DATA DRIVEN DECISION
Cluster analysis sorts data points into ___________ and is often used in studying market ____________.
"natural" groups, demographics.
GIGO
("garbage in, garbage out") means that if your input is incorrect, your output is worthless.
The strongest relationship between variables is represented by which of the following numbers?
-0.99
There is an 80 percent chance of snow. If it snows there is a 10 percent chance of Todd walking to the store. If it doesn't snow there is a 60 percent chance of Todd walking to the store. What is the likelihood that it will not snow and Todd will walk to the store?
0.12 The probability of no snow is 20 percent ( P(no snow)=0.20 ), and the probability of Todd walking to the store with no snow is 60 percent ( P(walk|no snow)=0.60 ). Therefore to determine the likelihood of it not snowing and Todd walking to the store, these probabilities are multiplied together. Therefore P(no snow∩walk)=P(no snow)×P(walk|no snow)= 0.20×0.60=0.12=12%
There is a 90 percent chance that a package will arrive within three days of when it was shipped. Also, there is a 75 percent chance that it will get wet. There is a 70 percent chance that it will get wet and will be delivered within three days. What is the likelihood that at least one of these events occurs?
0.95 =0.90+0.75−0.70=0.95=95%
There are six toll booths to enter the highway. What probability does each toll booth worker have of getting the next customer?
1 customer and 6 booths = 1/6 or 16.7%
A city hospital wishes to evaluate the labor hours it needs based upon monthly occupied bed days and average length of patients' stay. The estimated regression is: y = 2000 + 75X1 + 65X2 What scenario would be predicted if X1 = 500 and X2 = 1000?
104,500
Given the following data set: 9 12 14 10 8 11 12 What is the mode?
12 The mode of a data set is the number that occurs most frequently in the set. To easily find the mode, put the numbers in order from least to greatest and count how many times each number occurs. The number that occurs the most is the mode!
A regional grocery chain measures the increase in prices by tracking the price of milk, eggs, white bread, and ground beef using the year 2005 as a base. The sum of these items in 2005 was $10.00 and the sum of the prices in 2015 was $14.50. What is the simple composite index for these items?
145
There is a 20 percent chance that Charlie's company will merge with another company. If there is a merger, there is an 80 percent chance Charlie will have to fire three people from his team. There is a 15 percent chance Charlie will have to fire three people from his team no matter what. What is the likelihood there will be a merger, and Charlie will have to fire three people from his team?
16%
A company predicts 300 people to make purchases this year on Black Friday. The total number is actually 282. What is the variance? And is it favorable or unfavorable?
18, unfavorable
A company predicts a 4 percent gain in customer visits. There is an actual gain of 6 percent in customer satisfaction. What is the variance?
2 percent
What percent of the data in a normal distribution is between the mean and two standard deviations above the mean?
47.7 percent
If Katy's test score was in the 25th percentile for a class of 20 students, how many students scored below Katy?
5
In a normal distribution, approximately what percentage of data points in a dataset will be within one standard deviation of the mean?
68.3
Determine the Mean, Median, and Mode (in that order) from the following test results. 23, 54, 67, 71, 72, 74, 74, 75, 77, 77, 77, 78, 80, 81, 81, 83, 84, 86, 89, 89, 89, 89, 95, 99, 100
78.56, 80, 89
What percent of quality problems does Ishikawa claim the seven tools can solve?
90% - 95%
The Pareto Chart
A Pareto chart* is a bar chart that sorts data into categories, then prioritizes those categories to help project teams identify the most significant factors or the biggest contributors to problems. By focusing on the factors that contribute the most to problems, practitioners can make quick and meaningful improvements to processes and work. The Pareto chart is based on the 80/20 rule*, which states that 80% of quality management problems are the result of a small number (about 20%) of causes. By concentrating your efforts to fix these "vital few" causes, you can quickly produce the greatest impact on work in the most cost-effective way possible.
Balanced Scorecard
A balanced scorecard* (BSC) measures an organization's performance on a balanced mix of both financial and non-financial measures. The purpose of the balanced scorecard is to include in a company's goals some objectives that may not affect the company's current financial performance but do affect the company's long-term performance.
The Cause-and-effect Diagram
A cause-and-effect diagram* helps project participants systematically uncover sources of problems so they can be examined for similarities and correlations that point to the fundamental reason(s) for the problem. It creates a hierarchy of the primary and underlying factors that cause an event or problem, allowing teams to drill down to find the problem's root cause.
Item Response Theory
A coach gives his player a challenge to run around 6 cones in a certain amount of time. The player easily succeeds at this challenge. The coach then adds 4 cones and tells the player to try the new challenge in the same amount of time.
The Control Chart
A control chart* is a modified run chart—it shows the performance of a process over time, but it also includes limits or constraints that a process should not exceed
what is a flowchart used for
A flowchart is a type of diagram that represents an algorithm, workflow or process. The flowchart shows the steps as boxes of various kinds, and their order by connecting the boxes with arrows. This diagrammatic representation illustrates a solution model to a given problem.
Which of the following tools is not used to evaluate numerical data?
A flowchart shows the sequence of steps that make up a process—it does not contain numerical information.
The Flowchart
A flowchart* is a graphic representation of the steps that make up a process. By seeing how all of the parts of a process connect and fit together, practitioners can identify redundancies and problem areas in their work and develop plans to correct them.
Which two examples exhibit appropriate use of performance measures in business?
A hospital measure Emergency Room response time for improvement Nonprofit analyze expenses to increase the percent of funds donated
Linear Regression
A linear relationship between two variables can be measured by its strength. A strong linear relationship indicates that the data will bunch around a straight line, while a weak linear relationship does not.
What is a disadvantage of a using net promoter score in an organization?
A net promoter score system does not determine the area of dissatisfaction.
what is a run chart used for
A run chart is a line graph of data plotted over time. By collecting and charting data over time, you can find trends or patterns in the process. Because they do not use control limits, run charts cannot tell you if a process is stable. However, they can show you how the process is running.
The Run Chart
A run chart* is a simple way to illustrate performance measurements over a period of time. Team members collect measurements and plot them as data points on a graph, then connect the points to shows trends or aberrations in performance. These trends or aberrations can be investigated to see if corrective action needs to be taken to address root causes or problems
probability distributions
A set of probabilities that are attached to the different possible outcomes in a survey, experiment, or procedure
z-score
A statistical measure that indicates the number of standard deviations a data point is from its mean
A nonprofit organization ran an e-mail campaign with three different messages to solicit additional donations. What should the nonprofit organization use to determine if the average donation differs for the different messages?
ANOVA
Compare outcomes of different drug testing results
ANOVA
Used to compare the mean of three or more groups
ANOVA
"Where you enact the change on a larger scale, making it a part of normal operations." This is which step in the PDCA cycle?
Act
How do you determine the early finish date for an activity in a network diagram
Add the duration of the activity to the early start date.
Use this rule when looking for one or the other event happening (OR)
Addition
mean
An average, calculated by adding a series of elements in a data set together and dividing by the total number in the series
Observational studies*
An observational study is sometimes used because it is impractical or impossible to control the conditions of the study. Mystery shopping is an example of an observational study that is employed in the retail industry. The "mystery shopper," whose identity is unknown to the staff of a retail store, will shop or perform other tasks, and report the results
Quality Control vs Quality Assurance purpose
Assess performance and recommend corrective action Assess capability and recommend preventive action Control is reactive while assurance is proactive
Mr. Wonka notices that the last twenty times he invented a new chocolate candy, his major competitors, Count Chocula, and the Easter Bunny, have big sales in late October. Mr. Wonka feels directly responsible for the profit of his competitors. What is the flaw in this experiment?
Association vs. Causation Mr. Wonka's inventive ways are probably not the cause of increased chocolate candy sales for his competitors at the end of October like Mr. Wonka has concluded.
A company uses time series analysis to develop its product forecast. The forecaster uses simple linear regression but notices that the past data trend is aligned with advertising expenditures. What issue might exist with this regression analysis?
Autocorrelation
Which of the following could be an appropriate key performance indicator (KPI)?
Average quarterly sales
An Organization seeks to shift its business strategy to development of new products for the future while still growing sales of its current products. Which tool could help the company focus on both its financial objective and growth of new products?
Balanced Scorecard
Which approach uses financial, customer, internal business processes, and innovation/learning measures?
Balanced scorecard
Used to study the composition of a data set and examine the distribution
Box Plot
Which of the following is NOT one of the four main perspectives examined by the balanced scorecard?
Branding is not one of the four main perspectives examined by the balanced scorecard. Although allocation of resources is an important performance measure, the four broad categories used in a balanced scorecard system are customers, innovation and learning, financials, and internal business processes.
How can organizations implement an effective performance management evaluation system?
By establishing a balanced scorecard
A county government wishes to convert government vehicles from gasoline to natural gas. How can the county evaluate the effectiveness of the conversion?
By estimating the payback period
In what way does probability theory inform decision-making for managers?
By quantifying risk
Hector has asked his team to collect data to show when and where defects occur. Now he is having problems compiling the information because the people on his team all decided to collect the data in different ways. What tool should Hector have asked his team to use to make this process easier to manage?
Check sheets would have provided a structured and standardized way for Hector's team to collect and present data.
Which analysis technique can be used with hypothesis testing when nominal or categorical data is gathered?
Chi-square
A researcher is evaluating voter turnout based upon age and location of voting precincts. Which analysis technique should she use?
Cluster Analysis
what is a cluster analysis used for used for
Cluster analysis is for example used to identify groups of schools or students with similar properties. From poll data, projects such as those undertaken by the Pew Research Center use cluster analysis to discern typologies of opinions, habits, and demographics that may be useful in politics and marketing.
A healthcare study follows a particular sample over time to identify how the health habits of teenagers impact their likelihood of acquiring various diseases later in their life in the hope that the healthcare organization will be able to create early prevention programs. Which type of research design does this study describe?
Cohort study
Which one of the following is not an example of big data?
Company total sales in the last quarter
Bias introduced because respondents believe it will be beneficial if selected.
Conscious bias
There are four main types of validity
Construct validity, content validity, internal validity, and statistical validity.
Monitor production process
Control charts
Where would you find control limits?
Control limits are the maximum value (the upper control limit) and the minimum value (the lower control limit) that the process should perform within. A control chart displays the process performance as well as the control limits.
occurs when there is a one-time unusual measurement in a process
Correct Answer: irregularity
The town council of a beach town is studying whether to dredge the canals of an ocean front community that were filled with sand during a hurricane. What analytic method can the council apply to this issue?
Cost-benefit analysis
At WGU, students take objective assessments to evaluate a student's knowledge of predetermined course competencies in relation to a cut score. What type of test is the objective assessment?
Criterion-referenced
Ski Boards, Inc. wants to enter the market quickly with a new finish on its ski boards. It has three choices: refurbish the old equipment, make major modifications or purchase new equipment. The company has estimated the fixed and variable cost for each option. Which technique should they use to select the least costly option?
Cross Over
A company wants to provide a new service. There are three computer companies providing three different solutions to enable them to implement the new service. If they want to know which one will be least expensive at the volume of service they expect to provide each year, which analysis tool will help with this situation?
Crossover Analysis
An International Health Organization is concerned about the spread of the Zika virus in South America as mosquito season approaches. It proposes measuring the growth of new cases for the total population over the next six months. What type of analytics would this represent?
Cumulative Incidence
Represents the probability that a variable falls with a certain range
Cumulative distribution
A SIPOC Diagram is very helpful in following a whole process of a company. It stands for Supplier, Input, Process, Output, and _______.
Customer
Repetition in up and down patterns
Cyclicality
An online Active Wear retailer wants to use their last year's sales to evaluate consumer trends before ordering merchandise for fall season. What process should they use to discover consumer purchasing patterns?
Data mining
An entrepreneur is thinking about starting an independent gasoline station and considering how large the station should be. The annual return will depend upon the size of station and a number of marketing factors related to the oil industry and demand for gasoline. What analysis technique should be used to evaluate station size given the uncertainty of oil industry and demand factors?
Decision Analysis
Time series analysis
Definition: forecasting technique that employs a series of past data points to make a forecast Used for: evaluating patterns in data to make decisions about staffing levels, inventory, etc.
Cluster analysis
Definition: the process of arranging terms or values based on different variables into "natural" groups Used for:understanding the makeup of an industry's different areas
Decision analysis
Definition: the process of weighing all outcomes of a decision to determine the best course of action Used for: making decisions, whether personal or professional
A manager is looking at his previous quarter and determining the causes for the sudden sales spike to gain a better understanding of the actions and outcomes. If using analytics, which kind of analytics would the manager use?
Descriptive Analytics
There are two types of statistics (Analytics)
Descriptive and Inferential
The Davenport-Kim three-stage model consists of framing the problem, solving the problem, and communicating results. Which two of the following are part of framing the problem stage?
Determine the scope of the problem Review of previous findings
Amanda is measuring the temperature. She looks at the thermometer and sees that it is somewhere between 65 and 66 degrees Fahrenheit. She is okay with the temperature in between two integers because she knows temperature is not ________ data, but temperature is _________ data.
Discrete, Continuous
What are two advantages of Key Performance Indicators (KPI)?
Educate management on company performance Data-driven results make it easier to quantify performance
ANOVA uses this test statistics
F-value (must be higher than critical value to reject the null)
A hotel chain is interested in improving its customer service by reducing the amount of time it takes customers to check in. Which analysis technique should they use?
Flowchart
Visual tool to understand a process
Flowchart
Sarah is working for a non-profit trying to get malaria vaccines to the small village she is helping in Liberia. There has been a spread of malaria, and there are only two ways to get the needed hepatitis vaccines to the village in time. She could mail the shipment and pay extra to get each vaccination through customs or she could take it herself and be with it when going through customs which cost less. To ship it, the cost would be $200 shipping and $2 per vaccination at customs. For taking it herself, the cost would be $1400 and $0.50 per vaccination at customs. If there are 900 people in the village, should Sarah ship the vaccines or take them to Liberia herself? What is the difference in cost between shipping the vaccine and Sarah flying with it?
Fly with vaccines, $150
Which phrase is a description of quality assurance?
Focuses on training
Forecasting
Forecasting is one of the most important elements of business decision making. Managers employ three basic forecasting techniques: Judgmental (based on sales, consumer, or management input); Time-Series (based upon data patterns in past data, which includes techniques for random variation, trend, seasonality, etc.) and Associative (based upon predictive or explanatory variables and includes regression.) We're focusing on regression analysis because it is often cited as a powerful technique and managers need to understand it.
An organization develops a new strategic plan and seeks ways to measure its performance over a specific period of time. Which system enables the organization to measure performance based upon established global standards
ISO
Predictive analytics is the practice of extracting information from existing data sets in order to determine patterns and predict future outcomes and trends. Predictive analytics does not tell you what will happen in the future.
Identify customers that are likely to abandon a service or product. Consider a yoga studio that has implemented a predictive analytics model. The system may identify that 'Jane' will most likely not renew her membership and suggest an incentive that is likely to get her to renew based on historical data. The next time Jane comes into the studio, the system will prompt an alert to the membership relations staff to offer her an incentive or talk with her about continuing her membership. In this example, predictive analytics can be used in real time to remedy customer churn before it takes place.
Kai's team is running an experiment to see if their ideas will work before they implement them company-wide. What step of the PDCA cycle are they in?
In the Do step, teams run experiments to see if plans will work on a small scale before implementing them on a larger scale.
What is the most important analytic to determine the success or failure of a particular year's flu vaccine?
Incidence accounting for all new cases
Prescriptive analytics
Include experimental design and optimization to suggest a course of action
Questions favor and outcome or the interviewer ask questions that favor an outcome.
Information Bias
Which of the following answers is a step in Quality Control, not Quality Assurance?
Inspection and repair
A medical care provider determines the probability that a patient needs treatment for a broken bone, the probability that a patient needs treatment for a concussion, and the probability that a patient needs treatment for both a broken bone and a concussion. Which two techniques apply in finding the probability that a patient needs treatment for a broken bone and a concussion?
Intersection Multiplication principle
What level of measurement are women's dress sizes (2,4,6, etc.)?
Interval
What is true of cost-effective analysis?
It analyzes the cost of achieving a quantifiable goal.
A rural town seeks to deploy a new citizen relationship program within its Fire and EMT department. How could the citizen relationship program help the town service citizen's emergencies?
It could reduce response times
What are some of the aspects of data quality management?
It reduces the amount of incomplete data. It cleans data.
A Pizza Chain wishes to improve sales by focusing on product quality, reducing delivery time and improving productivity. Which tool would best meet the Chain's objective of quantifying their improvement in product quality only?
Key Performance Indicator
A retail chain seeks to improve store performance by growing sales and improving customer service. Which tool would specifically meet the chain's objective of improving store sales growth?
Key performance indicator
Which approach focuses on eliminating activities that do not add value or satisfy customers?
Lean Operations
1. A craftsman builds two kinds of birdhouses. One for bluebirds and one for cardinals. He knows the amount of labor and the units of lumber that are needed for each birdhouse. The craftsman has available 60 hours of labor and 120 units of lumber. Which technique should the craftsman use to minimize cost?
Linear Programming Linear programming (LP, also called linear optimization) is a method to achieve the best outcome (such as maximum profit or lowest cost) in a mathematical model whose requirements are represented by linear relationships.
A company that raises turkeys is hoping to increase the rate of growth of the birds while controlling the cost of feeding the birds. It has determined that feeds containing both nutrients and protein can be used. Which decision-making technique is most appropriate for this company to minimize the cost of feeding the birds?
Linear programming
A technique using a single independent variable to predict a single dependent variable
Linear regression
Cluster Analysis
Marketing determine target markets and for placement of products Medicine determine the locations of diseases by clustering differences in body makeup Social Media group together communities of people to create more relevant search results for certain groups Education identify habits and systems in place at successful or failing schools so that they can implement the working methods and get rid of the faulty methods
A Manufacturer needs to closely manage product cost to maintain profit margins in a highly competitive market. Which two key performance indicators should management use to control product cost?
Measure employee productivity Measure production waste
An Online retailer seeks to improve its Amazon customer services rating. What two key performance indicators should the retailer measure?
Measure on time delivery Measure customer return rate
Bias that occurs from not selecting a random sample
Measurement bias
Which two attributes indicate potential data quality issues when evaluating a set of nominal data?
Missing data Misspelled data
A car dealership wishes to forecast car sales based upon price discounts and television ads. What forecasting technique should the dealership use?
Multiple Regression Analysis
pply this rule when looking for two events occurring (AND)
Multiplication
A retailer wants to evaluate the strength of its customer relations to see how the company compares to others in the industry. Which analysis technique could help the retailer with this decision?
Net Promoter Score
A professional services firm is undergoing a business process improvement exercise to improve productivity, staff morale, and client satisfaction. Which technique might the firm use to evaluate the strength of customer service relations?
Net promoter score
Which of the following is NOT one of the four main perspectives examined by the balanced scorecard?
New ideas
United Motors indicates that gas mileage tests of one of their cars, the Starbird 300, under city driving conditions has a mean of 30 mph and a median of 29.9 mph. Which type of distribution would this testing represent?
Normal distribution
Toby is trying to determine the number of people at today's parade in order to determine the impact of advertising at parades. He asks a number of different people leaving the parade their projected number of attendants. He gets the following responses: 70,000; 450,000; 2,000; 130,000; 3,000,000; 75,000; 200,000; 800,000; 150,000; and 210,000. Is this survey reliable? Is it valid?
Not Reliable or Valid
Omission errors
Occur when something, such as crucial data, is missing. The missing data may be intentional, unintentional, or even a fault of the study.
SIPOC (Supplier-Input-Process-Output-Customer)
One way to ensure that you are viewing your process as a whole is to create a SIPOC diagram*. A SIPOC diagram allows you to see all of the elements that could influence the process before work is begun. It helps you define the boundaries of your operations by providing a high-level view of the complete process, from supplier to customer. (SIPOC is an acronym that stands for Supplier-Input-Process-Output-Customer.) A SIPOC diagram will help you understand how process elements fit together. It ensures that you take a broad view of work instead of focusing only on the internal work that you and your team do. It guarantees that you'll take into account the quality of the work and materials that suppliers provide to the process, as well as how the outputs of the process are perceived and used by customers. It prevents you from viewing the process only from the team's point of view and stops you from optimizing work to satisfy only the internal process stakeholders.
Doctor Andrews has been trying to measure the likelihood of heart attack risk. Doctor Andrews decides to monitor hair length in people to determine those at high risk of heart attack. What is the flaw in this experiment?
Operationalization Monitoring hair growth does not measure the risk of heart attack. There is a flaw in the experiment because the experiment is not measuring what the objective is trying to determine.
What level of measurement is this the 10 best cities in the U.S. to retire in?
Ordinal
Which type of data are the Olympic medals of gold, silver, and bronze examples of?
Ordinal data
A researcher wants to predict test scores based upon hours spent studying. Which type of regression would be more appropriate?
Ordinary least squares regression
Outliers create this type of error
Out-of Range
Graphical display of data set in highest to lowest order
Pareto
A college is reviewing statistics concerning student retention. The college would like to determine the most important factors that cause students to leave and asks the researcher to display this information using one of the Seven Basic Tools of Quality.
Pareto chartThe seven tools are: Check sheet. Control chart. Stratification (alternately, flow chart or run chart) Pareto chart. Histogram. Cause-and-effect diagram (also known as the "fishbone" or Ishikawa diagram) Scatter diagram. Why Why Analysis.
An organization is concerned about whether quality control standards are being met and develops a strategy to test quality control metrics. Which step does this represent in the Plan-Do-Check-Act cycle?
Plan
Analytics is a broad term that refers to a variety of tools that inform managerial decisions. Which term can be used to describe managerial decisions?
Prescriptive
A manufacturer wants to maximize their factory output while specifically minimizing labor costs. What type of analytics might they employ to achieve this goal?
Prescriptive Analytics
Used to count ALL of the existing cases in a disease.
Prevalence
____________ counts all of the existing cases of a disease, while ______________ only counts new cases.
Prevalence and incidence
Which measurement may be used by potential home buyers to evaluate the price of homes on the market?
Price per square foot
Chester is showing his team how to uncover and fix the defects that their process has produced. What is he helping his team do?
Quality control activities help teams recognize and take action once a problem has happened.
Your quality management processes should monitor ________.
Quality management encompasses both quality control and quality assurance, so it includes monitoring of both products and processes.
A business entrepreneur wishes to predict yearly revenue for potential Sub Restaurant sites. He performs a regression analysis based upon the area's population and business rating. What statistic indicates the strength of the relationship of population and rating to revenue?
R - square
A company decides to auction excess inventory on an auction website. They have performed a regression analysis to identify how the length of the auction impacts the final price. Which statistic indicates the strength of the relationship between the length of auctions and final price?
R-squared
R-squared measures the goodness of fit.
R-squared is a statistical measure of how close the data are to the fitted regression line. It is also known as the coefficient of determination, or the coefficient of multiple determination for multiple regression. The definition of R-squared is fairly straight-forward; it is the percentage of the response variable variation that is explained by a linear model. Or: R-squared = Explained variation / Total variation R-squared is always between 0 and 100%: 0% indicates that the model explains none of the variability of the response data around its mean. 100% indicates that the model explains all the variability of the response data around its mea
Measures the goodness of fit in a regression analysis
R2 (R-Square)
Runners cover 26.2 miles in the Olympics marathon. What level of measurement is this?
Ratio
Median
Re write the list in numerical order. Then it is the middle number. 13, 13, 13, 13, 14, 14, 16, 18, 21. So, the median is 14.
Regression analysis
Regression Analysis definition: statistical method to measure the average amount of change in a dependent variable associated with a unit change in one or more independent variables; considered an associate model as it incorporates the factors (variables) that might influence the quantity being forecasted
Regression analysis
Regression analysis determines the relationship between two data sets and can be useful in predicting or forecasting results for a data set based on the other data set.
Tom Brady is on the street in Chicago. He is asking anyone he meets if they prefer Tom Brady or Peyton Manning. The survey results show that people greatly prefer Tom Brady. What is the flaw in this experiment?
Response Bias
A Charity is evaluating the effectiveness of its annual walk promotional campaign, in increasing walk participants and donations.What is the appropriate tool for evaluating performance?
Results-based management
Illustrates performance measurements over a period of time
Run Chart
Which of Ishikawa's Seven Basic Tools of Quality is used to illustrate performance measurements over time?
Run chart
Diagram demonstrating all of the elements that can influence a process before it starts.
SIPOC (Supplier - Input - Process - Output - Customer)
A doctoral student is surveying chief executive officers (CEOs) to understand their relationships with their governing boards. The student determines the years of business experience for each CEO as well as their rating, on a 10-point scale, of satisfaction with the governing board. Which statistical approach should be used to display the data for analysis?
Scatter plot
Which graphical tool is used to illustrate a possible relationship or correlation between two variables?
Scatterplot
A Boston Hallmark store is preparing a budget for the next year and needs to forecast sales. The store notices variation in sales around holidays. What pattern describes the data to be forecasted?
Seasonality
An experiment consists of rolling a die and flipping a coin. Which two choices below best apply for computing the probability of rolling a 6 on a die OR flipping head on a coin?
Should choose this and Addition
An experiment consists of rolling a die and flipping a coin. Which two choices below best apply for computing the probability of rolling a 6 on a die AND flipping head on a coin?
Should choose this and Multiplication
City Line Transport wants to look at its fuel costs for 2013, 2014 and 2015 against the start-up base period of 2012. What analytic method should the company use?
Simple Index
After traveling down the Mississippi River, barges randomly arrive in New Orleans and are unloaded on a first-in, first-out basis. Any barges not unloaded on the day of arrival must wait until the following day incurring additional cost and negatively affecting customer service. The dock superintendent wants to use analytics to support a request for additional unloading crews. What analysis technique should he use?
Simulation
Six Sigma
Six Sigma* is a highly disciplined, data-driven approach for improving quality. The Six Sigma methodology focuses intently on facts and statistics, allowing practitioners to quantitatively measure performance and progress as corrections are made.
Bethany notices that her husband is wearing a blue sweater on Tuesday. She cannot remember what he has worn previous Tuesdays. The next Tuesday she notices he is wearing another blue sweater. She concludes that if it is Tuesday, he will wear a blue sweater having data from her experiment to support this. What is the flaw with this experiment?
Small Sample Size This is an experiment with too few data entries to form a statistically relevant conclusion.
What are two disadvantages of a Balanced Scorecard?
Sometimes difficult to maintain momentum May not encourage desired behavior changes
A soft-drink manufacturer performs a control chart analysis and the results indicate that the soft-drink bottles are consistently under-filled by a large amount according to specifications. The system was evaluated three months prior and was determined to be stable and filling bottles within accepted limits. What is this consistent under-filling an example of?
Special cause variation
Results-based management does NOT need
Statistically complex indicators
All hypothesis tests follow the same four steps
Step 1: State the Null Hypothesis and the Alternative Hypothesis Step 2: Decide on the Significance Level Step 3: Compute the Value of the Test Statistic Step 4: Find the Critical Value and Compare to Test Statistic Value
Descriptive analytics is a preliminary stage of data processing that creates a summary of historical data to yield useful information and possibly prepare the data for further analysis
Summarizing past events such as regional sales, customer attrition, or success of marketing campaigns. Tabulation of social metrics such as Facebook likes, Tweets, or followers.
Which key performance indicator can a hotel chain use to measure its ability to meet client tastes and preferences?
Surveying customer satisfaction upon checkout
This error repeats itself
Systematic Error - Skewed results
When conducting a study that measures an individual's weight, all scales are calibrated prior to use in measurement. Which type of error should this procedure significantly reduce?
Systematic error
T-test uses this test statistic
T-value (must be higher than critical value to reject the null)
The Consumer Price Index (CPI) is an example of a ________.
The CPI is a measure that examines the weighted average of prices of common consumer goods and services.
A research study examined the impact of product advertisement exposure on that product's brand awareness. The appropriate statistical test indicates that the null hypothesis should be rejected with 95% confidence. What can be concluded from this study?
The advertisement was effective in building brand awareness.
what is a check sheet used for
The check sheet is a form (document) used to collect data in real time at the location where the data is generated. The data it captures can be quantitative or qualitative. When the information is quantitative, the check sheet is sometimes called a tally sheet.
If a company has a positive variance against its target for a performance measure, what does that mean?
The company exceeded its target performance goal.
Mark owns a manufacturing plant that makes tires. You may only purchase up to 10 tires per order. If he has 5 customers, and they purchase between 1 and 10 tires randomly, what's the probability that they all purchase 4 or fewer tires?
The correct answer is 1.024% First calculate the total number of possible outcomes. The customers can purchase 4 or fewer tires: (45)=1024 Next, calculate all the choices the customer has: 105or10,000 P(4 or fewer tires) =1,024100,000=.01024 Alternatively, you can calculate the probability that each of the five customers purchases 4 or fewer tires as: 0.45=.01024
Elizabeth got a 75 on her performance review. The average was 80, but the standard deviation was 3.5. Determine the z-score for her performance review.
The correct answer is B. This is because she was 1.43 standard deviations below the average. Z-score is determined by the distance a data point is from the mean divided by the standard deviation. The data point was five below the mean ( therefore -5), and the standard deviation was 3.5. Therefore, the z-score for Elizabeth's performance review was −53.5=−1.43 .
There is a 90 percent chance that a package will arrive within three days of when it was shipped. Also, there is a 75 percent chance that it will get wet. There is a 70 percent chance that it will get wet and will be delivered within three days. What is the likelihood that at least one of these events occurs?
The correct answer is D. This is a union between P(on time) and P(wet). Therefore, P(on time∪wet) =P(on time)+P(wet)−P(on time∩wet) =0.90+0.75−0.70=0.95=95%
What does it mean when an individual data point has a z-score of -2?
The data point is two standard deviations less than the mean of the data set.
A manager uses a linear regression to examine how the store's retail sales are predicted by advertising expenditures. What will retail sales represent in this regression?
The dependent variable
Dependent vs. Independent Variables
The dependent variable* is the variable whose value depends on the other variables in the equation; typically the cost or activity to be predicted (in the previous example, the dependent variable was home sale price). The independent variables* are variables presumed to influence the dependent variable.
A balanced scorecard usually has a list of objectives. In each objective, a variance is shown. What is the meaning of variance when used on a balanced scorecard?
The difference between the target performance and the real performance
inter-quartile range
The difference, in value, between the bottom and top 25 percent of the sample or population
Range
The largest value in the list is 21, and the smallest is 13, so the range is 21 - 13 = 8.
A company is trying to determine their net promoter score. If their net promoter score is lower than the industry average, they will begin an initiative to improve customer satisfaction. The industry average net promoter score is 12 percent. 200 people respond to a survey of whether they would recommend the company to a friend. On a scale from 0 to 10, 40 people answered between 0 and 6, 105 people answered with either a 7 or 8, and 55 people answered with either a 9 or 10. What is the company's net promoter score?
The net promoter score is the promoters minus the detractors. 20 percent of people ( 40200 ) are detractors, and 27.5 percent of people ( 55200 ) are promoters. The company should begin its initiative to improve customer satisfaction
What does True Score Theory state about a test without systematic error?
The observed score is the true score plus random error.
complement
The occurrence of an event not happening, the opposite
n results-based management (RBM), which of the following is the definition of Outcome
The outcome is the short-term effect that the outputs will have on the organization.
We perform a regression analysis on a pair of variables and determine that there is a linear relationship. The regression line is determined to be y=12x−5 . What type of linear relationship exists between the independent variable, x, and the dependent variable, y?
The relationship between the two variables is positive. The dependent variable increases as the independent variable increases.
An advertising manager creates a research study by presenting low, medium, or high frequency of the same ad in matched markets. The manager then reports on sales in each market location. What is the term for the different sales in this study?
The response variable
How would a greater number of samples and a fewer number of populations affect an ANOVA analysis?
The results would be more accurate.The greater number of data points in a data set will more greatly allow for conclusions to be made in an ANOVA output as there is more information about those populations. Also, the fewer the number of populations, the fewer the degrees of freedom.
Companies A, B, and C were the three construction companies in Dedge, Minnesota in 2012. Companies A, B, and C built 9, 21, and 15 house additions in 2012, respectively. Company A went out of business after 2012 while Company C seriously expanded. No construction companies were founded between 2012 and 2013. In 2013, Companies B and C built 25 and 29 house additions, respectively. What is the simple composite index of house additions from the construction companies in Dedge, Minnesota for 2013. Hint: the base period is 2012.
The simple composite index measures data taken from many different sources and weighs all of the data equally. There were 45 house additions ( 9+21+15 ) in 2012. There were 54 house additions ( 25+29 ) in 2013. Therefore the simple composite index is 5445×100=120
median
The value or quantity lying at the midpoint of a frequency distribution
A balanced scorecard usually has a list of objectives. In each objective, a variance is shown. What is the meaning of variance when used on a balanced scorecard?
The variance when listed on a balanced scorecard, is the difference between the target performance and the actual performance.
Which of the following is an advantage of key performance indicators (KPIs)?
They can serve as an internal benchmarking system for the company
Mary is determining the likelihood that she will lose money on an investment. There is an expected 10 percent gain in a normally distributed dataset, with a standard deviation of 10 percent. The likelihood she'll lose money is _______ percent.
This is a little tricky as 68 percent of the dataset will be between a 0 and 20 percent gain. The other 32 percent is above 20 percent and below 0 percent. We care about the half that is below 0 percent, therefore half of the 32 percent outside of one standard deviation. Therefore there is a 16 percent chance Mary will lose money on this investment.
Elizabeth got a 75 on her performance review. The average was 80, but the standard deviation was 3.5. Determine the z-score for her performance review.
This is because she was 1.43 standard deviations below the average. Z-score is determined by the distance a data point is from the mean divided by the standard deviation. The data point was five below the mean ( therefore -5), and the standard deviation was 3.5. Therefore, the z-score for Elizabeth's performance review was −53.5=−1.43 .
A company has a survey process for determining its net promoter score. 50 people responded to the survey with an answer between 6 and 10? How does NPS classify this group?
This is not a defined group.
Association and causality
This misuse occurs when a researcher notices a relationship between two variables and assumes that one variable is the cause of the other. In reality, these variables might both be caused by a separate variable. In this case, they would merely be correlated, which means they show up together. Or there might be no relationship at all
Response bias
This misuse occurs when the respondents to a survey say what they believe the questioner wants to hear. This bias can occur as a result of the wording of a question. Sue and Tom are good friends. Tom, a town alderman, has publicly supported a tax override which will fund an expansion of the high school. When surveying town residents, Tom asks Sue, "Do you value our children's education?" Sue may fall victim to response bias, telling Tom what he wants to hea
Conscious bias
This misuse occurs when the surveyor is actively seeking a certain response to support his or her theory or cause. Bias can occur when the researcher manipulates the phrasing of questions in order to elicit the desired response A surveyor smiles and nods while giving the response choice he hopes the respondent will choose and frowns when he gives the other response choices.
A doctoral student is surveying chief executive officers (CEOs) to understand their relationships with their governing boards. The student receives responses to a survey with ten questions that rates the respective relationships. Why would the student measure the standard deviation of responses?
To measure the spread of the data
Town A has three times as many people as Town B. Town A has twice as many people with a disease as Town B. Which town would you visit, all other things being the same if you were to meet ten people in either town? (in other words, which town has a lower frequency for this disease)
Town A
A healthcare provider is researching blood glucose levels before and after exercising. What two elements should be part of any experimental study such as this?
Treatment procedures Experimental response
Tree Diagrams
Tree diagrams can be used to define the structure of a company, as well as the duties and responsibilities of the people in it.
A large manufacturer wants to forecast demand for a piece of pollution-control equipment. A review of the past 12 months of sales indicates that sales are increasing. What time series pattern does the sales likely exhibit?
Trend
general slope upward or downward over a period of time
Trend
Harry is doing a survey of the city of Los Angeles' population. He is wondering everyone's favorite food. He sends out a survey to all of the renters in the city and receives basically all of the surveys back in the mail. What is the flaw in this experiment?
Truly Representative Sample
A manufacturer of running shoes is implementing lean operation concepts into their production process. Which critical success factor would assure a smooth transition into the new program?
Understand customer needs and wants
Company Y predicts 85 sales per day for the week and actually gets 80 sales per day for the week. Company Z predicts an 8 percent decrease in total sales and gets an actual decrease of 7 percent in total sales. Is the variance for company Y favorable or unfavorable? Is the variance for company Z favorable or unfavorable?
Unfavorable, Favorable
what are pareto charts used for
When analyzing data about the frequency of problems or causes in a process. When there are many problems or causes and you want to focus on the most significant. When analyzing broad causes by looking at their specific components.
Which two statements indicate when it is appropriate to use a KPI Dashboard?
When more than a single chart, graph or piece of data are integral to making business decisions. When visual representation is needed to see if an organization is meeting the goals
crossover analysis*
When there are two or more plans or options to consider, crossover analysis* allows a decision maker to identify the crossover point, which represents the point at which we are indifferent between the plans. With the crossover point identified, it also clarifies which option is better on either side of the crossover point
mutually exclusive events
When two or more events are not able to occur at the same tim
distinction between a histogram and a bar chart*
While a histogram measures how continuous data is distributed over various ranges, a bar chart measures data that is distributed over groups or categories
You survey 100 New Yorkers about their preference for New York-style or Chicago-style pizza. What would be wrong with this?
You would encounter measurement bias. Asking 100 New Yorkers about their preferences would most likely result in measurement bias. The same would occur if you were to ask the question of 100 Chicagoans.
chi-squared test* (also written as " X2 " or "chi-square")
a common hypothesis test*. Like the one-sample t-test*, or the two-sample t test, a chi-squared test is commonly used in statistics to draw inferences about a population, by testing sample data.
simplex method*
a complicated mathematical method that helps solve linear programming problems.
In the military, a cost-benefit analysis might not be easily evaluated. Because of this, the military often uses:
a cost-effective analysis.
Linear programming*
a mathematical technique used to find a maximum or minimum of linear equations containing several variables. Problems in business often involve decisions about how best to use limited resources (for example time, money, space) in the most efficient manner. Typically this involves determining how to allocate the resources such that costs are minimized, or profits are maximized.
Variance
a measure of how spread out data are about the mean. The closer the data are to the mean, the smaller the variance. If most of the data points are spread out relative to the mean, the variance is larger.
run chart*
a simple way to illustrate performance measurements over a period of time Run charts are a good way to share information with stakeholders and to verify the results of any corrective action you have taken. They are also helpful for comparing data when information from multiple processes is compiled on one chart.
An example of continuous data might be
age. It is possible to be 22.67 years old
experimental study*
all variable measurements and manipulations are under the researcher's control, including the subjects or participants.
When there are several distinct populations, __________ can be used to analyze the difference between the various populations with respect to its summary statistics.
analysis of variance
A Pareto chart is a type of ________.
bar chart
Reliable data
both consistent and repeatable
Data management
cleaning and organizing a data set* that has been collected Data management is the practice of organizing and maintaining data processes to meet ongoing information lifecycle needs.
simple composite index*
created when a researcher gathers data from many different sources without weighing any data more significantly than any other data. Usually, this means that there is only one good or service being measured so that all of the information is weighted equally.
The goals a company must reach in order to consider itself successful are called?
critical success factors Those factors critical to an organization reaching its goals are called critical success factors, and they could include such measures as quality, customer service, and efficiency.
valid data
data resulting from a test that accurately measures what it is intended to measure. For instance, if a test reflects an accurate measurement of a student's abilities, it is said to be valid
We have a situation where we have to make some decisions, interspersed with a series of events that we do not control. Which tool will help us make a better decision?
decision analysis
"DMAIC" of DMAIC Framework stand for
define, measure, analyze, improve, and control.
Network Diagram
defines what is needed at the beginning of the process
There are three elements to an experimental study:
experimental units* subjects or objects under observation treatments* the procedures applied to each subject responses* the effects of the experimental treatments
The first stage of Davenport and Kim's Three-Stage Model of quantitative decision making is to
frame the problem.
Jane works for a public health company. She is working on an anti-tobacco campaign and is interested in how smoking cigarettes affects a smoker's cholesterol. She could use the number of cigarettes smoked per day as her _____ variable and place it on the __-axis.
he number of cigarettes smoked is the independent, explanatory variable, while cholesterol can be used as the dependent, response variable. We place the independent, explanatory variable on the x-axis
scatter diagram*
helps to show potential relationships or correlations between two variables. Data points are plotted as dots along an XY axis, and the concentration or dispersion of these dots shows the strength of the interaction between the variables.
histogram
is a graph that displays continuous data. The vertical bars in a histogram show the counts or numbers in each range. A comparison of the ranges, or a review of the graph as a whole, helps the audience understand the information presented.
probability distribution
is a list of all of the different probabilities of each outcome that can occur. This is often displayed as a graph, table, or formula.
Ratio data*
is a type of continuous data, like interval data. Unlike interval data, ratio data has a unique zero point. With ratio data, numbers can be compared as multiples of one another.
Interval data
is a type of continuous data. It has an order to it, and all the objects are an equal interval apart, so in interval data the difference between two values is meaningful.
Ordinal data*
is a type of discrete data. It places data objects into an order according to some quality.
percentile
is a unit of measurement that gives a value of which a percentage of the population falls below.
confidence interval*
is the range around a sample mean that has a specific probability of containing the true population mean. The "confidence" is the likelihood that a new sample will look like past findings, while the "interval" is the varying range around the existing mean that allows for the different levels of confidence. With the same data set, a greater confidence level needs a greater interval size to allow for more possible outcomes.
Skewness
measure of the degree to which data "leans" toward one side
is the most common measurement of a group of events
mode
The relationship between several independent variables and one dependent variable is shown using
multiple linear regression
Suppose you wanted to determine the ratio of cyclists to drivers in cities with higher versus lower air quality. What kind of study might you use?
observational study Because you cannot control for all variables, you would not be able to use an experimental study or blind studies.
Rankings are an example of which kind of data?
ordinal Ordinal numbers place subjects in order according to some quality. So, if you came in first, second, or third in a race, this would be an example of ordinal data.
line graph
plots the relationship between two or more variables by using connected data points.
If you were to take your temperature 10 times in a row using the same thermometer and got the same result every time, you could say that the thermometer is
reliable A test is reliable if it is consistent and repeatable.
range
represents the array of possibilities in which a value can exist, from the minimum value to the maximum value
cumulative distribution
represents the probability that a variable falls within a certain range. Specifically, the cumulative distribution of x measures the probability that a variable is less than or equal to x.
simple index number*
shows the change in price or quantity of a single good or service over time
Suppose you were making a simplified representation of a complex problem in order to solve it, which stage of the Three Stage Model would you be in?
solving the problem The modeling step is part of the solving the problem stage.
Nominal data
sometimes called categorical data, is used to label subjects in a study. Nominal data is a type of discrete data
SMART" criteria stands for
specific, measurable, attainable, relevant, and time-bound. The key word that entirely does not fit is "small" KPIs usually are applied to quantify company-wide goals.
is a group of observations that have something in common
statistical population
The science of using mathematical procedures to describe data is
statistics
inferential statistics
statistics that are used to make predictions about a population from observations of a sample
prospective cohort study*
subjects are followed over time
z-score
tells us the number of standard deviations a data point is from its mean
standard deviation
tells you how far, on average, the data points are from the mean
The Plan-Do-Check-Act Cycle
the Plan step, where you identify a problem and develop plans to solve the problem the Do step, where you run an experiment to see if your plans will work on a small scale before you implement them on a larger scale the Check step, where you analyze the results of your experiment and decide if they can be improved in any way the Act step, where you enact the change on a larger scale, making it a part of normal operations
Standard deviation measures
the dispersion from the average for the data set.
Central Limit Theorem
the idea that if a great enough number of samples is taken, the means of those samples will be normally distributed around the population mean
confidence interval
the range around a sample mean that has a specific probability of containing the true population mean.
proportion
type of ratio where the number of observations that are part of a specific group is compared to the total relevant population
Six Sigma
useful making fact-based decisions when looking at quality because it measures the performance and determines areas that need improvement.
Supplier-Input-Process-Output-Customer (SIPOC) diagram
very useful when focusing on the process of managing resources. An SIPOC diagram will show all of the elements that can influence a process before the process has started.
A High School principal wishes to study the math and science performance of individual 12th grade students by comparing their scores across multiple courses. Which analysis technique should the principal use:
z-score
