Question 1
Daily demand for newspapers for the last 10 days has been as follows: 12, 13, 16, 15, 12, 18, 14, 12, 13, 15 (listed from oldest to most recent). What are the forecast sales for the next day using a threeday weighted moving average where the weights are 3, 1, and 1 (the highest weight is for the most recent number)?
Question 1 options:
13.0
70.0
14.0
12.8
None of the above
Question 2
A seasonal index of __________ indicates that the season is average.
Question 2 options:
100
1
0.5
0
10
Question 3
Which Excel feature is an optimization technique that can maximize or minimize a quantity given a set of limitations or constraints?
Question 3 options:
Optimizer
Analysis ToolPak
Solver
Algorithm Builder
Goal Seek
Question 4
Which of the following is not classified as a qualitative forecasting model?
Question 4 options:
Exponential smoothing
Delphi method
Consumer market survey
Sales force composite
Jury of executive opinion
Question 5
A plant manager is considering buying additional stamping machines to accommodate increasing demand. The alternatives are to buy 1 machine, 2 machines, or 3 machines. The profits realized under each alternative are a function of whether their bid for a recent defense contract is accepted or not. The payoff table below illustrates the profits realized (in $000's) based on the different scenarios faced by the manager.
Alternative Bid Accepted Bid Rejected
Buy 1 machine $10 $5
Buy 2 machines $30 $4
Buy 3 machines $40 $2
Using the information above, which alternative should be chosen based on the maximin criterion?
Question 5 options:
Buy 2 machines
Buy 3 machines
Buy 1 machine
Question 6
Our department store is having a sale on personal computers, of which three are in stock (no rain checks). There is a certain probability of selling none. The probability of selling one is twice as great as the probability of selling none. The probability of selling two is three times the probability of selling none. Finally, the probability of selling all the personal computers is four times as great as the probability of selling none.
Using the above information, what is the probability of selling all three personal computers? Hint: Let the probability of selling none equal x.
Question 6 options:
0.32
0.4
0.44
0.36
Question 7
Mutually exclusive events exist if only one of the events can occur on any one trial.
Question 7 options:
True
False
Question 8
Which of the following is not a common pitfall of regression?
Question 8 options:
Using a regression equation beyond the range of X is very questionable.
If the assumptions are not met, the statistical tests may not be valid.
Two variables may be highly correlated to one another but one is not causing the other to change.
Concluding that a statistically significant relationship implies practical value.
Nonlinear relationships cannot be incorporated.
Question 9
Consider the following gasoline data:
Quarter 
Year 1 
Year 2 
Average twoyear demand 
Quarterly demand

Average seasonal index 
1 
150 
156 
153 
164.25 
.932 
2 
140 
148 
144 
164.25 
.877 
3 
185 
201 
193 
164.25 
1.175 
4 
160 
174 
167 
164.25 
1.017 
Referring to the information above, suppose we expect year 3 to have annual demand of 800. What is the forecast value for the second quarter in year 3?
Question 9 options:
186.00
182.64
175.34
175.00
Question 10
A large school district is reevaluating its teachers' salaries. They have decided to use regression analysis to predict mean teachers' salaries at each elementary school. The researcher uses years of experience to predict salary. The resulting regression equation was:
Y = 24,266.98 + 1,289.10X, where Y = salary, X = years of experience
Assume a teacher has five years of experience. What is the forecasted salary?
Question 10 options:
$31,688.88
$29,688.28
$29,712.08
$30,712.48
Question 11
The number of cell phone minutes used by high school seniors follows a normal distribution with a mean of 500 and a standard deviation of 50. What is the probability that a student uses fewer than 400 minutes?
Question 11 options:
None of the above
0.023
0
0.159
0.977
Question 12
A controllable variable is also called:
Question 12 options:
a measurable quantity.
a parameter.
a decision variable.
none of the above.
a mathematical model.
Question 13
A mediumterm forecast is considered to cover what length of time?
Question 13 options:
510 years
20 years
1 month to 1 year
24 weeks
24 years
Question 14
A mediumterm forecast typically covers a two to fouryear time horizon.
Question 14 options:
True
False
Question 15
Determining the best payoff for each alternative and choosing the alternative with the “best of the best” is the approach called:
Question 15 options:
expected monetary value
Laplace
maximax
maximin
minimax regret
Question 16
A plant manager is considering buying additional stamping machines to accommodate increasing demand. The alternatives are to buy 1 machine, 2 machines, or 3 machines. The profits realized under each alternative are a function of whether their bid for a recent defense contract is accepted or not. The payoff table below illustrates the profits realized (in $000's) based on the different scenarios faced by the manager.
Alternative Bid Accepted Bid Rejected
Buy 1 machine $10 $5
Buy 2 machines $30 $4
Buy 3 machines $40 $2
Using the information above, which alternative should be chosen based on the minimax regret criterion?
Question 16 options:
Buy 2 machines
Buy 3 machines
Buy 1 machine
Question 17
An urn contains seven blue and three yellow chips. If the drawing of chips is done with replacement, what is the probability of drawing a blue chip on the second draw given that a yellow chip was drawn on the first draw?
Question 17 options:
0.700
0.300
0.027
0.210
Question 18
Consider the following gasoline data:
Referring to the information above, what is the seasonal index for fourth quarter?
Question 18 options:
.899
.977
1.175
1.017
Question 19
A prediction equation for sales and payroll was performed using simple linear regression. In the regression printout shown below, which of the following statements is not true?
Question 19 options:
Payroll is not a good predictor of Sales based on α = 0.01.
Payroll is the independent variable.
The coefficient of determination is equal to 0.833333.
Payroll is a good predictor of Sales based on α = 0.05.
There is evidence of a positive linear relationship between Sales and Payroll based on α = 0.05.
Question 20
As one increases the number of periods used in the calculation of a moving average:
Question 20 options:
it requires a computer to automate the calculations.
the emphasis placed on more recent data remains the same.
less emphasis is placed on more recent data.
greater emphasis is placed on more recent data.
one is usually looking for a longterm prediction.
Question 21
If we roll a single die twice, the probability that the sum of the dots showing on the two rolls equals four (4), is 1/6.
Question 21 options:
True
False
Question 22
A local ice cream shop sells 10,000 cones of vanillaflavored ice cream each year. The cones are ordered from an outside supplier and it takes 5 days for each shipment of cones to arrive. Ordering costs are estimated at $15 per order. Carrying costs are $5 per cone per year. Assume that the ice cream shop is open 250 days a year. What is the total cost of ordering and carrying the ice cream cones?
Question 22 options:
$2,121.32
$612.37
$1,224.74
$707.11
Question 23
What is the formula for the breakeven point of a simple profit model?
Question 23 options:
Selling price per unit — (fixed cost / variable cost per unit)
Fixed cost / (variable cost per unit — selling price per unit)
Fixed cost / variable cost per unit
(Selling price per unit — variable cost per unit) / fixed cost
Fixed cost / (selling price per unit — variable cost per unit)
Question 24
Consider the following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature S1, S2, and S3.
S1 S2 S3
A $60 $145 $120
B $75 $125 $110
C $95 $85 $130
Refer to the payoff table. What is the expected value under certainty? Assume P(S1) = 0.5 and P(S2) = 0.25.
Question 24 options:
$116.25
$101.25
$108.33
$103.33
$136.25
Question 25
The most common quantitative causal model is regression analysis.
Question 25 options:
True
False
Question 26
Suppose that you believe that a cubic relationship exists between the independent variable X (of time) and the dependent variable Y. Which of the following would represent a valid linear regression model?
Question 26 options:
Y = b0 + 3b1 X, where X = time
Y = b0 + b1 X, where X = time3
Y = b0 + b1 X3, where X = time
Y = b0 + 3b1 X, where X = time3
Y = b0 + b1 X, where X = time1/3
Question 27
What is the correct equation for computing the expected value of perfect information (EVPI)?
Question 27 options:
EVPI = expected value under certainty  expected value under risk for best alternative.
EVPI = expected value with sample information  expected value without sample information.
EVPI = expected value under risk for best alternative  expected value under certainty.
EVPI = expected value without sample information  expected value with sample information.
None of the above
Question 28
A plant manager is considering buying additional stamping machines to accommodate increasing demand. The alternatives are to buy 1 machine, 2 machines, or 3 machines. The profits realized under each alternative are a function of whether their bid for a recent defense contract is accepted or not. The payoff table below illustrates the profits realized (in $000's) based on the different scenarios faced by the manager.
Alternative Bid Accepted Bid Rejected
Buy 1 machine $10 $5
Buy 2 machines $30 $4
Buy 3 machines $40 $2
Refer to the information above. Assume that based on historical bids with the defense contractor, the plant manager believes that there is a 65% chance that the bid will be accepted and a 35% chance that the bid will be rejected.
What is the expected value under certainty?
Question 28 options:
1.95
1.05
27.75
17.25
Question 29
Suppose that you enter a drawing by obtaining one of 20 tickets that have been distributed. By using the classical method, you can determine that the probability of your winning the drawing is 0.05.
Question 29 options:
True
False
Question 30
Model variables can be controllable or uncontrollable.
Question 30 options:
True
False
uestion 31
If computing a causal linear regression model of Y = a + bX and the resultant r^{2} is very near zero, then one would be able to conclude that:
Question 31 options:
a multiple linear regression model is a good forecasting method for the data.
Y = a + bX is not a good forecasting method.
a multiple linear regression model is not a good forecasting method for the data.
Y = a + bX is a good forecasting method.
none of the above.
Question 32
The number of phone calls coming into a switchboard in the next five minutes will either be 0, 1, 2, 3, 4, 5, or 6. The probabilities are the same for each of these (1/7). If X is the number of calls arriving in a fiveminute time period, what is the mean of X?
Question 32 options:
4
5
3
2
None of the above
Question 33
The economic order quantity (EOQ) formula assumes that all input data are known with certainty.
Question 33 options:
True
False
Question 34
The coefficient of determination resulting from a particular regression analysis was 0.85. What was the slope of the regression line?
Question 34 options:
0.85
There is insufficient information to answer the question.
0.922
0.85
None of the above
Question 35
A bakery buys sugar in 15pound bags. The bakery uses 5000 bags of sugar each year. Carrying costs are $20 per bag per year. Ordering costs are estimated at $5 per order. Assume that the bakery is open 250 days a year and its daily demand is estimated at 20 bags. It takes 5 days for each order of sugar to be filled. What is the minimum inventory held in a given EOQ cycle?
Question 35 options:
0 bags
100 bags
2500 bags
50 bags
25 bags
Question 36
Decision variables may also be called parameters.
Question 36 options:
True
False
Question 37
Consider the following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature S1, S2, and S3.

S1 
S2 
S3 
A 
$60 
$145 
$120 
B 
$75 
$125 
$110 
C 
$95 
$85 
$130 
Refer to the payoff table. Using the Laplace criterion, what would be the highest expected payoff?
Question 37 options:
$145
$125
$108.3
$120
$103.3
Question 38
A local ice cream shop sells 10,000 cones of vanillaflavored ice cream each year. The cones are ordered from an outside supplier and it takes 5 days for each shipment of cones to arrive. Ordering costs are estimated at $15 per order. Carrying costs are $5 per cone per year. Assume that the ice cream shop is open 250 days a year. What is the average inventory of cones held in a given ordering cycle?
Question 38 options:
122.47
244.95
141.42
70.71
Question 39
A scatter diagram is useful to determine if a relationship exists between two variables.
Question 39 options:
True
False
Question 40
An urn contains seven blue and three yellow chips. If the drawing of chips is done with replacement, what is the probability of drawing a yellow chip on the second draw given that a blue chip was drawn on the first draw.
Question 40 options:
0.210
0.027
0.700
0.300
Question 41
Arrivals in a university advising office during the week of registration are known to follow a Poisson distribution with an average of four people arriving each hour. What is the probability that exactly four people will arrive in the next hour?
Question 41 options:
0.1923
0.1813
0.1865
0.1954
P(X=4) = 0.1954
Question 42
Models that do not involve risk or chance are __________.
Question 42 options:
None of the above
probabilistic models
postoptimality models
deterministic models
MIS models
Question 43
If two events are mutually exclusive, the probability of both events occurring is simply the sum of the individual probabilities.
Question 43 options:
True
False
Question 44
The equation P(AB) = P(AB)/P(B) is:
Question 44 options:
only relevant when events A and B are collectively exhaustive.
the formula for a conditional probability.
none of the above
the formula for a joint probability.
the marginal probability.
Question 45
Daily demand for newspapers for the last 10 days has been as follows: 12, 13, 16, 15, 12, 18, 14, 12, 13, 15 (listed from oldest to most recent). What are the forecast sales for the next day using a twoday moving average?
Question 45 options:
15
28
14
13
12.5
Question 46
Which of the following is not a caution/pitfall of regression?
Question 46 options:
Correlation does not necessarily mean causation.
Interpretation inside the range of X values is questionable.
If the assumptions are not met, the statistical test may not be valid.
Using the Ftest and concluding a linear relationship is helpful in predicting Y does not mean that this is the best relationship.
Question 47
A production process is known to produce a particular item in such a way that five percent of these are defective. If two items are randomly selected as they come off the production line, what is the probability that both are defective (assuming that they are independent)?
Question 47 options:
0.0025
0.0250
0.1000
0.2000
0.0100
Question 48
The expected value of a probability distribution is:
Question 48 options:
the average value of the distribution.
the variance of the distribution.
the range of continuous values from point A to point B, inclusive.
the measure of the spread of the distribution.
the probability density function.
Question 49
Which of the following terms is interchangeable with quantitative analysis?
Question 49 options:
Economics
Statistics
None of the above
Management science
Financial analysis
Question 50
The number of cars passing through an intersection in the next five minutes can usually be described by the:
Question 50 options:
exponential distribution.
uniform distribution.
Poisson distribution.
None of the above
normal distribution.
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