SCM 312 Midterm

Which of the following is the mathematical model for deriving the break-even volume?

Q = F / (C -V)

The closer alpha is to one, the ______ the model responds to changes in the time series.

Quicker

When data are classified by the type of measurement scale, which is the strongest form of measurement?

Ratio

Regression Analysis requires....

Regression analysis requires numerical data.

Statistical Forecasting Models

Simple moving average, Exponential smoothing, Regression Analysis

Which of the following charts shows three-dimensional data?

Surface chart

Which of the following is the mathematical model for deriving total cost of only outsourcing?

TC = Q x C

Net Present Value

(or discounted cash flow) measures the worth of a stream of cash flows, taking into account the time value of money

Discrete Metric

- one that is derived from counting something. For example, a delivery is either on time or not; an order is complete or incomplete; or an invoice can have one, two, three, or any number of errors. Some discrete metrics would be the proportion of on-time deliveries; the number of incomplete orders each day, and the number of errors per invoice.

=OR(condition1, condition2, ...)

- returns TRUE if any condition is true and FALSE if not.

Descriptive Analytics

A manager at Gampco Inc. wishes to know the company's revenue and profit in its previous quarter. Which of the following business analytics will help the manager?

IBM Cognos Express

An integrated business intelligence and planning solution designed to meet the needs of midsize companies, provides reporting, analysis, dashboard, scorecard, planning, budgeting and forecasting capabilities

Frequency distributions and histograms can be created using the ________ in Excel.

Analysis Tool pac

Nominal data:

Are sorted into categories according to specific characteristics

Peige, a stock broker, has data consisting of price, price/earnings ratio, and market capitalization for seven different stocks on one particular day. She wishes to plot these three variables in two dimensions. Which of the following charts must Peige use?

Bubble Chart

Which of the following inputs of a decision model is an example of data?

COSts

Roger wants to compare values across categories using vertical rectangles. Which of the following charts must Roger use?

Clustered column chart

Ratio Data

Continuous and has natural zero ex: Money

a collection of data. Examples: Marketing survey responses, a table of historical stock prices, and a collection of measurements of dimensions of a manufactured item.

Data Set

a collection of related files containing records on people, places, or things. A database file is usually organized in a two-dimensional table, where the columns correspond to each individual element of data (called fields, or attributes), and the rows represent records of related data elements.

Database

Examine historical data for similar products (prices, units sold, advertising

Descriptive Analytics

Categorical data can be included as independent variables, but must be coded numeric using ______variables.

Dummy

In a database, information is stored and maintained in ________

Entities

Steps to make relative frequency distribution

First, sum the frequencies to find the total number (note that the sum of the frequencies must be the same as the total number of observations, n). Then divide the frequency of each category by this value.

A graphical depiction of a frequency distribution for numerical data in the form of a column chart is called a

Histogram

Multiple Linea Regression

Involves more than 2 independent variables

Pareto Analysis

Involves sorting data and calculating cumulative proportions.

Following are the components of a data set containing purchase details of a shoe manufacturing company. Identify the ratio data.

Item cost

An ______ occurs when the effect of one variable is dependent on another variable.

Interaction

Dates

Interval

Which of the following charts provides a useful means for displaying data over time?

Line chart

Three error metrics used for measuring forecast accuracy

Mean Absolute Deviation, Mean square error, Mean absolute percentage error

numerical values associated with a metric.

Measures

Mean Square error

Most commonly used metric It penalizes larger errors because squaring larger numbers has a greater impact than squaring smaller numbers

| r |, where r is the sample correlation coefficient. The value of r varies from -1 to +1 (r is negative if slope is negative)

Multiple R

How to implement news vender Idea

Must determine what each good costs to buy (C), how much revenue you get from each unit (R), and what the salvage value is for any unsold goods (S) → R>C>S

a street vendor sells daily newspapers and must decide each day how many to purchase. If he purchases too few, there will be a lost opportunity to increase profits, but if he purchases too many, he will have to throw those away at the end of the day, which results in a loss

Newsvender example

Explain how regression techniques can be used to forecast with explanatory or causal variables

Often called econometric models), seek to identify factors that explain statistically the patterns observed in the variable being forecasted, usually with regression analysis.

Philip wishes to understand the relative proportion of each data source to the total. Which of the following charts must Philip use?

Pie Chart

A trader who wants to predict short-term movements in stock prices is likely to use ________ analytics.

Predictive

detects patterns in historical data and extrapolates them forward in time.

Predictive analytics

SAS Analytics

Predictive modeling and data mining, visualization, forecasting, optimization and model management, statistical analysis, text analytics, and more.

Which decision model incorporates the process of optimization?

Prescriptive

In the Purchase Orders database, to find the total cost of all airframe fasteners, use

SUMIF(D4:D97,"Airframe fasteners", G4:G97)

Observations consisting of pairs of variable data are required to construct a ________ chart

Scatter Chart

Categorical (Nominal) Data

Specific characteristics. Ex. Words, Item Numbers/Classifications

variability between observed and predicted Y values. This is formally called the standard error of the estimate,

Standard Error

Apply moving average and exponential smoothing models to ________ time series.

Stationary time series

Mean absolute Deviation

The absolute difference between the actual value and the forecast, averaged over a range of forecasted values

Mean Absolute percentage Error

The average of absolute errors divided by actual observation values

Which of the following is a disadvantage of ordinal data?

They have no fixed units of measurement

To select a chart type in Excel from the Charts group, which tab has to be accessed?

To select a chart type in Excel from the Charts group, which tab has to be accessed?

Interval Data

Which of the following allow meaningful comparison of ranges, averages and other statistics?

Regression Analysis

Used for long term forecasting

The demand for coffee beans over a period of three months has been represented in the form of an L-shaped curve. Which form of model was used here?

Visual model

Which of the following is an example of a measure of continuous metrics?

Weight and steel

Which of the following questions will prescriptive analytics help a company address?

What is the best way of shipping goods from their factories to minimize costs?

Delphi Method

uses a panel of confidential (from one another) experts to respond to questionnaires in order to evaluate

=IF(condition, value if true, value if false)

a returns one value if the condition is true and another if the condition is false,

Metric

a unit of measurement that provides a way to objectively quantify performance.

Exponential Smoothing

a versatile, yet highly effective approach for short-range forecasting Forecast + Alpha(Observed Value - Forecast)

Influence Diagram

a visual representation of a descriptive model that shows how the elements of the model influence, or relate to, others. An influence diagram is a useful approach for conceptualizing the structure of a model and can assist in building a mathematical or spreadsheet model.

Deterministic

all model input information is known with certainty.

Decision Model

an abstraction or representation of a real system, idea, or object. Captures the most important features Can be a written or verbal description, a visual representation, a mathematical formula, or a spreadsheet.

Model

an abstraction or representation of a real system, idea, or object. Captures the most important features Can be a written or verbal description, a visual representation, a mathematical formula, or a spreadsheet.

Ordinal Data

can be ordered or ranked according to some relationship to one another. ex: rankings, order numbers

Decision Variables

can be selected at the discretion of the decision maker.

R Square

coefficient of determination, R2, which varies from 0 (no fit) to 1 (perfect fit)

COUNTA

counts the number of nonblank cells in a range

Validity

data correctly measures what it is supposed to measure.

Prescriptive decision models help:

decision makers identify the best solution to decision problems.

Descriptive Decision models

describe relationships but do not tell a manager what to do.

Frequency distribution can be constructed for both

discrete and continuous data

Historical Analogy

forecast is obtained through a comparative analysis with a previous situation → ex: if a new product is being produced, the response of customers to marketing campaigns of similar products can be looked at as a guide for the new product's market campaign

Prescriptive Analytics

identify the best alternatives to minimize or maximize some objective. ex: Find the best sets of pricing and advertising to maximize sales revenue

To construct a frequency distribution, we need only count the number of observations that appear

in each category using COUNTIF Function

Simple Linear Regression

involves a single independent variable.

Frequency Distribution

is a table that shows the number of observations in each of several nonoverlapping groups.

Relative Frequency Distribution

is a tabular summary of the relative frequencies of all categories.

Regression Analysis

is a tool for building mathematical and statistical models that characterize relationships between a dependent (ratio) variable and one or more independent, or explanatory variables (ratio or categorical), all of which are numerical.

Risk

is associated with the consequences of what actually happens.

Uncertainty

is imperfect knowledge of what will happen in the future.

Business Analytics

is the use of: data, information technology, statistical analysis, quantitative methods, and mathematical or computer-based models to help managers gain improved insight about their business operations and make better, fact-based decisions.

B$4

keeps the reference fixed to row 4 but allows the column reference to change if the formula is copied to another cell.

$B$4

keeps the reference to cell B4 fixed no matter where the formula is copied.

$B4

keeps the reference to column B fixed but allows the row reference to change.

=VLOOKUP(lookup_value, table_array, col_index_num, [range lookup]) -

looks up a value in the leftmost column of a table and returns a value in the same row from a column you specify

=HLOOKUP(lookup_value, table_array, row_index_num, [range lookup]) -

looks up a value in the top row of a table and returns a value in the same column from a row you specify.

Indicators and Indexes

measures that are believed to influence the behavior of variable we wish to forecast

Interval Data

ordinal but have constant differences between observations and have arbitrary zero points. Dates

Predictive Analytics

predict the future by examining historical data, detecting patterns or relationships in these data, and then extrapolating these relationships forward in time. Ex. Predict sales based on price

Information

result of analyzing data; that is, extracting meaning from data to support evaluation and decision making.

=AND(condition1, condition2, ...)

returns TRUE if all conditions are true and FALSE if not,

Simple Moving Average

smoothing method based on the idea of averaging random fluctuations in the time series to identify the underlying direction in which the time series is changing (k = 3, 5, 12, etc.)

Stochastic

some model input information is uncertain.

Measurement

the act of obtaining data associated with a metric.

Descriptive Analytics

the use of data to understand past and current business performance and make informed decisions

When will a company use a predictive decision model?

when it wishes to know sales patterns to plan inventory levels