners.
Explain the travelling salesperson problem with examples.
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.
The table below is the data set of the Shiller Real Home Price Index for the years
1946-1956.
Setting k = 3, determine the simple moving average forecast for the year 1950.