Part V: Selected Topics in Decision Making – Test B Name__________________
Chapter 20: Write hypotheses for the one-way ANOVA.
1. Data were analyzed to see if income level (1 = Low, 2 = Middle, 3 = High) influence
the amount consumers spend online for holiday shopping. The null hypothesis is
A. Mean amounts spent for online purchases during the most recent holiday are equal
across the three different income levels.
B. Mean amounts spent for online purchases during the most recent holiday are not
all equal across the three different income levels.
C. Level of income does affect the amount spent for online purchases.
D. Both A and C.
E. Both B and C.
Chapter 20: Analyze the one-way ANOVA.
2. Data were analyzed to see if income level (1 = Low, 2 = Middle, 3 = High) influence
the amount consumers spend online for holiday shopping. Based on the ANOVA
results shown below, the F statistic value is
One-way ANOVA: Online $ versus Income Level
Source DF SS MS F P
Income Level 2 10377 5189
Error 27 3924 145
Total 29 14301
A. F = 0.500
B. F = 2.644
C. F = 35.79
D. F = 145
E. None of the above
Chapter 20: Analyze the one-way ANOVA.
3. Data were analyzed to see if income level (1 = Low, 2 = Middle, 3 = High) influence
the amount consumers spend online for holiday shopping. ANOVA results yield an F
statistic with an associated P-value of < .001. Therefore, at α = .05 we
A. fail to reject the null hypothesis.
B. reject the null hypothesis.
C. conclude that mean amounts spent for online purchases during the most recent
holiday are all equal across the different income levels.
D. Both A and C.
E. Both B and C.
VB-2 Part V: Selected Topics in Decision Making
Chapter 20: Analyze multifactor designs.
4. A company that processes wheat varies the milling time (short, medium and long) and
bleaching (no bleaching and bleaching) and measure fiber content (gms/100 grams)
of the resulting wheat product to determine the best combination for a desirable wheat
product. According to ANOVA results below, the F statistic for testing whether
bleaching has an effect on fiber content is
Two-way ANOVA: Fiber (gms) versus Bleaching, Milling
Source DF SS MS F P
Beaching 1 7.3472 7.34722
Milling 2 16.2233 8.11167
Interaction 2 1.6944 0.84722
Error 12 5.1200 0.42667
Total 17 30.3850
A. 1.43
B. 1.99
C. 17.22
D. 19.01
E. 45.22
Chapter 20: Analyze multifactor designs.
5. A company that processes wheat varies the milling time (short, medium and long) and
bleaching (no bleaching and bleaching) and measure fiber content (gms/100 grams)
of the resulting wheat product to determine the best combination for a desirable wheat
product. According to ANOVA results below, the F statistic for testing whether
milling has an effect on fiber content is
Two-way ANOVA: Fiber (gms) versus Bleaching, Milling
Source DF SS MS F P
Beaching 1 7.3472 7.34722
Milling 2 16.2233 8.11167
Interaction 2 1.6944 0.84722
Error 12 5.1200 0.42667
Total 17 30.3850
A. 1.43
B. 1.99
C. 17.22
D. 19.01
E. 45.22
Test B VB-3
Chapter 20: Analyze multifactor designs.
6. A company that processes wheat varies the milling time (short, medium and long) and
bleaching (no bleaching and bleaching) and measure fiber content (gms/100 grams)
of the resulting wheat product to determine the best combination for a desirable wheat
product. Suppose the P-value associated with the F statistic for the interaction effect
is 0.180. Based on this we can conclude that
A. There is a significant interaction effect.
B. There is not a significant interaction effect.
C. It is appropriate to interpret the main effects on fiber content due to milling and
bleaching separately.
D. Both A and B
E. Both B and C
Chapter 20: Recognize different types of studies.
7. A company that processes wheat varies the milling time (short, medium and long) and
bleaching (no bleaching and bleaching) and measure fiber content (gms/100 grams)
of the resulting wheat product to determine the best combination for a desirable wheat
product. Which of the following is true about this study?
A. It is an observational study.
B. It is a completely randomized design in one factor.
C. The different levels of milling time act as blocks in the design.
D. It is an experimental study.
E. The different level of bleaching act as blocks in the design.
Chapter 21: Identify the appropriate control chart for attributes data.
8. Suppose that a textile manufacturer finds is an average of 5.5 defects per 100 square
foot sections of carpet as part of its quality assurance program. An appropriate
control chart to use for these data is the
A. p chart
B. c chart
C. x-bar and r chart
D. Pareto chart
E. ARL chart
VB-4 Part V: Selected Topics in Decision Making
Chapter 21: Create c-charts.
9. Suppose that a textile manufacturer finds is an average of 5.5 defects per 100 square
foot sections of carpet as part of its quality assurance program. The lower and upper
control limits for the appropriate control chart for these data are
A. 0 and 7.688
B. 0 and 10.986
C. 0 and 12.536
D. 2.0 and 9.0
E. 2.567 and 12.536
Chapter 21: Identify the appropriate control chart for attributes data.
10. Suppose that over the last 20 weeks, a law firm had a total of 1045 consultation calls,
and that 126 of them did not get an appointment for an initial consult within 24 hours.
An appropriate control chart to use for these data is the
A. p chart
B. c chart
C. x-bar and r chart
D. Pareto chart
E. ARL chart
Chapter 21: Create p-charts.
11. Suppose that over the last 20 weeks, a law firm had a total of 1045 consultation calls,
and that 126 of them did not get an appointment for an initial consult within 24 hours.
The centerline on the appropriate control chart for these data is
A. 0.006
B. 0.098
C. 0.121
D. 0.223
E. 0.412
Test B VB-5
Chapter 21: Create p-charts.
12. Suppose that over the last 20 weeks, a law firm had a total of 1045 consultation calls,
and that 126 of them did not get an appointment for an initial consult within 24 hours.
The lower and upper control limits on the appropriate control chart for these data are
A. 0.091 and 0.151
B. 0 and 0.124
C. 0 and 0.342
D. 0.184 and 0.262
E. 0.366 and 0.458
Chapter 21: Estimate the process standard deviation.
13. A manufacturer of solid wood cabinetry requires that its lumber has moisture content
(MC) between 5% and 9%. Twenty-five subgroups, each consisting of six pieces of
lumber, yield an average MC of 6.95% and an average range of 2.2%. The estimated
process standard deviation (
ˆ) is
A. 0.18%
B. 0.87%
C. 1.22%
D. 2.2%
E. 2.74%
Chapter 21: Compute process capability indices.
14. A manufacturer of solid wood cabinetry requires that its lumber has moisture content
(MC) between 5% and 9%. Twenty-five subgroups, each consisting of six pieces of
lumber, yield an average MC of 6.95% and an average range of 2.2%. What is the
Cpk index?
A. 0.37
B. 0.75
C. 1.53
D. 1.99
E. 2.67
VB-6 Part V: Selected Topics in Decision Making
Chapter 22: Apply the Wilcoxon Rank-Sum/ Mann-Whitney test.
15. As a preliminary step in its product testing, a fast food chain has two small groups (4
teenagers, 6 older adults) sample the item and “grade” it on “taste.” Ratings were
grades A to C (including + and -). What nonparametric method is appropriate to
determine if the two groups differ in opinion?
A. Wilcoxon Rank-Sum
B. Wilcoxon Signed-Rank
C. Spearman’s rho
D. Kruskal Wallis
E. Kendall’s tau
Chapter 22: Apply the Wilcoxon Rank-Sum/ Mann-Whitney test.
16. As a preliminary step in its product testing, a fast food chain has two small groups (4
teenagers, 6 older adults) sample the item and “grade” it on “taste.” According to the
data below, what is the value of an appropriate nonparametric test statistic to
determine if the two groups differ in opinion?
A. 9
B. 10
C. 11
D. 12
E. 13
Chapter 22: Understand nonparametric methods.
17. The nonparametric alternative to the paired t–test is the
A. Kruskal-Wallis test.
B. Kendall’s tau.
C. Wilcoxon Rank Sum test.
D. Friedman test.
E. Wilcoxon Signed Rank test.
Chapter 22: Apply the Kruskal-Wallis test.
18. The effectiveness of three brands of stain remover (EZ-Clean, SpotX, and
OXYBoost) were rated (A = excellent to F = poor) by different groups of consumers.
The appropriate nonparametric procedure to use to determine whether there
differences in the perceived effectiveness among the three brands?
A. Wilcoxon Signed-Rank test.
B. Wilcoxon Rank Sum test.
C. Kruskal Wallis test.
D. Spearman’s rho.
E. Mann-Whitney test.
Teens Older
Adults
A- C
A B+
B+ B-
B+ C+
C+
B-
Test B VB-7
Chapter 22: Apply the Kruskal-Wallis test.
19. The effectiveness of three brands of stain remover (EZ-Clean, SpotX, and
OXYBoost) were rated (A = excellent to F = poor) by different groups of consumers.
The calculated value of the statistic for the appropriate nonparametric test is
A. 2.67
B. 5.62
C. 9.12
D. 11.4
E. 12.0
Chapter 22: Apply the Kruskal-Wallis test.
20. The effectiveness of three brands of stain remover (EZ-Clean, SpotX, and
OXYBoost) were rated (A = excellent to F = poor) by different groups of consumers.
Suppose the appropriate nonparametric test statistic has a P-value of 0.06. At α =
0.05, we should
A. reject the null hypothesis.
B. not reject the null hypothesis.
C. conclude that the groups are all the same.
D. both A and C.
E. both B and C.
Chapter 23: Use a payoff table or decision tree.
21. Estimated profits for an investor would depend on how successful a bailout bill would
be in helping the U.S. economy. The estimated annual return for two different
investment strategies are shown in the following table. Using the maximax approach,
the investor should choose
A. 20% stocks 80% bonds
B. 80% stocks 20% bonds
C. 20% stocks 80% bonds if the economy rebounds
D. 80% stocks 20% bonds if the economy declines
E. To put her money in her mattress
EZ-Clean SpotX OXYBoost
C+ B+ B+
C- A- A-
A- B A
C- C+ B+
B- A- A
Economy Post Bailout
Economy
Declines
No
Change
Economy
Rebounds
Action
20% stocks / 80% bonds -$2200 $1500 $2500
80% stocks / 20% bonds -$4000 -$500 $6000
VB-8 Part V: Selected Topics in Decision Making
Chapter 23: Find the expected value of an action.
22. Estimated profits for an investor would depend on how successful a bailout bill would
be in helping the U.S. economy. The estimated annual return for two different
investment strategies are shown in the following table. If there is a 30% chance that
the economy will decline, 50% that there will be no change and 20% chance that it
will rebound, the expected value associated with the best investment strategy is
A. -$250
B. -$450
C. $590
D. $700
E. $1290
Chapter 23: Find the expected value with perfect information.
23. Estimated profits for an investor would depend on how successful a bailout bill would
be in helping the U.S. economy. The estimated annual return for two different
investment strategies are shown in the following table. If there is a 30% chance that
the economy will decline, 50% that there will be no change and 20% chance that it
will rebound, the expected value with perfect information is
A. -$250
B. -$450
C. $590
D. $700
E. $1290
Economy Post Bailout
Economy
Declines
No
Change
Economy
Rebounds
Action
20% stocks / 80% bonds -$2200 $1500 $2500
80% stocks / 20% bonds -$4000 -$500 $6000
Economy Post Bailout
Economy
Declines
No
Change
Economy
Rebounds
Action
20% stocks / 80% bonds -$2200 $1500 $2500
80% stocks / 20% bonds -$4000 -$500 $6000
Test B VB-9
Chapter 23: Find expected values, standard deviations and return to risk ratios.
24. Estimated profits for an investor would depend on how successful a bailout bill would
be in helping the U.S. economy. The estimated annual return for two different
investment strategies are shown in the following table. If there is a 30% chance that
the economy will decline, 50% that there will be no change and 20% chance that it
will rebound, the standard deviation associated with the investment strategy of
allocating 80% to stocks and 20% to bonds is
A. $1782
B. $2245
C. $2567
D. $3473
E. $4500
Chapter 24: Recognize types of data in data warehouses
25. In data mining, which of the following is an example of a transactional variable?
A. Household income
B. Occupation
C. Age
D. Annual charitable donations
E. Number of children in household
Economy Post Bailout
Economy
Declines
No
Change
Economy
Rebounds
Action
20% stocks / 80% bonds -$2200 $1500 $2500
80% stocks / 20% bonds -$4000 -$500 $6000
VB-10 Part V: Selected Topics in Decision Making
Business Statistics: Part V: Selected Topics in Decision Making – Test B – Key