DD Decision Making

Linear programming Steps

1. Understand the problem: what do we have, how many products, What is the goal, what do at want to know? 2. Calculate profit per unit: selling price - labor cost - material cost = profit 3. Identify the constraints: labor available, resources, etc 4. Solve: use excel

Hypothesis testing steps

1. specify null and alternative 2. Decide on the significance level 3. Compute value of the test statistic 4. Find critical value and compare to the test statistic value choose an appropriate statistical test 3. specify the significant level (A) (.05) 4. obtain p value from test 5. compare p value with A and make a conclusion.

Given the following data set: 9, 12, 14, 10, 8, 11, 12 What is the mode?

12

An analyst used multiple linear regression to explore how Store A's sales (y) are predicted by Store A's advertising expenditure dollars (variable x1) and the advertising expenditure dollars of Store A's competitor (variable x2). The estimated regression is y = 532 + 80.5x1 - 35.6x2. How much sales would be predicted if x1 is $1,000 and x2 is also $1,000?

45,432

The following is a graph of a normally distributed data set with a mean of 10 and a standard deviation of 2: What is the probability that a randomly selected event from the data set will be between 8 and 12?

68.2%

The number of customers that an automobile service shop receives on any given day is normally distributed with a mean of 75 and a standard deviation of 25. On a given day, 125 oil changes are performed. What is the probability on a given day of 125 or fewer oil changes performed?

97.7%

linear programming

A mathematical technique used to help management decide how to make the most effective use of an organization's resources to achieve the best outcome. Allows for systematic comparison of alternatives to determine which set of choices is best for meeting an objective. Linear programming might be used to schedule the operations of multiple machines or to prioritize expenditures on raw materials.

Null Hypothesis (H0)

A statement of "no difference."

A nonprofit organization ran an email 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

ANOVA, Correlation, and Control Charts

ANOVA - Compare outcomes of different drug testing results Correlation - Understand effective marketing to spend advertising dollars efficiently Control charts - Monitor production process

Crossover Analysis

Allows a decision maker to identify the crossover point, which represents the point at which neither plan is better than the other.

In a statistical process control analysis, sample data are collected from an assembly line and measured to see if they fall within a tolerated measurement range. If an observation does fall within the range, a "yes" is recorded. If it falls outside the range, a "no" is recorded. Which kind of data do the "yes" and "no" represent?

Attribute data

A researcher looks at moving average data on store sales and wishes to perform a multiple regression of interest rates and disposable income. What is a particular concern when performing time series multiple regression?

Autocorrelation

Which approach uses financial, customer, internal business processes, and innovation/learning measures?

Balanced scorecard

A hardware store has found that there is a 0.25 probability that a customer buys an electrical product, a 0.45 probability that a customer buys a plumbing product, and a 0.10 probability that a customer buys an electrical product if they purchase a plumbing product. Which statistical rule can be used to determine the probability that a customer buys a plumbing product given that this customer has purchased an electrical product?

Bayes' theorem

A county government must reduce spending. It wishes to eliminate incremental budgeting and align budget allocations with each of its units' strategic business objectives. How can the county apply data analytic approaches to attain this goal?

By benchmarking like strategies of successful counties

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

How does probability theory inform decision-making for managers?

By quantifying risk

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. The healthcare organization hopes this data will allow them to create early prevention programs. Which type of research design does this study describe?

Cohort study

A researcher concludes that bananas create healthy children because the researcher's notes indicate that children who eat a banana every day are healthy. Which misuse of statistics would this study be an example of if these children also eat a balanced diet and exercise daily?

Confusion of association and causality

A check sheet indicates that of 100 returned items, 50 were damaged upon delivery, 30 were the wrong size, 10 were of poor quality, 5 were a mistaken order, and 5 were returned due to the customer no longer wanting the item. What is the appropriate way to represent these data?

Construct a Pareto chart

Which two decision considerations describe fact-based decision-making, according to the quality management principles?

Decisions reduce external bias and Decisions foster trust in plans.

Which two items represent steps of results-based management?

Define resources and Study the long-term effects of the output

A manager uses a linear regression to examine how the store's retail sales are predicted by advertising expenditures. Which type of variable do retail sales represent in this regression?

Dependent variable

A national manufacturer is building an overseas factory to be closer to one of its largest markets. Which analysis technique would be appropriate when evaluating location options under risk in order to strengthen the firm's competitiveness in the new market?

Develop a decision tree

In the month of December, there is a strong positive correlation between airline ticket sales and retail sales. Which question should the researcher consider before concluding that the correlation statistic implies that airline sales drive retail sales?

Does a causal relationship truly exist?

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

Which phrase is a description of quality assurance?

Focuses on training

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

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

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 and Multiplication principle.

What is true of cost-effective analysis?

It analyzes the cost of achieving a quantifiable goal.

What is a description of data mining?

It discovers patterns or trends in large data sets.

Which two statements describe how the dedication of leadership and a focus on process enhance quality?

It ensures clearly aligned goals, and It makes results easier to manage and achieve.

What are two aspects of data quality management?

It reduces the amount of incomplete data., and It cleans data.

What is a disadvantage of a balanced scorecard?

It requires significant time and effort to establish a meaningful scorecard.

How do balanced scorecards differ from KPI dashboards?

KPI dashboards provide visual representations of KPIs, such as charts and graphs.

Which approach focuses on eliminating activities that fail to add value or satisfy customers?

Lean Operations

A company that raises turkeys is hoping to increase the rate of growth of the turkeys while controlling the cost of feeding them. 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 manager analyzes a data set that includes information on individual incomes. The manager knows that the data set is fairly representative of the general population and includes several millionaires. Based on this data set, which measure of central tendency best represents the middle of the distribution?

Median

Which two attributes indicate potential data quality issues when evaluating a set of nominal data?

Missing data and Misspelled data

A professional services firm is undergoing a business process improvement exercise to improve productivity, staff morale, and client satisfaction. Which technique should the firm use to evaluate the strength of customer service relations?

Net promoter score

A company is trying to increase its online sales revenue by improving its email advertising campaign for repeat customers as well as new customers. Which two variables would be used in determining a campaign to maximize revenue gain?

Number of purchases per email and Spending per purchase.

Which type of data are the Olympic medals of gold, silver, and bronze examples of?

Ordinal data

A researcher wants to predict student test scores based on hours spent studying. Which type of regression would be more appropriate?

Ordinary least squares regression

A college is reviewing statistics concerning student retention. The college would like to determine the most important factors that cause students to leave. The college asks a researcher to display this information using one of the seven basic tools of quality. Which tool should be used in this case?

Pareto chart

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 joint venture is established between two firms to use their core competencies to increase their market share. How would a SIPOC (suppliers, inputs, process, outputs, and customers) diagram benefit the joint venture?

Provides a holistic view of the entire operation.

A company decides to auction excess inventory on an auction website. The company has 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 the auction and final price?

R-squared

Two priorities Ayy conducting a hypothesis test

Reject the null hypothesis Fail to reject the null hypothesis

What are two reasons for the increasing use of analytics in organizational decision-making?

Relatively lower cost of computer storage, and Higher computer processing power.

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?

Response variable

A professional services firm wants to track and monitor important financial performance measures of the company (e.g., year-over-year change in revenues and profits). Which performance approach would meet the company's objective?

Results-based management

Which of Ishikawa's seven basic tools of quality is used to illustrate performance measurements over time?

Run chart

A doctoral student surveys 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 retail store notices a spike in turkey sales every November. Which time series pattern are turkey sales likely to exhibit?

Seasonal

Which common analytic measure is used to improve business performance?

Simple composite index

A soft drink manufacturer performs a control chart analysis and the results indicate that the soft drink bottles are consistently underfilled 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 underfilling an example of?

Special cause variation

After evaluating manufacturing times for a particular product, a manager determines that the times are spread out across the distribution. The manager has been asked to determine how far, on average, the time is from the mean. Which statistic roughly measures the average distance of a data point from the mean of the distribution?

Standard deviation

A manager of a call center is in charge of creating a staffing plan. The number of calls received per day is normally distributed. Which two statistics would be needed to estimate the number of calls that would be received 95% of the time?

Standard deviation and Mean

hypothesis testing

Statistics methods used to make decisions or judgements any population parameter

Which key performance indicator can a hotel chain use to measure its ability to meet client tastes and preferences?

Survey customer satisfaction upon checkout

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

Several missing values in a particular field in a dataset were observed. The likelihood of a record having a missing value is correlated to another variable in the dataset. Which two types of error might be introduced into the dataset if the removed record included missing values?

Systematic error and Omission error

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 at the 5% significance level. What can be concluded from this study?

The advertisement was effective in building brand awareness.

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.

What does True Score Theory state about a test without systematic error?

The observed score is the true score plus random error.

The management for Hospital A conducted a survey of its patients' opinions including gathering demographic data to determine which programs should be pursued during the upcoming fiscal year. Upon analyzing the response on the need for a cosmetic surgery program for the hospital, it was found that there was an r score of 0.75, and a p of 0.03 between a patient's income level and support for the creation of a cosmetic surgery department. What is an effective strategic decision based on an analysis of the given information?

There is a strong positive relationship for a cosmetic surgery program as a function of income, and this program should be developed in high income areas.

In what two ways are KPI dashboards useful in performance assessment?

They are visual representations of key areas of focus, and They show trends that represent organizational results over time.

What is a significant disadvantage of KPIs?

They require significant ongoing maintenance.

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 10 questions that rates the respective relationships. Why would the student measure the standard deviation of responses?

To measure the spread of the data

The average test score of students taking an exam was 70% with a standard deviation of 8.5%. Which tool should be used to compare a student's score to the group average?

Z-score

Break Even in Units

fixed costs / contribution margin per unit Or Fixed cost /(price-variable costs per unit)

A hospital gathers the blood pressure readings of a sample of patients. They find that the mean, median, and mode of this data set are all nearly equal and that 50% of the blood pressure readings are less than the mean and 50% are greater than the mean. Which histogram would correctly graph this data set?

perfect bell shape

Alternative Hypothesis (Ha)

the hypothesis that a proposed result is true for the population

On what axis is the independent variable graphed?

x-axis

On what axis is the dependent variable graphed?

y-axis