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Saint GBA334 midterm exam

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Question;Question 1. Question;: 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 maximax criterion?;Student Answer: Buy 1 machine;Buy 2 machines;Buy 3 machines;Points Received: 2 of 2;Comments;Question 2. Question;: 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?;Student Answer: 1.05;1.95;17.25;27.75;Points Received: 2 of 2;Comments;Question 3. Question;: ?The probability of event B;given that event A has occurred? is known as a __________ probability.;Student Answer: continuous;marginal;simple;joint;conditional;Points Received: 2 of 2;Comments;Question 4. Question;: Assume that you have 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.;Student Answer: True;False;Points Received: 2 of 2;Comments;Question 5. Question;: What is the formula for the;break-even point of a simple profit model?;Student Answer: 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);Fixed cost / (variable cost per unit ?;selling price per unit);Selling price per unit ? (fixed cost /;variable cost per unit);Points Received: 2 of 2;Comments;Question 6. Question;: 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?;Student Answer: 0.1813;0.1865;0.1923;0.1954;Points Received: 2 of 2;Comments;Question 7. Question;: The economic order quantity;(EOQ) formula assumes that all input data are known with certainty.;Student Answer: True;False;Points Received: 2 of 2;Comments;Question 8. Question;: The use of "expert;opinion" is one way to approximate subjective probability values.;Student Answer: True;False;Points Received: 2 of 2;Comments;Question 9. Question;: Properties of the normal;distribution include;Student Answer: 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 variable can assume only a finite;or limited set of values.;use in queuing.;Points Received: 2 of 2;Comments;Question 10. Question;: Expressing profits through the;relationship among unit price, fixed costs, and variable costs is an example;of;Student Answer: a sensitivity analysis model.;a quantitative analysis model.;a postoptimality relationship.;a parameter specification model.;none of the above.;Points Received: 2 of 2;Comments;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?;Student Answer: $500;$1000;$20;$750;$250;Points Received: 2 of 2;Comments;Question 12. Question;: 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 Laplace criterion?;Student Answer: Buy 1 machine;Buy 2 machines;Buy 3 machines;Points Received: 2 of 2;Comments;Question 13. Question;: Determining the average payoff;for each alternative and choosing the one with the best payoff is the approach;called;Student Answer: maximax;maximin;Laplace;minimax regret;expected monetary value;Points Received: 2 of 2;Comments;Question 14. Question;: Bob White is conducting;research on monthly expenses for medical care, including over-the-counter;medicine. His dependent variable is monthly expenses for medical care while his;independent variable is number of family members. Below is his Excel output.;Click here to view an Excel version of this output;Referring to the information above, based on his model, each;additional family member increases the predicted costs by how much?;Student Answer: $110.47;$16.83;$93.64;$127.30;Points Received: 2 of 2;Comments;Question 15. Question;: A controllable variable is;also called;Student Answer: a parameter.;a decision variable.;a mathematical model.;a measurable quantity.;none of the above.;Points Received: 2 of 2;Comments;Question 16. Question;: A seasonal index of;indicates that the season is average.;Student Answer: 10;100;0.5;0;1;Points Received: 2 of 2;Comments;Question 17. Question;: In the exponential smoothing;with trend adjustment forecasting method, missing something is the;Student Answer: slope of the trend line.;new forecast.;Y-axis intercept.;independent variable.;trend smoothing constant.;Points Received: 0 of 2;Comments;Question 18. Question;: Assume that you have 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.;Student Answer: True;False;Points Received: 2 of 2;Comments;Question 19. Question;: The condition of improper data;yielding misleading results is referred to as;Student Answer: garbage in, garbage out.;break-even point.;uncontrollable variable.;postoptimality.;none of the above.;Points Received: 2 of 2;Comments;Question 20. Question;: Bob White is conducting;research on monthly expenses for medical care, including over-the-counter;medicine. His dependent variable is monthly expenses for medical care while his;independent variable is number of family members. Below is his Excel output.;Click here to view an Excel version of this output;Referring to the information above, what percent of the;variation in medical expenses is explained by the size of the family?;Student Answer: 48.3%;49.6%;50.6%;51.3%;Points Received: 2 of 2;Comments;Question 21. Question;: 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 no personal computers? Hint: Let the probability of selling none equal;x.;Student Answer: 0.05;0.08;0.1;0.2;Points Received: 2 of 2;Comments;Question 22. Question;: A medium-term forecast is;considered to cover what length of time?;Student Answer: 2-4 weeks;1 month to 1 year;2-4 years;5-10 years;20 years;Points Received: 2 of 2;Comments;Question 23. Question;: If two events are mutually;exclusive, then;Student Answer: their probabilities can be added.;they may also be collectively exhaustive.;the joint probability is equal to 0.;if one occurs, the other cannot occur.;All of the above;Points Received: 2 of 2;Comments;Question 24. Question;: Arrivals at a fast-food;restaurant follow a Poisson distribution with a mean arrival rate of 16;customers per hour. What is the probability that in the next hour there will be;exactly 12 arrivals?;Student Answer: 0.0000;0.0661;0.7500;0.1322;None of the above;Points Received: 2 of 2;Comments;Question 25. Question;: The Department of Motor;Vehicles (DMV) can service customers at a rate of 20 per hour (or 1/3 per;minute) when it comes to license renewals. The service 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?;Student Answer: 0.5;0;1;0.368;0.632;Points Received: 2 of 2;Comments;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 have a seasonality index;of 1.15. What is the forecast for soccer ball demand for the month of April;(rounded to the nearest integer)?;Student Answer: 123;107;100;115;None of the above;Points Received: 2 of 2;Comments;Question 27. Question;: The best model is a;statistically significant model with a high r-square and few variables.;Student Answer: True;False;Points Received: 2 of 2;Comments;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?;Student Answer: 0.85;0.15;0.20;0.411;0.589;Points Received: 2 of 2;Comments;Question 29. Question;: A seasonal index of 1 means;that the season is average.;Student Answer: True;False;Points Received: 2 of 2;Comments;Question 30. Question;: Which of the following is true;regarding a regression model with multicollinearity, a high r2 value, and a low;F-test significance level?;Student Answer: The model is not a good prediction model.;The high value of r2 is due to the;multicollinearity.;The interpretation of the coefficients is;valuable.;The significance level tests for the;coefficients are not valid.;The significance level for the F-test is not;valid.;Points Received: 2 of 2;Comments;Question 31. Question;: Bob White is conducting;research on monthly expenses for medical care, including over-the-counter;medicine. His dependent variable is monthly expenses for medical care while his;independent variable is number of family members. Below is his Excel output.;Click here to view an Excel version of this output;Referring to the information above, the significance F-test;is this model a good prediction equation?;Student Answer: Yes;No;Points Received: 2 of 2;Comments;Question 32. Question;: The length of time that it;takes the tollbooth attendant to service each driver can typically be described;by the;Student Answer: normal distribution.;uniform distribution.;exponential distribution.;Poisson distribution.;None of the above;Points Received: 2 of 2;Comments;Question 33. Question;: Time-series models attempt to;predict the future by using historical data.;Student Answer: True;False;Points Received: 2 of 2;Comments;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 moving average where the weights are 3 and 1 are;Student Answer: 14.5;13.5;14;12.25;12.75;Points Received: 2 of 2;Comments;Question 35. Question;: 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.;Student Answer: 0.4;0.32;0.36;0.44;Points Received: 2 of 2;Comments;Question 36. Question;: Bob White is conducting research;on monthly expenses for medical care, including over-the-counter medicine. His;dependent variable is monthly expenses for medical care while his independent;variable is number of family members. Below is his Excel output.;Click here to view an Excel version of this output;Referring to the information above, what is the value of the;correlation coefficient?;Student Answer: 55.278;0.695;0.483;0.474;Points Received: 2 of 2;Comments;Question 37. Question;: Loss of goodwill must be;included in stockout costs.;Student Answer: True;False;Points Received: 2 of 2;Comments;Question 38. Question;: The probability, P, of any;event or state of nature occurring is greater than or equal to 0 and less than;or equal to 1.;Student Answer: True;False;Points Received: 2 of 2;Comments;Question 39. Question;: As one increases the number of;periods used in the calculation of a moving average;Student Answer: 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.;Points Received: 2 of 2;Comments;Question 40. Question;: Which of the following methods;tells whether the forecast tends to be too high or too low?;Student Answer: MAD;MSE;MAPE;Decomposition;Bias;Points Received: 2 of 2;Comments;Question 41. Question;: A moving average forecasting;method is a causal forecasting method.;Student Answer: True;False;Points Received: 2 of 2;Comments;Question 42. Question;: One purpose of regression is;to understand the relationship between variables.;Student Answer: True;False;Points Received: 2 of 2;Comments;Question 43. Question;: When demand is constant, the;Reorder point (ROP) is a function of demand and lead time.;Student Answer: True;False;Points Received: 2 of 2;Comments;Question 44. Question;: Which of the following is not;classified as a qualitative forecasting model?;Student Answer: Exponential smoothing;Delphi method;Jury of executive opinion;Sales force composite;Consumer market survey;Points Received: 2 of 2;Comments;Question 45. Question;: Consider the following gasoline;data;Click here to view an Excel version of this table.;Referring to the information above, what is the seasonal;index for fourth quarter?;Student Answer: 1.017;1.175;.977;.899;Points Received: 2 of 2;Comments;Question 46. Question;: The classical method of;determining probability is;Student Answer: subjective probability.;marginal probability.;objective probability.;joint probability.;conditional probability.;Points Received: 2 of 2;Comments;Question 47. Question;: A consulting firm has received;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, five consultants and four partners in the firm.;Which of the following statements is false?;Student Answer: 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 given 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 given that a secretary won a ticket on the first draw is;4/14.;Points Received: 2 of 2;Comments;Question 48. Question;: The EMV that a person is;willing to give up in order to avoid the risk associated with a gamble is;referred to as the;Student Answer: risk premium.;certainty equivalent.;EVPI.;EVwPI.;EVSI.;Points Received: 2 of 2;Comments;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).;Student Answer: 118.96;121.17;130;120;None of the above;Points Received: 2 of 2;Comments;Question 50. Question;: 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?;Student Answer: 0.027;0.210;0.300;0.700;Points Received: 2 of 2;Comments;* Times are displayed;in (GMT-05:00) Eastern Time (US & Canada)

 

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