Saint GBA334 midterm exam (2014)

Midterm Exam

Question 1. 1. Stating that two events are statistically independent means that the probability of one event occurring is independent of the probability of the other event having occurred. (Points : 2) True False

Question 2. 2. 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 are the total annual holding costs? (Points : 2) $500 $1000 $20 $750 $250

Question 3. 3. Consider a standard 52-card deck of cards. The probability of drawing either a seven or a black card is 7/13. (Points : 2) True False

Question 4. 4. Determining the worst payoff for each alternative and choosing the alternative with the “best of the worst” is the approach called: (Points : 2) maximax maximin Laplace minimax regret expected monetary value

Question 5. 5. Error is the difference in the actual value and the predicted value. (Points : 2) True False

Question 6. 6. 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: (Points : 2) Y = a + bX is a good forecasting method. Y= a + bX is not a good forecasting method. a multiple linear regression model is a good forecasting method for the data. a multiple linear regression model is not a good forecasting method for the data. none of the above.

Question 7. 7. A scatter diagram is a graphical depiction of the relationship between the dependent and independent variables. (Points : 2) True False

Question 8. 8. A discrete random variable has a mean of 400 and a variance of 64. What is the standard deviation? (Points : 2) 64 8 20 400 None of the above

Question 9. 9. If two events are mutually exclusive, then: (Points : 2) their probabilities can be added. they may also be collectively exhaustive. the joint probability is equal to 0. if one occurs, the other cannot occur. All of the above

Question 10. 10. Saying that a set of events is mutually exclusive and collectively exhaustive implies that one and only one of the events can occur on any trial. (Points : 2) True False

Question 11. 11. A seasonal index of __________ indicates that the season is average. (Points : 2) 10 100 0.5 0 1

Question 12. 12. The use of "expert opinion" is one way to approximate subjective probability values. (Points : 2) True False

Question 13. 13. All of the following are real computer applications that perform quantitative analysis except: (Points : 2) Solver in Excel. Goal Seek in Excel. Excel QM. POM-QM for Windows. QA for Windows.

Question 14. 14. 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? (Points : 2) 2 3 4 5 None of the above

Question 15. 15. Which Excel feature is an optimization technique that can maximize or minimize a quantity given a set of limitations or constraints? (Points : 2) Optimizer Goal Seek Analysis Tool-Pak Algorithm Builder Solver

Question 16. 16. Suppose that 10 golfers enter a tournament and that their respective skill levels are approximately the same. Six of the entrants are female and two of those are older than 40 years old. Three of the men are older than 40 years old. What is the probability that the winner will be a female who is older than 40 years old? (Points : 2) 0.000 1.100 0.198 0.200 0.900

Question 17. 17. Which of the following statement(s) is/are true regarding the advantages of mathematical modeling? (Points : 2) Models accurately represent reality. Models can help decision makers formulate problems. Models can save time. Models may be the only way to solve some large and complex problems in a timely manner. All of the above are true.

Question 18. 18. The classical method of determining probability is: (Points : 2) subjective probability. marginal probability. objective probability. joint probability. conditional probability.

Question 19. 19. Interviews, statistical sampling, and company reports provide input data for quantitative analysis models. (Points : 2) True False

Question 20. 20. 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 total cost of ordering and carrying sugar? (Points : 2) $50 $100 $25 $1000 $500

Question 21. 21. 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 yellow chip was drawn on the first draw. (Points : 2) 0.027 0.210 0.300 0.700

Question 22. 22. Suppose that we determine the probability of a warm winter based on the number of warm winters experienced over the past 10 years. In this case, we have used: (Points : 2) relative frequency the classical method the logical method subjective probability None of the above

Question 23. 23. 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 maximax criterion? (Points : 2) Buy 1 machine Buy 2 machines Buy 3 machines

Question 24. 24. 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 reorder point (ROP)? (Points : 2) 50 cones 100 cones 150 cones 200 cones

Question 25. 25. 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? (Points : 2) $103.3 $108.3 $120 $125 $145

Question 26. 26. A medium-term forecast is considered to cover what length of time? (Points : 2) 2-4 weeks 1 month to 1 year 2-4 years 5-10 years 20 years

Question 27. 27. What is the formula for the break-even point of a simple profit model? (Points : 2) 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) Fixed cost / (variable cost per unit — selling price per unit) Selling price per unit — (fixed cost / variable cost per unit)

Question 28. 28. A company is considering producing two new electronic games designed for the popular Gameboy toy. Based on market data, management believes there is a 60 percent chance that a “cops and robbers” game will be successful and a 40 percent chance that a “let's play house” game will be successful. As these products are completely different, it may be assumed that the success of one is totally independent of the success of the other. If two products are introduced to the market, what is the probability that both are successful? (Points : 2) 0.12 0.60 0.36 0.24 None of the above

Question 29. 29. Summing the error values in a regression model is misleading because negative errors cancel out positive errors. (Points : 2) True False

Question 30. 30. 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. (Points : 2) True False

Question 31. 31. Which of the following is a technique used to determine forecasting accuracy? (Points : 2) Exponential smoothing Moving average Regression Delphi method Mean absolute percent error

Question 32. 32. The economic order quantity (EOQ) formula assumes that all input data are known with certainty. (Points : 2) True False

Question 33. 33. 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 two personal computers? Hint: Let the probability of selling none equal x. (Points : 2) 0.24 0.27 0.3 0.33

Question 34. 34. A series of steps or procedures that are repeated is known as an algorithm. (Points : 2) True False

Question 35. 35. Model variables can be controllable or uncontrollable. (Points : 2) True False

Question 36. 36. In a good regression model, the residual plot shows: (Points : 2) a cone pattern. an arched pattern. a random pattern. an increasing pattern. a decreasing pattern.

Question 37. 37. 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 the second item will be defective? (Points : 2) 0.05 0.005 0.18 0.20 None of the above

Question 38. 38. 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 average inventory held in a given cycle? (Points : 2) 0 50 25 100 75

Question 39. 39. Mutually exclusive events exist if only one of the events can occur on any one trial. (Points : 2) True False

Question 40. 40. If the sale of ice cream and pizza are independent, then as ice cream sales decrease by 60 percent during the winter months, pizza sales will: (Points : 2) increase by 60 percent. increase by 40 percent. decrease by 60 percent. decrease by 40 percent. be unrelated.

Question 41. 41. In the exponential smoothing with trend adjustment forecasting method, missing something is the: (Points : 2) slope of the trend line. new forecast. Y-axis intercept. independent variable. trend smoothing constant.

Question 42. 42. Bob White is conducting research on monthly expenses for medical care, including over-the-counter medicine. His dependent variable is monthly expenses for medical care while his independent variable is number of family members. Below is his Excel output. Click here to view an Excel version of this output Referring to the information above, the significance F-test, is this model a good prediction equation? (Points : 2) Yes No

Question 43. 43. The probability, P, of any event or state of nature occurring is greater than or equal to 0 and less than or equal to 1. (Points : 2) True False

Question 44. 44. The coefficient of determination resulting from a particular regression analysis was 0.85. What was the slope of the regression line? (Points : 2) 0.85 -0.85 0.922 There is insufficient information to answer the question. None of the above

Question 45. 45. Enrollment in a particular class for the last four semesters has been 120, 126, 110, and 130 (listed from oldest to most recent). What is the enrollment forecast for next semester using exponential smoothing with an alpha = 0.2? Assume that an initial forecast for the first semester was 120 (so the forecast and the actual were the same). (Points : 2) 118.96 121.17 130 120 None of the above

Question 46. 46. Suppose that 10 golfers enter a tournament and that their respective skill levels are approximately the same. What is the probability that one of the first three golfers that registered for the tournament will win? (Points : 2) 0.100 0.001 0.300 0.299 0.700

Question 47. 47. A medium-term forecast typically covers a two- to four-year time horizon. (Points : 2) True False

Question 48. 48. 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? (Points : 2) 0 0.023 0.159 0.977 None of the above

Question 49. 49. As one increases the number of periods used in the calculation of a moving average: (Points : 2) greater emphasis is placed on more recent data. less emphasis is placed on more recent data. the emphasis placed on more recent data remains the same. it requires a computer to automate the calculations. one is usually looking for a long-term prediction.

Question 50. 50. The number of cars passing through an intersection in the next five minutes can usually be described by the: (Points : 2) normal distribution. uniform distribution. exponential distribution. Poisson distribution. None of the above