________ is a collection of techniques that seek to group or segment a collection of
objects or observations into subsets, such that those within each subset are more closely
related to one another than objects assigned to different subsets.
A) Association rule mining
B) Discriminant analysis
C) Cluster analysis
D) Logistic regression
Identify the power of the test from the following probabilities.
A) P(rejecting H0 | H0 is true)
B) P(not rejecting H0 | H0 is false)
C) P(rejecting H0 | H0 is false)
D) P(not rejecting H0 | H0 is true)
While testing hypotheses for regression coefficients, the t-test for the slope is expressed
as:
A) t =
B) t =
C) t =
D) t =
Which of the following Excel functions is applied to test for significance of regression?
A) COVAR
B) ANOVA
C) SINH
D) TREND
The details of the clock sales at a supermarket for the past 6 weeks are shown in the
table below. The time series appears to be relatively stable, without trend, seasonal, or
cyclical effects. The simple moving average value of k is set at 2.
Using the data, determine the value of the simple moving average root mean square
error.
A) 0.21
B) 14.39
C) 20.12
D) 207.13
Below is the spreadsheet for Memphis Designs fixed cost model:
What is the net production at the end of the third quarter?
A) 75
B) 200
C) 450
D) 600
Below is a payoff table with three mortgage options:
What is the expected opportunity loss for the 3-year ARM?
A) $ 7,979.60
B) $ 3,959.40
C) $ 6,853.50
D) $ 8,621.40
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 coefficient of variation obtained from the simulation results? [Hint: Choose
the approximate value.]
A) 1.587
B) 1.122
C) 2.015
D) 1.890
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, what is the total weighted distance between the 5 production
cells and the phone charger?
A) 253.50
B) 113.00
C) 172.50
D) 165.50
Which of the following is the mathematical model for deriving total cost of only
outsourcing?
A) TC = Q x C
B) TC = F + (C x Q)
C) TC = (V +
C) x Q
D) TC = (VC + F) x Q
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.
What is the total profit generated?
A) $ 675.68
B) $ 920.57
C) $ 521.74
D) $ 788.32
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 objective function minimize total risk?
A) 11.87 X1 + 12.62 X2 + 13.72 .X3 + 3.37 X4 + 8.4 X5 + 6.91 X6
B) 7.23 X1 + 8.42 X2 + 6.66 .X3 + 2.72 X4 + 8.89 X5 + 3.5 X6
C) 11.87 X1 + 12.62 X2 + 13.72 .X3 + 3.37 X4 + 8.4 X5 + 6.91 X6 / 750,000
D) 7.23 X1 + 8.42 X2 + 6.66 .X3 + 2.72 X4 + 8.89 X5 + 3.5 X6 ≥ 6%
In classification, which of the following would be considered as a categorical variable
of interest for a credit approval decision for a requester?
A) age of the requester
B) income of the requester
C) revolving balance of the requester
D) reject or accept credit approval
A manager at Gampco Inc. wishes to know the company’s revenue and profit in its
previous quarter. Which of the following business analytics will help the manager?
A) prescriptive analytics
B) normative analytics
C) descriptive analytics
D) predictive analytics
Below is a spreadsheet for Trance Electronics.
Suppose that the project manager of Trance Electronics has identified the following
uncertain variables in the model and the distributions and parameters that describe
them, as follows: Market size: normal with mean of 20,000,000 units and standard
deviation of 4,000,000 units. R&D costs: uniform between $600,000,000 and
$800,000,000.
Clinical trial costs: lognormal with mean of $150,000,000 and standard deviation
$30,000,000. Annual market growth factor: triangular with minimum = 2%,
maximum = 6%, and most likely = 3%.
Annual market share growth rate: triangular with minimum = 15%, maximum =
25%, and most likely = 20%.
The number of trials per simulation is equal to 10,000 at a Sim. Random Seed of 2. Run
the simulation and answer the following questions using the Risk Solver Platform.
With reference to the trend chart, which year shows the highest mean net cumulative
profit?
A) Year 1
B) Year 2
C) Year 4
D) Year 5
Below is a spreadsheet for Stone Age Surfboards.
Assume that the finishing time for a pair of Rockwell surfboards is triangular with a
minimum value of 1.4, a most likely value of 1.5, and a maximum value of 1.8 and that
finishing time for a pair of Limestone surfboards is also triangular with a minimum
value of 1.8, a most likely value of 2.0, and a maximum value of 2.4. The number of
trials per simulation is equal to 5000.
Which of the following cells is defined with a triangular distribution?
A) B6
B) D6
C) B7
D) D7
Below is the spreadsheet for Memphis Designs fixed cost model:
What is the net production at the end of the second quarter?
A) 75
B) 200
C) 450
D) 600
The Atlas Movies Theater is planning to reprice 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 price range within
which they plan to reduce their ticket rates.
According to the nonlinear model, which of the following is the projected revenue
figure for Gold tickets based on its new price?
A) $432.93
B) $1,316.92
C) $1,116.03
D) $523.29
Coppell Services contracts with outsourcing partners to handle various customer service
functions. Based on a study of call volumes provided by one of the firm’s partners, the
minimum number of staff needed for each hour of the day is as follows:
Mr. Coppell hires 6 permanent employees and wants to staff the remaining
requirements using part-time employees who work 4-hour shifts (four consecutive
hours starting as early as 8 A.M. or as late as 1 P.M.).
What is the minimum number of total part-time employees needed across all the 4-hour
shifts to ensure meeting the staffing requirements?
A) 16
B) 28
C) 24
D) 20
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
summer?
A) 450
B) 0
C) 200
D) 550
________ is a measure of the linear relationship between two variables, X and Y, which
does not depend on the units of measurement.
A) Kurtosis
B) Proportion
C) Skewness
D) Correlation
Below is the table showing rate of shoes sold per day and the highest-priced shoe sold
that day for a one-week period. The rate of shoes sold per day (X) and the price of the
shoes (Y).
Use Excel to calculate the covariance between variables X and Y.
A) 2.67
B) 0.02
C) 16.71
D) 7.04
When using the t-statistic in multiple regression to determine if a variable should be
removed:
A) R2 will increase if the variable is removed.
B) if |t| > 1, the standard error will decrease.
C) a large number of independent variables is convenient.
D) if |t| < 1, the standard error will increase.
The worldwide sales of cars from 1981 -1990 are shown in the table below. Given: α =
0.2, γ = 0.05, and season length = 1. (Hint: Use XLMiner).
Which of the following is the value of the root mean square error for the given data?
A) 252.55
B) 367.35
C) 21.70
D) 109.76
Cerebro Manufacturing produces four types of structural support fittings-plugs, rails,
rivets, and clips-which are machined on two CNC machining centers. The machining
centers have a capacity of 250,000 minutes per year. The gross margin per unit and
machining requirements are shown in the spreadsheet below.
What is the gross margin per minute of rivets manufactured?
A) $ 0.60
B) $ 0.73
C) $ 0.40
D) $ 0.27
List the four major categories of inventory costs and explain how they are influenced by
the timing of the ordering decision and amount ordered.
Why is testing for independence important for businesses?
Describe the steps involved in the construction of a decision tree.
How can managers judge the validity of a model?
Elaborate on the use of geographic data mapping in business analytics.
How does Excel’s Solver help interpret reduced cost as shadow price for bounded
variables?
What is the expected value of sample information?
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.
Explain how data are used by accountants, economists, and operations managers.