Given that Q = order quantity, D = annual demand, C = unit cost of the item, C0 = cost
per order placed, i = inventory carrying charge per unit, which of the following
represents the holding cost per unit?
A) D/Q
B) iC
C) (D/Q)C0
D) iCQ/2
In statistical terminology, the variable of interest is called a _____.
A) critical value
B) p-value
C) factor
D) test-statistic
Which of the following Excel tools is used for a two-sample test for equality of
variances?
A) Excel F-test Two-sample for variances
B) Excel z–test: Two-sample for means
C) Excel t-test: Two-sample assuming unequal variances
D) Excel t-test: Two-sample assuming equal variances
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 shadow price for the finishing hours used?
A) 32.46
B) 17.39
C) 8.33
D) 6.67
________ is based on dividing a population into subgroups, sampling a set of
subgroups, and conducting a complete census within the subgroups sampled.
A) Cluster sampling
B) Continuous process sampling
C) Judgment sampling
D) Systematic sampling
Which of the following charts allows plotting of multiple dimensions of several data
series?
A) Doughnut chart
B) Bubble chart
C) Radar chart
D) Area chart
In the equation to calculate the economic value of a customer, V = R F M / D, how is
the value for F estimated?
A) It is estimated to be the total number of purchases the customer has made.
B) It is estimated to be the number of visits of the customer without actually spending
on an item.
C) It is estimated to be the purchase frequency per year.
D) It is estimated to be the number of customers defecting per year.
The payoff table given below lists four mortgage options:
The probability of rates rising is 0.6, rates stable is 0.3, and rates falling is 0.1.
What is the expected payoff of the 5-year ARM?
A) $ 17,872.90
B) $ 53,618.60
C) $ 48,805.20
D) $ 20,081.80
The following table lists the amounts paid in mortgages as a percentage of the
household income in the town Aponia. Calculate the variance and standard deviation of
the data, if mean is given as 22.4%. The percentage (x) values are estimated as
midpoints of each percentage range.
Below is the spreadsheet for a project selection model:
What is the return obtained from Project 3?
A) $ 200,000
B) $ 125,000
C) $ 275,000
D) $ 225,000
Calculate the median for the cost per order data.
A) $325
B) $154
C) $174.17
D) $88
Which of the following is true for a mode?
A) Modes are the mid values of data arranged from least to greatest.
B) Modes are affected by outliers.
C) Modes cannot be used in data having repetitious values.
D) The highest bar in a histogram is its mode.
Which of the following formula is used to compute covariance between two variables X
and Y?
A) cov (X,Y) =
B) cov (X,Y) =
C) cov (X,Y) =
D) cov (X,Y) =
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 Graystone surfboards is increased by $10, what is the Allowable
Decrease for Lava surfboards?
A) 30.00
B) 85.00
C) 16.67
D) 58.75
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
Which of the following is true about chi-square distribution?
A) It is a special distribution and is denoted by (C2).
B) It is characterized by degrees of freedom.
C) It is computed using the Excel function CHISQ.INV.TEST.
D) It has a left-tail area equal to the expected value of the sample.
Give an account of balance constraints with some examples of verbal clues.
What are the assumptions made when developing an economic order quantity (EOQ)
model?
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.
Explain the simplex method used by Solver.
Describe the steps involved in the construction of a decision tree.
Explain the concept of curvilinear regression model.
How does Excel’s Solver help interpret reduced cost as shadow price for bounded
variables?