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
If D is demand, P is the unit price, and c and d are constants (where d > 0 is the price
elasticity), which of the following is a nonlinear demand prediction model?
A) D = d + (c P)
B) D = (d P)c
C) D = cdP
D) D = cP-d
Explain with an example the filtering tool provided by Excel for simple criteria.
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
Following is an extract from the database of a construction company. The table shows
the height of walls in feet and the cost of raising them. The estimated simple linear
regression equation is given as Ŷ = b0 + b1X. (Hint: Use Excel functions).
What is the value of the coefficient b1?
A) 86.81704
B) 254.8371
C) 0.010697
D) -2.14625
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 is the value of the mean absolute deviation for the given data?
A) 8.10
B) 340.73
C) 14.82
D) 7.62
A ________ is one that provides a range for anticipating the value of a new observation
from the same population.
A) prediction interval
B) confidence interval
C) t-distribution
D) standard normal distribution
Below is the spreadsheet for demand prediction of a company that sells chocolates.
If a dollar sign is used before the column label B4 ($B4), how will the formula at B10
be represented in C11 using absolute addressing?
A) $B5-C6*B11
B) $C5-C6*A10
C) $B4-C5*B11
D) $A5-C6*B11
The Excel function of
A) SUM(range)
B) COUNT(range)
C) MAX(range)
D) COUNTIF(range, criteri A)
Which of the following is included in the data mining approach of data exploration and
reduction?
A) analyzing data to predict how to classify a new data element
B) identifying groups in which the elements of the groups are in some way similar
C) creating rules for target marketing based on association of variables
D) developing analytic models to describe the relationship between metrics
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 the mean obtained from the simulation results that maximizes the
total expected return? [Hint: Choose the approximate value.]
A) $ 5,876.28
B) $ 6,570.76
C) $ 7,257.45
D) $ 5,178.84
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.
What is the risk that the net present value over the 5 years will not be positive?
A) approximately 40%
B) approximately 57%
C) approximately 24%
D) approximately 77%
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%.
Develop a quadratic optimization model to find the optimal allocation of the budget to
each stock, and variance calculations for squared terms and cross-products based on the
variance-covariance matrix.
According to the model, what is the cross-product value for Stock 3 variance?
A) 0.00049
B) 0.00283
C) -0.00047
D) 0.00074
Below is a spreadsheet for a hotel overbooking model.
Answer the following question(s) using multiple parameterized simulations. The range
of historical customer demand is 400-430. Assume a uniform integer distribution for
customer demand, and run parameterized simulations for different reservation limits.
Use 5,000 trials and 1 for random seed.
What is the number of reservations that will generate the least revenue?
A) 400
B) 410
C) 420
D) 430
Before launching a new line of toys, Toys Inc. used the method of historical analogy to
obtain a forecast. In this scenario, Toys Inc.:
A) noted the behavior of its current customers while they use their products.
B) used a panel of experts, whose identities were kept confidential from one another, to
respond to a sequence of questionnaires.
C) noted the consumer response to similar previous products to marketing campaigns
and used the responses as a basis to predict how the new marketing campaign might
fare.
D) used a brainstorming session among a group of experts to draw new ideas.
Below is the spreadsheet for an economic order quantity model.
Assume that the distribution of demand is normal with a mean of 20,000 and standard
deviation of 2,000.
Which of the following cells is defined as the uncertain output cell?
A) B13
B) C15
C) C19
D) B22
Fiberia Accessories, a clothing retailer, is planning to introduce a new line of sweaters
as part of the winter collection for $65 with an inventory of 1500. The main selling
season is 60 days between November and December. The store then sells the remaining
units in a clearance sale at 65 percent discount. Out of the 60 main retail days, Fiberia
sells the sweaters at full retail price for only 45 days, while giving a discount of 25
percent for the remaining 15 days. The demand functions a, and b are given as 79.5 and
1.1 respectively.
What is the average daily sale during the full retail sales period?
A) 15
B) 33.33
C) 8
D) 24.55
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%