Quantitative Analysis Study Guide

Naive Model

A TIME SERIES forecasting model in which the forecast for the next period is the actual value for the current period is the

Model

A ________ is a representation of reality or a real-life situation

Decision Variable

A controllable variable is also called a

The Delphi method

A judgmental forecasting technique that uses decision makers, staff personnel, and respondent to determine a forecast is called

1 month to 1 year

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

Tracking Signal

A method to measure how well predictions fit actual data is

True

A scatter diagram is a graphical depiction of the relationship between the dependent and independent variables.

Decision Theory

An analytic and systematic approach to the study of decision making is referred to as

stepwise regression

An automated process to systematically add or delete independent variables from a regression model is called

Revised Probabilities

Bayes' theorem is used to calculate

a sequence of decisions must be made.

Decision trees are particularly useful when

Posterior Probabilities

In Bayesian analysis, conditional probabilities are also known as which of the following?

Random Pattern

In a good regression model the residual plot shows

magnify favorable outcomes and ignore bad outcomes

Optimistic decision makers tend to

a continuous bell-shaped distribution.

Properties of the normal distribution include

Poisson probability distribution.

Queuing Theory makes use of the

True

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

True

T or F A sensitivity analysis allows a manager to answer the "what if" questions.

Objective Probability

The classical method of determining probability is

Adaptive Smoothing

The computer monitoring of tracking signals and self-adjustment is referred to as

Exponential Distribution

The length of time that it takes the tollbooth attendant to service each driver can typically be described by the

Fixed Cost / (Selling Price Per Unit - Variable Cost Per Unit)

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

A good decision considers all alternatives

What makes the difference between good decisions and bad decisions?

Goal Seek

Which Excel feature allows the user to specify a target or goal and the variable that is desired to change in order to achieve that goal?

The errors are independent

Which of the following is an assumption of the regression model?

Exponential smoothing

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

demand is greater than the forecast.

A tracking signal was calculated for a particular set of demand forecasts. This tracking signal was positive. This would indicate that

Risk

In decision making under ________, there are several possible outcomes for each alternative, and the decision maker knows the probability of occurrence of each outcome.

Conditional Values

In decision theory, we call the payoffs resulting from each possible combination of alternatives and outcomes

Square

In the construction of decision trees, which of the following shapes represents a decision node?

Circle

In the construction of decision trees, which of the following shapes represents a state of nature node?

experience and judgment.

Subjective probability assessments depend on

False

T or F A moving average forecasting method is a causal forecasting method

True

T or F A probability is a numerical statement about the chance that an event will occur.

True

T or F A scatter diagram is a graphical depiction of the relationship between the dependent and independent variables.

True

T or F A series of steps or procedures that are repeated is known as an algorithm

False

T or F All decisions that result in a favorable outcome are considered to be good decisions.

True

T or F Another name for a dummy variable is a binary variable.

True

T or F Expected monetary value (EMV) is the average or expected monetary outcome of a decision if it can be repeated a large number of times.

False

T or F Four components of time series are trend, moving average, exponential smoothing, and seasonality.

False

T or F Management support and user involvement are not essential in the successful implementation of quantitative analysis projects.

True

T or F Model variables can be controllable or uncontrollable

True

T or F Multicollinearity exists when a variable is correlated to other variables.

True

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

True

T or F One problem in using a quantitative model is that the necessary data may be unavailable.

False

T or F Subjective probability implies that we can measure the relative frequency of the values of the random variable.

True

T or F The best model is a statistically significant model with a high r-square and few variables.

True

T or F The coefficient of determination gives the proportion of the variability in the dependent variable that is explained by the regression equation.

True

T or F The correlation coefficient has values between -1 and +1.

True

T or F The decision theory processes of maximizing expected monetary value (EMV) and minimizing expected opportunity loss (EOL) should lead us to choose the same alternatives.

True

T or F The multiple regression model includes multiple slope coefficients.

False

T or F The process of isolating linear trend and seasonal factors to develop a more accurate forecast is called regression.

True

T or F The regression line minimizes the sum of the squared errors

False

T or F The standard deviation equals the square of the variance.

True

T or F The use of "expert opinion" is one way to approximate subjective probability values.

Multicollinearity

The condition of an independent variable being correlated to one or more other independent variables is referred to as

the average value of the distribution.

The expected value of a probability distribution is

The errors should have a standard deviation equal to one.

Which of the following is not an assumption of the regression model?

Random Selection

Which of the following is not considered a criteria for decision making under uncertainty?

subjective solutions

Which of the following is not considered a possible problem in the quantitative analysis approach?

Variance

Which of the following is not considered to be one of the components of a time series?

They can only be integer values.

Which of the following is not true about continuous random variables?

List the payoff or profit of each combination of alternatives and outcomes.

Which of the following is the fourth step of the "Six Steps in Decision Making"?

The F distribution is useful in testing hypotheses about variance

Which of the following statements concerning the F distribution is true?

If the value of the adjusted r 2 increases as more variables are added to the model, the variables should remain in the model.

Which of the following statements provides the best guidance for model building?

Prescriptive analytics

Which of the following techniques involves the use of optimization methods to provide new and better ways to operate based on specific business objectives?

Management Science

Which of the following terms is interchangeable with quantitative analysis?

Fredrick W. Taylor

Who is credited with pioneering the principles of the scientific approach to management?