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##### SAINT GBA334 midterm exam 100% correct

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Question;A plant manager is considering buying additional stamping;machines to accommodate increasing demand. The alternaties are to buy 1;machine, 2 machines, or 3 machines. The profits realized under each alternatie;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.;Alternatie;Bid Accepted Bid;Rejected;Buy 1 machine;$10 $5;Buy 2 machines;$30 $4;Buy 3 machines;$40 $2;Using the information aboe, which alternatie should be;chosen based on the maximax criterion?;: Buy 1 machine;Buy 2 machines;Buy 3 machines;: 2;of 2;Question 2. Question;: A plant manager is considering;buying additional stamping machines to accommodate increasing demand. The;alternaties are to buy 1 machine, 2 machines, or 3 machines. The profits;realized under each alternatie 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.;Alternatie;Bid Accepted Bid;Rejected;Buy 1 machine;$10 $5;Buy 2 machines;$30 $4;Buy 3 machines;$40 $2;Refer to the information aboe. Assume that based on;historical bids with the defense contractor, the plant manager beliees 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 alue under certainty?;: 1.05;1.95;17.25;27.75;: 2;of 2;Question 3. Question;: ?The probability of eent B, gien;that eent A has occurred? is known as a __________ probability.;: continuous;marginal;simple;joint;conditional;: 2;of 2;Question 4. Question;: Assume that you hae an urn;containing 10 balls of the following description;4 are white (W) and lettered (L);2 are white (W) and numbered (N);3 are yellow (Y) and lettered (L);1 is yellow (Y) and numbered (N);If you draw a numbered ball (N), the probability that this;ball is white (W) is 0.60.;: True;False;: 2;of 2;Question 5. Question;: What is the formula for the;break-een point of a simple profit model?;: Fixed cost / ariable cost per unit;(Selling price per unit ? ariable cost per;unit) / fixed cost;Fixed cost / (selling price per unit ? ariable;cost per unit);Fixed cost / (ariable cost per unit ? selling;price per unit);Selling price per unit ? (fixed cost / ariable;cost per unit);: 2;of 2;Question 6. Question;: Arrials in a uniersity adising;office during the week of registration are known to follow a Poisson;distribution with an aerage of four people arriing each hour. What is the;probability that exactly four people will arrie in the next hour?;: 0.1813;0.1865;0.1923;0.1954;: 2;of 2;Question 7. Question;: The economic order quantity;(EOQ) formula assumes that all input data are known with certainty.;True;False;: 2;of 2;Question 8. Question;: The use of "expert;opinion" is one way to approximate subjectie probability alues.;True;False;: 2;of 2;Question 9. Question;: Properties of the normal;distribution include;a continuous bell-shaped distribution.;a discrete probability distribution.;the number of trials is known and is either;1, 2, 3, 4, 5, etc.;the random ariable can assume only a finite;or limited set of alues.;use in queuing.;: 2;of 2;Question 10. Question;: Expressing profits through the;relationship among unit price, fixed costs, and ariable costs is an example of;: a sensitiity analysis model.;a quantitatie analysis model.;a postoptimality relationship.;a parameter specification model.;none of the aboe.;: 2;of 2;Question 11. Question;: A bakery buys sugar in;15-pound 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 are the total;annual holding costs?;$500;$1000;$20;$750;$250;: 2;of 2;Question 12. Question;: A plant manager is considering;buying additional stamping machines to accommodate increasing demand. The;alternaties are to buy 1 machine, 2 machines, or 3 machines. The profits;realized under each alternatie 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.;Alternatie;Bid Accepted Bid;Rejected;Buy 1 machine;$10 $5;Buy 2 machines;$30 $4;Buy 3 machines;$40 $2;Using the information aboe, which alternatie should be;chosen based on the Laplace criterion?;: Buy 1 machine;Buy 2 machines;Buy 3 machines;: 2;of 2;Question 13. Question;: Determining the aerage payoff;for each alternatie and choosing the one with the best payoff is the approach;called;: maximax;maximin;Laplace;minimax regret;expected monetary alue;: 2;of 2;Question 14. Question;: Bob White is conducting;research on monthly expenses for medical care, including oer-the-counter;medicine. His dependent ariable is monthly expenses for medical care while his;independent ariable is number of family members. Below is his Excel output.;Click here to iew an Excel ersion of this output;Referring to the information aboe, based on his model, each;additional family member increases the predicted costs by how much?;: $110.47;$16.83;$93.64;$127.30;: 2;of 2;Question 15. Question;: A controllable ariable is also;called;: a parameter.;a decision ariable.;a mathematical model.;a measurable quantity.;none of the aboe.;: 2;of 2;Question 16. Question;: A seasonal index of;indicates that the season is aerage.;: 10;100;0.5;0;1;: 2;of 2;Question 17. Question;: In the exponential smoothing;with trend adjustment forecasting method, missing something is the;slope of the trend line.;new forecast.;Y-axis intercept.;independent ariable.;trend smoothing constant.;: 0;of 2;Question 18. Question;: Assume that you hae an urn;containing 10 balls of the following description;4 are white (W) and lettered (L);2 are white (W) and numbered (N);3 are yellow (Y) and lettered (L);1 is yellow (Y) and numbered (N);If you draw a lettered ball (L), the probability that this;ball is white (W) is 0.571.;True;False;: 2;of 2;Question 19. Question;: The condition of improper data;yielding misleading results is referred to as;garbage in, garbage out.;break-een point.;uncontrollable ariable.;postoptimality.;none of the aboe.;: 2;of 2;Question 20. Question;: Bob White is conducting;research on monthly expenses for medical care, including oer-the-counter;medicine. His dependent ariable is monthly expenses for medical care while his;independent ariable is number of family members. Below is his Excel output.;Click here to iew an Excel ersion of this output;Referring to the information aboe, what percent of the ariation;in medical expenses is explained by the size of the family?;48.3%;49.6%;50.6%;51.3%;: 2;of 2;Question 21. Question;: Our department store is haing;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 aboe information, what is the probability of;selling no personal computers? Hint: Let the probability of selling none equal;x.;: 0.05;0.08;0.1;0.2;: 2;of 2;Question 22. Question;: A medium-term forecast is;considered to coer what length of time?;: 2-4 weeks;1 month to 1 year;2-4 years;5-10 years;20 years;: 2;of 2;Question 23. Question;: If two eents are mutually;exclusie, then;: their probabilities can be added.;they may also be collectiely exhaustie.;the joint probability is equal to 0.;if one occurs, the other cannot occur.;All of the aboe;: 2;of 2;Question 24. Question;: Arrials at a fast-food;restaurant follow a Poisson distribution with a mean arrial rate of 16;customers per hour. What is the probability that in the next hour there will be;exactly 12 arrials?;: 0.0000;0.0661;0.7500;0.1322;None of the aboe;: 2;of 2;Question 25. Question;: The Department of Motor ehicles;(DM) can serice customers at a rate of 20 per hour (or 1/3 per minute) when it;comes to license renewals. The serice time follows an exponential distribution.;What is the probability that it will take less than three minutes for a;particular customer to get a license renewal?;: 0.5;0;1;0.368;0.632;: 2;of 2;Question 26. Question;: Demand for soccer balls at a;new sporting goods store is forecasted using the following regression equation;Y = 98 + 2.2X where X is the number of months that the store has been in;existence. Let April be represented by X = 4. April is assumed to hae a;seasonality index of 1.15. What is the forecast for soccer ball demand for the;month of April (rounded to the nearest integer)?;: 123;107;100;115;None of the aboe;: 2;of 2;Question 27. Question;: The best model is a;statistically significant model with a high r-square and few ariables.;True;False;: 2;of 2;Question 28. Question;: Historical data indicates that;only 20% of cable customers are willing to switch companies. If a binomial;process is assumed, then in a sample of 20 cable customers, what is the;probability that no more than three customers would be willing to switch their;cable?;: 0.85;0.15;0.20;0.411;0.589;: 2;of 2;Question 29. Question;: A seasonal index of 1 means;that the season is aerage.;True;False;: 2;of 2;Question 30. Question;: Which of the following is true;regarding a regression model with multicollinearity, a high r2 alue, and a low;F-test significance leel?;: The model is not a good prediction model.;The high alue of r2 is due to the;multicollinearity.;The interpretation of the coefficients is aluable.;The significance leel tests for the;coefficients are not alid.;The significance leel for the F-test is not alid.;: 2;of 2;Question 31. Question;: Bob White is conducting;research on monthly expenses for medical care, including oer-the-counter;medicine. His dependent ariable is monthly expenses for medical care while his;independent ariable is number of family members. Below is his Excel output.;Click here to iew an Excel ersion of this output;Referring to the information aboe, the significance F-test;is this model a good prediction equation?;Yes;No;: 2;of 2;Question 32. Question;: The length of time that it;takes the tollbooth attendant to serice each drier can typically be described;by the;: normal distribution.;uniform distribution.;exponential distribution.;Poisson distribution.;None of the aboe;: 2;of 2;Question 33. Question;: Time-series models attempt to;predict the future by using historical data.;True;False;: 2;of 2;Question 34. Question;: 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). Forecast sales for the next day using a;two-day weighted moing aerage where the weights are 3 and 1 are;14.5;13.5;14;12.25;12.75;: 2;of 2;Question 35. Question;: Our department store is haing;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 aboe information, what is the probability of;selling all three personal computers? Hint: Let the probability of selling none;equal x.;0.4;0.32;0.36;0.44;: 2;of 2;Question 36. Question;: Bob White is conducting;research on monthly expenses for medical care, including oer-the-counter;medicine. His dependent ariable is monthly expenses for medical care while his;independent ariable is number of family members. Below is his Excel output.;Click here to iew an Excel ersion of this output;Referring to the information aboe, what is the alue of the;correlation coefficient?;: 55.278;0.695;0.483;0.474;: 2;of 2;Question 37. Question;: Loss of goodwill must be;included in stockout costs.;True;False;: 2;of 2;Question 38. Question;: The probability, P, of any eent;or state of nature occurring is greater than or equal to 0 and less than or;equal to 1.;True;False;: 2;of 2;Question 39. Question;: As one increases the number of;periods used in the calculation of a moing aerage;: greater emphasis is placed on more recent;data.;less emphasis is placed on more recent data.;the emphasis placed on more recent data remains;the same.;it requires a computer to automate the;calculations.;one is usually looking for a long-term;prediction.;: 2;of 2;Question 40. Question;: Which of the following methods;tells whether the forecast tends to be too high or too low?;: MAD;MSE;MAPE;Decomposition;Bias;: 2;of 2;Question 41. Question;: A moing aerage forecasting;method is a causal forecasting method.;: True;False;: 2;of 2;Question 42. Question;: One purpose of regression is;to understand the relationship between ariables.;True;False;: 2;of 2;Question 43. Question;: When demand is constant, the;Reorder point (ROP) is a function of demand and lead time.;True;False;: 2;of 2;Question 44. Question;: Which of the following is not;classified as a qualitatie forecasting model?;Exponential smoothing;Delphi method;Jury of executie opinion;Sales force composite;Consumer market surey;: 2;of 2;Question 45. Question;: Consider the following;gasoline data;Click here to iew an Excel ersion of this table.;Referring to the information aboe, what is the seasonal;index for fourth quarter?;1.017;1.175;.977;.899;: 2;of 2;Question 46. Question;: The classical method of;determining probability is;: subjectie probability.;marginal probability.;objectie probability.;joint probability.;conditional probability.;: 2;of 2;Question 47. Question;: A consulting firm has receied;two Super Bowl tickets from one of its clients. To be fair, the firm is;randomly selecting two different employee names to "win" the tickets.;There are six secretaries, fie consultants and four partners in the firm. Which;of the following statements is false?;: The probability of a secretary winning a;ticket on the first draw is 6/15.;The probability of a secretary winning a;ticket on the second draw gien that a consultant won a ticket on the first draw;is 6/15.;The probability of a consultant winning a;ticket on the first draw is 1/3.;The probability of two secretaries winning;both tickets is 1/7.;The probability of a partner winning a ticket;on the second draw gien that a secretary won a ticket on the first draw is;4/14.;: 2;of 2;Question 48. Question;: The EM that a person is;willing to gie up in order to aoid the risk associated with a gamble is;referred to as the;risk premium.;certainty equialent.;EPI.;EwPI.;ESI.;: 2;of 2;Question 49. Question;: Enrollment in a particular;class for the last four semesters has been 120, 126, 110, and 130 (listed from;oldest to most recent). What is the enrollment forecast for next semester using;exponential smoothing with an alpha = 0.2? Assume that an initial forecast for;the first semester was 120 (so the forecast and the actual were the same).;: 118.96;121.17;130;120;None of the aboe;: 2;of 2;Question 50. Question;: An urn contains seen 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 gien that a yellow;chip was drawn on the first draw?;: 0.027;0.210;0.300;0.700;: 2;of 2

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