Question 1

Daily demand for newspapers for the last 10 days has been as follows: 12, 13, 16, 15, 12, 18, 14, 12, 13, 15 (listed from oldest to most recent). What are the forecast sales for the next day using a three-day weighted moving average where the weights are 3, 1, and 1 (the highest weight is for the most recent number)?

Question 1 options:

13.0

70.0

14.0

12.8

None of the above

Question 2

A seasonal index of __________ indicates that the season is average.

Question 2 options:

100

1

0.5

0

10

Question 3

Which Excel feature is an optimization technique that can maximize or minimize a quantity given a set of limitations or constraints?

Question 3 options:

Optimizer

Analysis Tool-Pak

Solver

Algorithm Builder

Goal Seek

Question 4

Which of the following is not classified as a qualitative forecasting model?

Question 4 options:

Exponential smoothing

Delphi method

Consumer market survey

Sales force composite

Jury of executive opinion

Question 5

A plant manager is considering buying additional stamping machines to accommodate increasing demand. The alternatives are to buy 1 machine, 2 machines, or 3 machines. The profits realized under each alternative are a function of whether their bid for a recent defense contract is accepted or not. The payoff table below illustrates the profits realized (in $000's) based on the different scenarios faced by the manager.

Alternative Bid Accepted Bid Rejected

Buy 1 machine $10 $5

Buy 2 machines $30 $4

Buy 3 machines $40 $2

Using the information above, which alternative should be chosen based on the maximin criterion?

Question 5 options:

Buy 2 machines

Buy 3 machines

Buy 1 machine

Question 6

Our department store is having a sale on personal computers, of which three are in stock (no rain checks). There is a certain probability of selling none. The probability of selling one is twice as great as the probability of selling none. The probability of selling two is three times the probability of selling none. Finally, the probability of selling all the personal computers is four times as great as the probability of selling none.

Using the above information, what is the probability of selling all three personal computers? Hint: Let the probability of selling none equal x.

Question 6 options:

0.32

0.4

0.44

0.36

Question 7

Mutually exclusive events exist if only one of the events can occur on any one trial.

Question 7 options:

True

False

Question 8

Which of the following is not a common pitfall of regression?

Question 8 options:

Using a regression equation beyond the range of X is very questionable.

If the assumptions are not met, the statistical tests may not be valid.

Two variables may be highly correlated to one another but one is not causing the other to change.

Concluding that a statistically significant relationship implies practical value.

Nonlinear relationships cannot be incorporated.

Question 9

Consider the following gasoline data:

Quarter Year 1 Year 2 Average two-year demand Quarterly

demand

Average

seasonal index

1 150 156 153 164.25 .932

2 140 148 144 164.25 .877

3 185 201 193 164.25 1.175

4 160 174 167 164.25 1.017

Referring to the information above, suppose we expect year 3 to have annual demand of 800. What is the forecast value for the second quarter in year 3?

Question 9 options:

186.00

182.64

175.34

175.00

Question 10

A large school district is reevaluating its teachers' salaries. They have decided to use regression analysis to predict mean teachers' salaries at each elementary school. The researcher uses years of experience to predict salary. The resulting regression equation was:

Y = 24,266.98 + 1,289.10X, where Y = salary, X = years of experience

Assume a teacher has five years of experience. What is the forecasted salary?

Question 10 options:

$31,688.88

$29,688.28

$29,712.08

$30,712.48

Question 11

The number of cell phone minutes used by high school seniors follows a normal distribution with a mean of 500 and a standard deviation of 50. What is the probability that a student uses fewer than 400 minutes?

Question 11 options:

None of the above

0.023

0

0.159

0.977

Question 12

A controllable variable is also called:

Question 12 options:

a measurable quantity.

a parameter.

a decision variable.

none of the above.

a mathematical model.

Question 13

A medium-term forecast is considered to cover what length of time?

Question 13 options:

5-10 years

20 years

1 month to 1 year

2-4 weeks

2-4 years

Question 14

A medium-term forecast typically covers a two- to four-year time horizon.

Question 14 options:

True

False

Question 15

Determining the best payoff for each alternative and choosing the alternative with the “best of the best” is the approach called:

Question 15 options:

expected monetary value

Laplace

maximax

maximin

minimax regret

Question 16

A plant manager is considering buying additional stamping machines to accommodate increasing demand. The alternatives are to buy 1 machine, 2 machines, or 3 machines. The profits realized under each alternative are a function of whether their bid for a recent defense contract is accepted or not. The payoff table below illustrates the profits realized (in $000's) based on the different scenarios faced by the manager.

Alternative Bid Accepted Bid Rejected

Buy 1 machine $10 $5

Buy 2 machines $30 $4

Buy 3 machines $40 $2

Using the information above, which alternative should be chosen based on the minimax regret criterion?

Question 16 options:

Buy 2 machines

Buy 3 machines

Buy 1 machine

Question 17

An urn contains seven blue and three yellow chips. If the drawing of chips is done with replacement, what is the probability of drawing a blue chip on the second draw given that a yellow chip was drawn on the first draw?

Question 17 options:

0.700

0.300

0.027

0.210

Question 18

Consider the following gasoline data:

Referring to the information above, what is the seasonal index for fourth quarter?

Question 18 options:

.899

.977

1.175

1.017

Question 19

A prediction equation for sales and payroll was performed using simple linear regression. In the regression printout shown below, which of the following statements is not true?

Question 19 options:

Payroll is not a good predictor of Sales based on α = 0.01.

Payroll is the independent variable.

The coefficient of determination is equal to 0.833333.

Payroll is a good predictor of Sales based on α = 0.05.

There is evidence of a positive linear relationship between Sales and Payroll based on α = 0.05.

Question 20

As one increases the number of periods used in the calculation of a moving average:

Question 20 options:

it requires a computer to automate the calculations.

the emphasis placed on more recent data remains the same.

less emphasis is placed on more recent data.

greater emphasis is placed on more recent data.

one is usually looking for a long-term prediction.

Question 21

If we roll a single die twice, the probability that the sum of the dots showing on the two rolls equals four (4), is 1/6.

Question 21 options:

True

False

Question 22

A local ice cream shop sells 10,000 cones of vanilla-flavored ice cream each year. The cones are ordered from an outside supplier and it takes 5 days for each shipment of cones to arrive. Ordering costs are estimated at $15 per order. Carrying costs are $5 per cone per year. Assume that the ice cream shop is open 250 days a year. What is the total cost of ordering and carrying the ice cream cones?

Question 22 options:

$2,121.32

$612.37

$1,224.74

$707.11

Question 23

What is the formula for the break-even point of a simple profit model?

Question 23 options:

Selling price per unit — (fixed cost / variable cost per unit)

Fixed cost / (variable cost per unit — selling price per unit)

Fixed cost / variable cost per unit

(Selling price per unit — variable cost per unit) / fixed cost

Fixed cost / (selling price per unit — variable cost per unit)

Question 24

Consider the following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature S1, S2, and S3.

S1 S2 S3

A $60 $145 $120

B $75 $125 $110

C $95 $85 $130

Refer to the payoff table. What is the expected value under certainty? Assume P(S1) = 0.5 and P(S2) = 0.25.

Question 24 options:

$116.25

$101.25

$108.33

$103.33

$136.25

Question 25

The most common quantitative causal model is regression analysis.

Question 25 options:

True

False

Question 26

Suppose that you believe that a cubic relationship exists between the independent variable X (of time) and the dependent variable Y. Which of the following would represent a valid linear regression model?

Question 26 options:

Y = b0 + 3b1 X, where X = time

Y = b0 + b1 X, where X = time3

Y = b0 + b1 X3, where X = time

Y = b0 + 3b1 X, where X = time3

Y = b0 + b1 X, where X = time1/3

Question 27

What is the correct equation for computing the expected value of perfect information (EVPI)?

Question 27 options:

EVPI = expected value under certainty - expected value under risk for best alternative.

EVPI = expected value with sample information - expected value without sample information.

EVPI = expected value under risk for best alternative - expected value under certainty.

EVPI = expected value without sample information - expected value with sample information.

None of the above

Question 28

A plant manager is considering buying additional stamping machines to accommodate increasing demand. The alternatives are to buy 1 machine, 2 machines, or 3 machines. The profits realized under each alternative are a function of whether their bid for a recent defense contract is accepted or not. The payoff table below illustrates the profits realized (in $000's) based on the different scenarios faced by the manager.

Alternative Bid Accepted Bid Rejected

Buy 1 machine $10 $5

Buy 2 machines $30 $4

Buy 3 machines $40 $2

Refer to the information above. Assume that based on historical bids with the defense contractor, the plant manager believes that there is a 65% chance that the bid will be accepted and a 35% chance that the bid will be rejected.

What is the expected value under certainty?

Question 28 options:

1.95

1.05

27.75

17.25

Question 29

Suppose that you enter a drawing by obtaining one of 20 tickets that have been distributed. By using the classical method, you can determine that the probability of your winning the drawing is 0.05.

Question 29 options:

True

False

Question 30

Model variables can be controllable or uncontrollable.

Question 30 options:

True

False

uestion 31

If computing a causal linear regression model of Y = a + bX and the resultant r2 is very near zero, then one would be able to conclude that:

Question 31 options:

a multiple linear regression model is a good forecasting method for the data.

Y = a + bX is not a good forecasting method.

a multiple linear regression model is not a good forecasting method for the data.

Y = a + bX is a good forecasting method.

none of the above.

Question 32

The number of phone calls coming into a switchboard in the next five minutes will either be 0, 1, 2, 3, 4, 5, or 6. The probabilities are the same for each of these (1/7). If X is the number of calls arriving in a five-minute time period, what is the mean of X?

Question 32 options:

4

5

3

2

None of the above

Question 33

The economic order quantity (EOQ) formula assumes that all input data are known with certainty.

Question 33 options:

True

False

Question 34

The coefficient of determination resulting from a particular regression analysis was 0.85. What was the slope of the regression line?

Question 34 options:

-0.85

There is insufficient information to answer the question.

0.922

0.85

None of the above

Question 35

A bakery buys sugar in 15-pound bags. The bakery uses 5000 bags of sugar each year. Carrying costs are $20 per bag per year. Ordering costs are estimated at $5 per order. Assume that the bakery is open 250 days a year and its daily demand is estimated at 20 bags. It takes 5 days for each order of sugar to be filled. What is the minimum inventory held in a given EOQ cycle?

Question 35 options:

0 bags

100 bags

2500 bags

50 bags

25 bags

Question 36

Decision variables may also be called parameters.

Question 36 options:

True

False

Question 37

Consider the following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature S1, S2, and S3.

S1 S2 S3

A $60 $145 $120

B $75 $125 $110

C $95 $85 $130

Refer to the payoff table. Using the Laplace criterion, what would be the highest expected payoff?

Question 37 options:

$145

$125

$108.3

$120

$103.3

Question 38

A local ice cream shop sells 10,000 cones of vanilla-flavored ice cream each year. The cones are ordered from an outside supplier and it takes 5 days for each shipment of cones to arrive. Ordering costs are estimated at $15 per order. Carrying costs are $5 per cone per year. Assume that the ice cream shop is open 250 days a year. What is the average inventory of cones held in a given ordering cycle?

Question 38 options:

122.47

244.95

141.42

70.71

Question 39

A scatter diagram is useful to determine if a relationship exists between two variables.

Question 39 options:

True

False

Question 40

An urn contains seven blue and three yellow chips. If the drawing of chips is done with replacement, what is the probability of drawing a yellow chip on the second draw given that a blue chip was drawn on the first draw.

Question 40 options:

0.210

0.027

0.700

0.300

Question 41

Arrivals in a university advising office during the week of registration are known to follow a Poisson distribution with an average of four people arriving each hour. What is the probability that exactly four people will arrive in the next hour?

Question 41 options:

0.1923

0.1813

0.1865

0.1954

P(X=4) = 0.1954

Question 42

Models that do not involve risk or chance are __________.

Question 42 options:

None of the above

probabilistic models

postoptimality models

deterministic models

MIS models

Question 43

If two events are mutually exclusive, the probability of both events occurring is simply the sum of the individual probabilities.

Question 43 options:

True

False

Question 44

The equation P(A|B) = P(AB)/P(B) is:

Question 44 options:

only relevant when events A and B are collectively exhaustive.

the formula for a conditional probability.

none of the above

the formula for a joint probability.

the marginal probability.

Question 45

Daily demand for newspapers for the last 10 days has been as follows: 12, 13, 16, 15, 12, 18, 14, 12, 13, 15 (listed from oldest to most recent). What are the forecast sales for the next day using a two-day moving average?

Question 45 options:

15

28

14

13

12.5

Question 46

Which of the following is not a caution/pitfall of regression?

Question 46 options:

Correlation does not necessarily mean causation.

Interpretation inside the range of X values is questionable.

If the assumptions are not met, the statistical test may not be valid.

Using the F-test and concluding a linear relationship is helpful in predicting Y does not mean that this is the best relationship.

Question 47

A production process is known to produce a particular item in such a way that five percent of these are defective. If two items are randomly selected as they come off the production line, what is the probability that both are defective (assuming that they are independent)?

Question 47 options:

0.0025

0.0250

0.1000

0.2000

0.0100

Question 48

The expected value of a probability distribution is:

Question 48 options:

the average value of the distribution.

the variance of the distribution.

the range of continuous values from point A to point B, inclusive.

the measure of the spread of the distribution.

the probability density function.

Question 49

Which of the following terms is interchangeable with quantitative analysis?

Question 49 options:

Economics

Statistics

None of the above

Management science

Financial analysis

Question 50

The number of cars passing through an intersection in the next five minutes can usually be described by the:

Question 50 options:

exponential distribution.

uniform distribution.

Poisson distribution.

None of the above

normal distribution.

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- Course: Marketing & Management
- Subject: Saint GBA334 Midterm Exam Latest 2018
- Subject code: Saint GBA334 Midterm Exam Latest 2018
- Date of exam: 09/04/2018
- Year of study: 2018
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