Business Math & Statistics - Ivy Software
Material $75/television Direct Labor $40/television New Manufacturing Equipment $1,500,000 Modifications to Factory $3,000,000 If this company is considering building 10,000 units this year (and needs money for the entire year allotted to it now for this purpose), for how much should the president ask?
$ 5,650,000
There is a 75% chance of Chris earning $4000 and a 25% probability that he will earn nothing. What is the EMV?
$3000 .75 x 4000 - .25 x 0 = 3000 - 0 = 3000
Given these two equations, solve for x and y: 8x = 2y + 36 and 9y = 3x + 3
(5,2)
Contribution Margin
(price per unit X * # of units sold) - (variable cost per unit X * units sold)
What is the probability of flipping a coin three times and each time getting heads?
0.125 Using the Appendix B graph: n = 3 trials r = 3 successes Prob. of Indiv. Successes = 0.5
How do you use the Pearson-Tukey Method to evaluate continuous uncertainty?
Assess the 0.05, 0.5, and 0.95 fractiles and then multiply by the values found at each of those fractiles by probabilities of 0.185, 0.63, and 0.185, respectively. Add up each of the products and your sum will be the expected monetary value of your outcome.
How do you use bracket medians to evaluate continuous uncertainty?
Assess the 0.1, 0.3, 0.5, 0.7 and 0.9 fractiles of the range of uncertainty for your outcome, and then multiply the values at each of those fractiles by the probability of 0.2. Add up each of the products and your sum will be the expected monetary value of your outcome.
True/False: A distribution that is not a normal distribution does not have a standard deviation
False
True/False: A researcher believes, among other things, the town one lives in within the state influences the likelihood of contracting cancer. He has data from three towns and has decided to code the towns as follows X = Town, where: X = 0 if C'burg, X = 1 if B'burg, X = 2 if L'burg. This is an appropriate means for including qualitative data into his analysis.
False
True/False: Allison's time-series data for periods 1 through 7 were used to develop a trend line. She cannot use the trend line to predict a point for period 8
False
True/False: Branches are connected by squares only.
False
True/False: In the weighted average technique, all the examples given in the text place the heavier weights on the earliest data.
False
True/False: Regression limits the prediction of the unknown variable to historical levels of that same variable.
False
True/False: The decision maker determines which branch to follow from an event node.
False
True/False: When the following equation holds true, we are not at the breakeven level in dollars: Sales - Variable Costs = Fixed Costs
False
Dependent variable
The variable the forecaster wishes to predict
True/False: Unlike regression, trend analysis limits the prediction of the unknown variable to historical levels of the same variable.
True For trend analysis, its just time-based
True/False: Suppose you have a litter of six puppies (2 female and 4 male) and randomly select a puppy. The events that the puppy is female and the puppy is male are mutually exclusive.
True Since two puppies cannot be the same sex at the same time, the outcomes are by definition, mutually exclusive.
Write an equation to related total cost to number of driveways paved. Asphalt, tar & concrete/driveway = $7,000 Direct Labor/Driveway = $12,000 Office Expenses & Other Labor = $5,000
y = 19x + 5
How do you calculate y in y = a + bx?
y is the sum of y divided by n
in the formula y = a + bx, what is a?
a is the y-intercept
Parking spaces at a business school are arranged by a random monthly lottery. There are 3 spaces for every 10 students who want one and all of them have an equal chance of getting one. What is the probability of a student getting a parking space for at least four out of the nine months? (as a decimal) Select one: a. 0.17 b. 0.07 c. 0.06 d. none of the above Use the Binomial Distribution Probability Table in Ch 4, Appendix B
a. 0.17
A survey among entrepreneurs indicates that the average number of hours worked per week is normally distributed with a mean of 60 hours and a standard deviation of 15 hours. What is the probability that the next entrepreneur surveyed will work less than 30 hours per week? (as a percentage, to three decimal places) a. 2.275 b. 0.023 c. 2.222 d. none of the above Use the Normal Distribution Probability Table in Ch 4, Appendix C
a. 2.275
2x =32, x is a. 5 b. 4 c. 3 d. none of the above
a. 5
Trend Analysis
uses past actual values to forecast; however, it is used when there is a noticeable trend over time
x^5 = 32 solve for x
x = 2
Solve for x and y for these simultaneous equations: 3x = 14-5y 7x+2y = 23
x = 3 y = 1
2^x = 16 solve for x
x = 4
How do you calculate x in y = a + bx?
x is the sum of x divided by n
There are ten ping pong balls in a bucket. Each is equally likely to be picked. If a blindfolded person picks a ball out of the bucket 15 times (the number is noted and the ball is placed back in the bucket each time), what is the probability that the blindfolded person picks the same ball exactly four out of fifteen times(rounded to three decimal places)? Use the Binomial Distribution Probability Table in Ch 4, Appendix B
0.043 n = 15 r = 4 prob of ind. success = 1/10, or 0.1
If a pea is hidden under one of five nutshells, what is the probability that exactly three times out of five chances that the pea will be correctly discovered?
0.051 Using the Appendix B graph: n = 5 trials r = 3 successes Prob. of Indiv. Successes = 0.2
There are ten balls in a bucket, each a different color. The probability of a blindfolded person randomly choosing the one marked of those ten exactly two out of seven times if the balls were returned to the bucket between drawings is what?
0.124 The probability of choosing that ball one time is 1/10, or 0.10. Looking at the binomial distribution table in Appendix B, match the row that contains two successes (r) and 7 trials (n) with the row that contains the individual probability of success of 0.10 is 0.124
Normal distribution of fastball pitches this season averages at 70 mph and a standard deviation of 4 mph. What is the probability of the next pitch being 80 mph or more?
0.621% Find the z-score: (80-70)/4 = 2.5 See Appendix C chart for 2.5 z-score and 0 = 0.00621, or 0.621%
(Chapter 4, Illustration 4) What is the probability that Kent will catch 3 swordfishes or fewer?
0.85 Add up all the probabilities of 3 swordfish or fewer: 0.1 + 0.2 + 0.35 + 0.2 = 0.85
Kate is an avid bowler. Her bowling scores are normally distributed with a mean of 186 and a standard deviation of 24. She is in a tournament and needs to bowl a 150 or greater for her team to win. If not, her team will lose. What is the probability that her team will win?
0.93319 Find the z-score, (150-186)/24 = -1.5 Look up +1.5 on the normal distribution probability table in Appendix C and it is 0.06681. 1 - 0.06681 = 0.93319
Playing poker, Frank needs the nine of clubs to complete his flush. He accidentally sees that Jim has a club, but didnt see which one. Frank has four clubs in his hand. What is the probability of Jim's card being the nine of clubs?
1/9, or 0.11 There are 13 cards in the suite, and 4 clubs are accounted for. There is only one nine of clubs, so the chances are 1 out of 9 (13-4)
There are 50 people in a room. The probability that a person in the room has brown hair is 0.80. Of these people with brown hair, 40% of them have brown eyes. How many people in the room have brown hair but do not have brown eyes?
24 people
See Ch 4 Illustration 5. The farmer wants to know what the probability is of having bags weigh 9 lbs.
30.86% Find z-score. (9-10)/2 = 0.5 See Appendix C chart for 0.5 z-score and 0 is 0.3086, or 30.86%
Suppose we have the normal distribution with a mean of 225 and a standard deviation of 30. Suppose that the z-score for the next sample is 2.5. What is the sample value?
300 use the z-score formula.
Time Series Analysis
A forecasting method that uses historical sales data to discover patterns in the firm's sales over time and generally involves trend, cycle, seasonal, and random factor analyses
Weighed moving average
A method of combining the moving average and the weighted average
Which of the following is the trinomial expression? A) 4x^3 + 6x^4 +12x^3 + 45x^4 +6 B) 143x^4 + 3x^4 C) 143x^4 + 78x^4 + 6x^4 + 76
A) 4x^3 + 6x^4 +12x^3 + 45x^4 +6 - its the only term where the x's can be added together to get three terms
Which of the following nodes could be combined into one? A) If Jay decides to go to lunch, he has to decide where to go B) After Jay decides to go out to lunch, he has to make sure he doesnt have a meeting and, if he doesnt, he has to decide where to go out to lunch C) Jay finds out whether he has a meeting, then he will decide D) None of the above
A) If Jay decides to go to lunch, he has to decide where to go A has two decision modes, but B has a decision mode and an event mode, and C has an event node and a decision mode. So only A has two of the same and can be combined.
When you develop a string of simple averages by adding a data sample at a new time period and drop the oldest data sample, you have a: A) Moving Average B) Simple Average C) Weighted Average D) Trend Analysis
A) Moving Average
What is the correct order for separating, ordering and organizing of expressions? A) parentheses, brackets, braces, parentheses, and so on.... B) brackets, braces, parentheses, brackets, and so on.... C) braces, parentheses, brackets, braces, and so on....
A) parentheses, brackets, braces, parentheses, and so on....
in the formula y = a + bx, what is b?
B is the slope
Which of the following is the monomial expression? A) 4x^3 + 6x^4 +12x^3 + 45x^4 +6 B) 143x^4 + 3x^4 C) 143x^4 + 78x^4 + 6x^4 + 76
B) 143x^4 + 3x^4 - its the only term where the x's can be added together to get one term
Jamie's regression equation shows a correlation between X3 (the T-ratio is 5) and X4 (The T-ratio is 12) of 0.4. He should: A) throw both variables out B) keep both C) Throw out X3, keep X4 D) Throw out X4, keep X3 E) None of the above
B) Keep both This question addresses multicollinearity. How high is high? While 0.4 appears to be high, the T-ratios are large, indicating believable coefficients for X3 and X4, therefore we should keep both.
A band of treasure hunters is trying to determine whether eighteenth-century pirates buried any treasures on a small island. They figure that if they find any signs of early settlement on the island that there is a good chance that treasure is buried there. Which of the following represents the left-most event or decision node on the treasure hunter's decision tree? A) Pirates bury or do not bury their treasure B) Treasure hunters find or do not find signs of settlement C) Settlement was or was not built D) None of the above
B) Treasure hunters find or do not find signs of settlement
Which of the following statements is false? A) Simple averaging considers all data samples equally B) Using simple averaging when data samples have a lot of variability will provide accurate forecasts C) Simple averaging is easy to understand and apply
B) Using simple averaging when data samples have a lot of variability will provide accurate forecasts
If you graphed the data points in a particular time series and a relatively flat, horizontal pattern was observed, the method that should be used to forecast the next point in the series would be: A) a horizontal method B) an averaging method C) a beta method D) a trend analysis method E) none of the above
B) an averaging method
"I think there is an 80% chance of me passing this exam" is an example of a: A) joint probability B) subjective probability C) normal probability D) conditional probability E) none of the above
B) subjective probability Probabilities determined through a combination of intuition, knowledge, research and judgement, such as determining the probability of the success of an exam, are subjective probabilities.
Breakeven
Breakeven = Fixed Costs/Contribution Margin per unit
Tracy flips a coin five times. What is the probability of that coin landing tails up exactly two or more of those five times? A) 0.3125 B) 0.1875 C) 0.8125 D) 0.5
C) 0.8125 You would find the answer in the table (Appendix B) of the Probability of Individual Success, where n = 5 tries, r = 2 outcomes and 0.5 (two sides of a coin) = 0.3125. Then, add it to the probabilities of two or more success: 0.3125 + 0.31250 + 0.15625 + 0.03125 = 0.8125
Which of the following is the binomial expression? A) 4x^3 + 6x^4 +12x^3 + 45x^4 +6 B) 143x^4 + 3x^4 C) 143x^4 + 78x^4 + 6x^4 + 76
C) 143x^4 + 78x^4 + 6x^4 + 76 - tis the only term where the x's can be added together to get two terms
Susan wants to study the effect of water on the growth of flowers in her garden. She determines a regression line where water is the independent variable (measured in fluid ounces) and flower growth is the dependent variable (measured in cm). If one of her flowers is 40 cm tall, and the regression line is y = 15 + 5x, estimate how many fluid ounces of water it has been given. A) 20 B) 215 C) 5 D) 115
C) 5 Plug 40 cm in for y and solve for x.
A regression model has the equation: Y = 7(x1) + 4(x2) + 9(x3) + 17 with 75 observations. How many degrees of freedom are there in this model? A) 75 B) 70 C) 71 D) None of the above
C) 71 Determined by taking the number of observations (75) and subtracting 1 plus the number of independent variables in the model (3). 75 - 1 + 3 = 71
Which of the following would be best represented by a decision node? A) Bob rides a cab or a bus to work;, whichever he can find the most quickly B) Sal either wins or doesn't win the lottery C) Jill goes to work for one of two firms who have offered her a position D) None of the above
C) Jill goes to work for one of two firms who have offered her a position
Referring to Illustration 9 in Chapter 5, it shows the decision tree for three projects in which the AOK company can invest (they can only invest in one and must invest). In which one of the three projects should AOK invest, based on EMV? A) Project A B) Project B C) Project C D) None of the above, they are all equal.
C) Project C
Edna's T-ratio is less than 2 for the constant term in her regression equation. She should be: A) looking for another set of data since she cannot use this one. B) very concerned. C) not very concerned. D) None of the above.
C) not very concerned T-statistics less than 2 are an area of concern for the coefficient of the independent variable because they may indicate a zero coefficient. A zero coefficient means there is no relationship between the independent and dependent variables. On the other hand, the constant term has no particular significance to the analyst and can enjoy a low T-ratio.
The ages of personnel in the accounting department of a large company are normally distributed with a standard deviation of 7 years. There is a 0.02275 probability that the age of any randomly chosen person in the department is less than 22 and 0.15866 probability that the age of any randomly chosen person is greater than 43. What is the mean of this distribution? a. 14 b. 22 c. 36 d. none of the above Use the Normal Distribution Probability Table in Ch 4, Appendix C
C. 36 Using the z-score equation, solve for mean and look for the probability of the resulting z-score on the table
Tim has not been doing well in finance class. His professor tells him to write up a case analysis for her in order to pass the class. He can still pass the class without the write-up, just like he still can fail with it, since the final exam is coming up. Which of these decisions would have a vertical line at the end of the decision node: A) Do nothing (dont write the case analysis) B) Pass the final exam C) Write the case analysis D) None of the above
D) None of the above
A local artist has three civic buildings, one of which she wants to paint. If she paints any of these buildings, she can sell the painting to the organization that occupies the building, sell the paining to a private collector or donate it to a small museum. The order for the decision tree would follow which way? A) decision node, event node B) event node, decision node, event node C) event node, event node, D) None of the above
D) None of the above It would actually be decision node (which building to paint), decision node (what to do with the painting)
If you have a coefficient of determination of 0.49, in simple regression, what is the coefficient of correlation? A) 0.5 B) 0.7 C) 0.49 D) None of the above
D) None of the above Since we do not know the slope (+/-), we do not know if the answer is a +0.7 or -0.7
An advertising firm has five prospective clients whose business it is trying to attract. The managing partner is considering offering these clients reduced rates on media time she has purchased. She reasons that each client is just as likely as not to sign on with the firm given these circumstances. The best tool to use tho determine the probability that at lease one client will sign is: A) a joint probability B) a normal distribution C) a cumulative distribution function D) a binomial distribution E) none of the above
D) a binomial distribution Since the chance of winning a client (designated a success) is the same for each of the potential clients, the act of winning a client can best be represented by a Bernoulli Trial, and the probability of winning one or more can be obtained using the binomial distribution probability table.
When solving for an unknown variable that has a number preceding it, you will divide both sides of the equation by this number, which is known as the: A) base B) power C) exponent D) coefficient E) none of the above
D) coefficient
EMV
Expected Monetary Value = Probability * impact on currency
True/False: The mode of a probability distribution is the least likely outcome.
False The mode is the most likely outcome.
True/False: In multiple regression, all independent variables are independent, i.e. they do not interact with one another.
False There are always some interactions between independent variables.
True/False: the EMV of an alternative with 0.5 probability of making $500 is definitely $250.
False You cannot calculate the EMV with just this information. You need to know all possible returns, not just one.All possible outcomes should equal one, but you only have 0.5 of the information required.
True/False: When the alternative with the lowest expected returns are eliminated, you should erase them from a decision diagram.
False You should prune the branches of a decision tree, not erase them, so others can see what you have done.
True/False: the fixed costs for a certain project are $50 and it costs $2 to produce one unit. The equation that relates y (total costs) to x (total number of units produced) is y = 2 + 50x
False. It would be y = 50 + 2x
True/False: Suppose that two judges, Bill and Ted, each score five competitive divers using a scale from 1 to 10 (with 10 being the best). The correlation coefficient between Bill's and Ted's scores is 1, which means that Bill and Ted gave the divers the same score.
False. The correlation coefficient measures the strength of a linear relationship between Bill & Ted's scores, not whether one's scores are lower or higher or the same as the other's scores. For example, a correlation coefficient of 1 could be obtained by Ted giving scores of 1,2,3,4,5 and Bill giving scores of 2,4,6,8,10 to the same divers.
True/False: a correlation coefficient of -2 means that as x goes up, so does y.
False: a negative correlation coefficient means that as x increases, y decreases. Also, it is not possible to have -2 as a correlation coefficient.
True/False: The coefficient of determination is the unexplained variation divided by the total variation.
False: it is the explained variation divided by the total variation.
True/False: The Bernoulli Trial is an event with two or more possible outcomes.
False: it only has two possible outcomes
True/False: Simple regression is made up of one independent and one dependent variable, while multiple regression is made up of one independent and many dependent variables.
False: multiple regression is made up of one dependent and many independent variables.
True/False: if r^2 of 0.5 means that as x goes up, y goes down, and vice versa.
False: r^2 is the coefficient of determination, which tells us how much of the scatter of data points is explained by the regression model. The coefficient of correlation (r) would tell us which way the y would change (increase or decrease) as x changes.
Samantha will open five doors. A prize will be behind two of those doors. How many branches of this decision diagram have an event node after the decision made?
Five. The decision tree will start with a decision node with five branches, indicating her choice of which door to open. At the end of each branch will be an event node, indicating that door having or not haing a prize behind it.
Simple Average
Found by adding the values of all the data samples and dividing the sum by the number of samples
Marcie wants to invest her money in the stock of one of two companies: Writeoff, a maker of erasers, or Outatwon Books, a publisher of travel guides. She has a 0.7 probability of making $10,000 and a 0.3 probability of losing $25,000 with Writeoff stock, and a 0.45 probability of making $3000 and a 0.55 probability of losing $500 with Outatown Books stock. If she does nothing, she will neither gain nor lose money. Should she invest in Writeoff stock, Outatown stock or do nothing?
Invest in Outatown stock
Zero-one or dummy variable
One that cannot be given a numerical value
Formula for standard deviation (and standard error)
Standard deviation divided by the square root of the number of observations
abscissa
The x-coordinate of a point (independent variable)
ordinate
The y-coordinate of a point (dependent variable)
Equation for Total Cost
Total costs = (variable cost per unit * number of units produced) + Fixed Costs
True/False: the Expected Monetary Value (EMV) is a number based on averaging
True
True/False: A decision node is shown as a square.
True
True/False: A decision tree is a graphic representation of a problem.
True
True/False: A distribution that is not a normal distribution still has a standard deviation
True
True/False: A point of uncertainty is represented by a circle.
True
True/False: A simple regression involves a single independent variable.
True
True/False: Branches may be connected by circles and squares.
True
True/False: The fixed costs for a certain project are $50 and it costs $2 to produce one unit. The equation that relates y (total costs) to x (total number of units produced) is y = 50 + 2x.
True
True/False: The mode of a probability distribution is the most likely outcome.
True
True/False: When forecasting data that are arranged in time periods, i.e., a time series analysis, there are two different approaches: trend analysis and averaging.
True
True/False: When the following equation hold true, we are at the breakeven level in dollars: Sales - Variable Costs = Fixed Costs
True
True/False: for the equation 2x - 3y = 6, the x and y intercepts are x=3, y=-2
True
True/False: A regression equation can have a negative coefficient of correlation, but a positive coefficient of determination.
True The coefficient of correlation is the square root of the coefficient of determination, and the square root has both positive and negative possibilities.
True/False: When using the Pearson-Tukey Method, you assess the 0.05, 0.5 and 0.95 fractiles only.
True The decision maker uses the .05, .5, and .95 fractiles from the CDF and assigns probabilities of .185, .63 and .185 respectively. This method provides results comparable to the bracket median technique.
True/False: Z-score is (plus or minus) the number of standard deviations that an observation is away from the mean.
True.
True/False: A low T-ratio for the coefficient of an independent variable is a concern because it indicates that the true coefficient may be zero or close to zero.
True. The T-ratio measures the number of standard deviations from zero of the coefficient of the independent variable. Many analysts use 2 as the magic number. If the T-ratio is less than 2, it indicates that the coefficients may be zero and there is no relationship between the independent and dependent variables.
True/False: the type of probability described in the statement "the probability of a randomly selected person having brown hair is 80% if it is a woman" is a conditional property.
True. Joint probability is the probability of two events occurring together, while conditional probability is the probability of one event occurring conditional upon another that is already known or has already occurred.
True/False: The mean, median and mode are all the same in a normal distribution
True. the mean of a normal distribution is also the median, since half of the data points fall on each side. The mean is also the most likely outcome (the outcome having the highest probability of occurring), which is why it sits atop the bell-shaped curve; thus, the mean is the mode as well.
True/False: Standard deviation is a measure of spread or dispersion
True. Standard Deviation measures the Variance, which measures spread and dispersion.
True/False: In a study, the correlation coefficient between class attendance and grades for a group of students was 0.18. Thus 3.24% of the variation in grades was explained by differences in class attendance.
True. The coefficient of determination is the square of the correlation coefficient.
True/False: If the data points in a trend line are plotted on a graph, a trend line can be fitted to the data using the least squares method.
True. The least squares method attempts to find the line which minimizes the sum of the squared deviations (distances) of the data points to the trend line.
True/False: A regression analysis attempts to find the line through a scatter of data points which minimizes the sum of the squared deviations of the points from the line.
True. The line that minimizes the sum of the squared deviations of the data points from it is referred to as having the best fit.
True/False: the residual is the difference between the actual value and the predicted value of a dependent variable.
True: The difference between the Y-value of a data point and the predicted value corresponding to it on the regression line is called the residual.
True/False: the Contribution Margin is the amount that can be contributed to fixed costs.
True: the contribution margin is the amount the company receives from the sales of its product minus the product's variable costs. Therefore, the amount remaining (after variable costs) can be used to pay the company's fixed costs.
A company is making a product and has invested $100,000 on an advertising campaign and $75,000 each on five salespeople (annual salary, including benefits and support). These are the only fixed costs that the company has assigned to the product, and the contribution margin per unit is $50. To cover those fixed costs, how many units will the company have to sell to breakeven?
[($75,000*5) + $100,000] / $50/unit = 9,500 (breakeven level in units)
A typing instructor builds a regression model to investigate what factors determine typing speed for students with two months of instruction. Her regression equation looks like: Y' = 11 + 7x1 + 5x2 + 3x3 where: Y' = typing speed in words per minute; x1= hours of instruction per week; x2= hours of practice per week; x3 = hours of typing per week necessary for school or work; A new student is taking 2 hrs of typing instruction per week, will practice 5 hrs per week and must type 2.5 hours per week for work. If the standard error of the estimate is 2, within what range do we have a 95.45% probability that that student's typing speed will be in two months? Select one: a. 53.5 and 61.5 words per minute b. 49.5 and 65.5 words per minute c. 57.5 and 65.5 words per minute d. none of the above
a. 53.5 and 61.5 words per minute I do not know how to calculate this.
A certain population is normally distributed with a mean value of 44. There is a 0.00135 probability that the next sample will have a value less than 21.5. What is the standard deviation of this distribution? a. 7.5 b. 6.7 c. 9.2 d. none of the above Use the Normal Distribution Probability Table in Ch 4, Appendix C
a. 7.5
Let us imagine that the number of automobile accidents in a certain region are related to the regional number of registered automobiles in tens of thousands (b1), alcoholic beverage sales in $10,000 (b2), and decrease in the price of gasoline in cents (b3). Furthermore, imagine that the regression formula has been calculated as: Y = a + b1X1 + b2X2 + b3X3 where Y = the number of automobile accidents, a = 7.5, b1 = 3.5, b2 = 4.5, and b3 = 2.5 Calculate the expected number of automobile accidents for a football weekend if the region has 25,000 registered vehicles, $75,000 worth of beer is sold, and a gas war causes a 10 cent drop in a gallon of gas. Select one: a. 75 b. 475 c. 45 d. 306
a. 75 I did not get this answer.
A man buys 3 burgers and 2 jumbo deluxe fries for $7.40. A woman buys one burger and 4 jumbo deluxe fries for $7.80. How much is the burger and how much are the fries? Select one: a. Burger = $1.40, Fries = $1.60 b. Burger = $1.50, Fries = $1.80 c. Burger = $2.80, Fries = $2.00 d. Burger = $2.00, Fries = $2.80
a. Burger = $1.40, Fries = $1.60
When you develop a string of simple averages by adding a data sample at a new time period and dropping the oldest data sample you have a: a. Moving Average. b. Simple Average. c. Weighted Average. d. Trend Analysis.
a. Moving Average.
Weighting factors for a weighted moving average forecast a. weight the most recent data heaviest. b. weight the oldest data heaviest. c. weight all the data the same. d. weight the data in accordance with natural business cycles.
a. weight the most recent data heaviest.
A study is being made of the relationship between seniority, i.e., years of service with the company, and the number of workdays absent per year. The following regression line is derived from the data: Days Absent = 9.44 -1.09(Years Employed) The best estimate of the number of times a 5-year employee will be absent is Select one: a. 8.35 b. 3.99 c. 5.45 d. None of these make sense
b. 3.99 I do not know how to calculate this.
The Atlanta Braves marketing staff knows it has 20,000 seats in the stadium priced at $20 per ticket, 13,000 priced at $30 per ticket, and 17,000 priced at $50 per ticket. Jim says that the marketing materials should say that average ticket price is $30, Jill says it should be $33, and Fred says it should be $35.20. Who is most correct? a. Jim b. Jill c. Fred d. none of the above
b. Jill
Solve for x: (2x + 3)/5 + (x +1)/4 =2 a. 13/20 b. -1 c. 23/13 d. 20/12
c. 23/13
A coefficient of determination of 0.94 for a regression analysis would indicate Select one: a. 6% of the variation is explained by the regression equation b. 94 % of the variation is not explained by the regression equation c. 94% of the variation is explained by the regression equation d. 6% of the variation is random
c. 94% of the variation is explained by the regression equation Coefficient of determination = explained variation/total variation, or r^2 = EV/TV
When analyzing data where a steady increase or decrease over time can be observed, which method of forecasting would best fit and would probably predict a similar increase or decrease? a. Modified Trend Method b. Weighted Series Method c. Trend Analysis Method d. Normal Curve Method e. Moving Average Method
c. Trend Analysis Method
Expected Monetary Value (EMV) utilizes Select one: a. binomial distribution b. median values c. averages d. none of the above
c. averages
The Miramar Company is going to introduce one of three new products: a wrench, a hammer, or a nut remover. The market conditions (favorable, stable, or unfavorable) will determine the profit or loss the company realizes. A market research firm will do a survey to predict future market conditions. The results will indicate either positive or negative market conditions. There is a 0.60 probability of a positive report given favorable market conditions, a 0.30 probability of a positive report given stable market conditions, and a 0.10 probability of a positive report given unfavorable conditions. The survey will cost $2,000. The first node of this decision tree will be a a. chance node with Favorable, Stable, and Unfavorable as branches b. decision node with Wrench, Hammer, and Nut remover as branches c. decision node with buy survey and do not buy survey as branches d. chance node with favorable and unfavorable market conditions as branches
c. decision node with buy survey and do not buy survey as branches
Which of the following is a dummy variable? Select one: a. fish weight b. fish length c. fish species d. None of these make sense
c. fish species
Suppose a population numbers in the millions. If one takes a random sample from that population of an appropriate size to meet normality assumptions, the mean of the sample will be the same as the mean of the population. a. always true b. always false c. may be true, but unlikely d. may be false, but unlikely
c. may be true, but unlikely
A real estate agent says he can approximate the value of a house through the following equation: SP = 125,000 + 3000BR + 500BDR + 4000WC -6000P; where BR= # of bathrooms, BDR= # bedrooms, WC =Wine cellar and P=Pool. The best selling price estimate for a 3 bedroom, 2 bath house with a wine cellar and pool is Select one: a. $133,000 b. $132,500 c. $131,000 d. $130,500
d. $130,500
When gathering times series data for a trend analysis, it is important to collect the data at the same time each period because a. it's easier to remember. b. it reduces variation. c. it increases accuracy. d. all of the above. e. none of the above.
d. all of the above.
The graph for the equation y = 2x would look like: a. a vertex. b. two straight lines. c. a parabola. d. none of the above.
d. none of the above. - it would be one straight line
The value of an event node is a. the sum of the values on the branches emanating from it. b. the value of the next node on the branch the decision maker decides to take. c. the value of the branch the decision maker decides to take. d. the expected value of the branches emanating from it.
d. the expected value of the branches emanating from it.
Scatter Diagram
displays data of two variables. Similar to those done in time series except that the data follows no clear progression through time.
Weighted Average
includes as many data samples as desired and assigns "weights" or measures of importance to each
Moving Average
similar to simple average except that this method only incorporates the most recent data samples
To separate an unknown variable from its exponent one should:
multiply the exponent by its inverse
Which of the following are fixed costs: Sales, office payroll (receptionist & bookeeper), advertising, home remodeling, office remodeling, sales commission, interest expense
office payroll, advertising, office remodeling, interest expense
Event node
represented by circles on a decision tree; represents points of uncertainty where one of two or more things will happen that are out of the control of the decision maker
Decision node
represented by squares on a decision tree; show where a decision between two or more alternatives must be made
Standard error is calculated the same as...
standard deviation
Decomposition
the process of breaking a decision down into parts and analyzing alternatives and their consequences.
