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##### Saint GBA334 midterm exam

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Question;1.;The following is a payoff table giving profits for various situations.;State;Of;Nature;Alternatives;A;B;C;Alternative 1;100;120;180;Alternative 2;120;140;120;Alternative 3;200;100;50;Do Nothing;0;0;0;The probabilities for states of;nature A, B, and C are 0.3, 0.5, and 0.2, respectively. What decision;should be made based on the minimax regret criterion?;(Points: 2.5);Alternative 1Alternative 2Alternative 3Do NothingNone of the above;Question 2.;2.;Hampton sells handcrafted yard decorations at county fairs.;The variable cost to make these is $20 each, and he sells them for $50.;The cost to rent a booth at teh afir is $150. How many of these must;Hampton sell to break even?;(Points: 2.5);50201505None of the above;Question 3.;3.;The following is a payoff table giving profits for various situations.;State;Of;Nature;Alternatives;A;B;C;Alternative 1;100;120;180;Alternative 2;120;140;120;Alternative 3;200;100;50;Do Nothing;0;0;0;The probabilities for states of;nature A, B, and C are 0.3, 0.5, and 0.2, respectively. What decision;should be made based on the equally likely criterion?;(Points: 2.5);Alternative 1Alternative 2Alternative 3Do NothingNone of the above;Question 4.;4.;The classical method of determining probability is;(Points: 2.5);subjective probability.marginal probability.objective probability.joint probability.conditional probability.;Question 5.;5.;Enrollment in a;particular class for the last four semesters has been 120, 126, 110, and;130 (listed from oldest to most recent). Develop a forecast of;enrollment 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).;(Points: 2.5);118.96121.17130120None of the above;Question 6.;6.;The dependent variable is also called the response variable.;(Points: 2.5);True False;Question 7.;7.;The correlation;coefficient resulting from a particular regression analysis was 0.58.;What was the coefficient of determination?;(Points: 2.5);0.3364-0.33640.7616-0.7616There is insufficient information to answer the question.;Question 8.;8.;What is the formula for the break-even point of a simple profit model?;(Points: 2.5);Fixed Cost / Variable Cost Per Unit(Selling Price Per Unit ?Variable Cost Per Unit) / Fixed CostFixed 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);Question 9.;9.;The costs involved in a typical inventory model are order costs, management costs, and holding costs.;(Points: 2.5);True False;Question 10.;10.;Mean absolute deviation (MAD) is simply the sum of forecast errors.;(Points: 2.5);True False;Question 11.;11.;A medium-term forecast is considered to cover what length of time?;(Points: 2.5);2-4 weeks1 month to 1 year2-4 years5-10 years20 years;Question 12.;12.;A store of Pizza Hut;provides the following data on the quantity of pizzas sold during the;month of January through July 2014, the price of a large pizza, and the;advertising expenses.;Quantity Sold;Price;Advertising Expenses;8500;$10;$3,000;4800;14;1000;6500;12;1500;7800;11;2000;6000;13;1500;8000;10;2500;7000;11;1800;The regression output is as follow;SUMMARY OUTPUT;Regression Statistics;Multiple R;0.98154;R Square;0.96342;Adjusted R Square;0.94513;Standard Error;301.7577;Observations;7;ANOVA;df;SS;MS;F;Significance F;Regression;2;9592912;4796456;52.67491;0.001338;Residual;4;364230.8;91057.69;Total;6;9957143;Coefficients;Standard Error;t Stat;P-value;Lower 95%;Upper 95%;Intercept;12460.58;3181.967;3.915998;0.017306;3626.02;21295.13;Price;-577.885;204.148;-2.83071;0.047311;-1144.69;-11.0789;Advertising Expenses;0.615385;0.458403;1.342454;0.250575;-0.65735;1.888115;Which of the following is correct about the relationship between quantity sold and the price of pizza?;(Points: 2.5);There;is a positive relationhsip between quantity sold and price of pizza and;the relationship is statistically significant at 1%.There;is a negative relationship between the quantity sold and the price of;pizza and the relationship is statistically significant at 5%.There;is a negative relationship between quantity sold and the price of pizza;but the relationship is not statistically significant.There is insufficient information to answer the question.None of the above.;Question 13.;13.;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 moving average.;(Points: 2.5);1413152812.5;Question 14.;14.;A model is a representation of a situation.;(Points: 2.5);True False;Question 15.;15.;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 3 customers;would be willing to switch their cable?;(Points: 2.5);0.850.150.200.4110.589;Question 16.;16.;Purchasing department supplies comprise one of the "carrying cost factors.;(Points: 2.5);True False;Question 17.;17.;The jury of;executive opinion forecasting model uses the opinions of a small group;of high-level managers, often in combination with statistical models;and results in a group estimate of demand.;(Points: 2.5);True False;Question 18.;18.;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)?;(Points: 2.5);123107100115None of the above;Question 19.;19.;The economic order quantity helps one estimate the optimal number of units to purchase with each order.;(Points: 2.5);True False;Question 20.;20.;Inventory;(Points: 2.5);is any stored resource used to satisfy current or future need.includes raw materials, work-in-process, and finished goods.levels for finished goods are a direct function of demand.needs from raw materials through finished goods can be reasonably determined, once finished goods demand is determined.All of the above;Question 21.;21.;Given two statistically independent events (A,B), the joint probability of P(AB) = P(A) + P(B).;(Points: 2.5);True False;Question 22.;22.;The use of "expert opinion" is one way to approximate subjective probability values.;(Points: 2.5);True False;Question 23.;23.;A store of Pizza Hut;provides the following data on the quantity of pizzas sold during the;month of January through July 2014, the price of a large pizza, and the;advertising expenses.;Quantity Sold;Price;Advertising Expenses;8500;$10;$3,000;4800;14;1000;6500;12;1500;7800;11;2000;6000;13;1500;8000;10;2500;7000;11;1800;The regression output is as follow;SUMMARY OUTPUT;Regression Statistics;Multiple R;0.98154;R Square;0.96342;Adjusted R Square;0.94513;Standard Error;301.7577;Observations;7;ANOVA;df;SS;MS;F;Significance F;Regression;2;9592912;4796456;52.67491;0.001338;Residual;4;364230.8;91057.69;Total;6;9957143;Coefficients;Standard Error;t Stat;P-value;Lower 95%;Upper 95%;Intercept;12460.58;3181.967;3.915998;0.017306;3626.02;21295.13;Price;-577.885;204.148;-2.83071;0.047311;-1144.69;-11.0789;Advertising Expenses;0.615385;0.458403;1.342454;0.250575;-0.65735;1.888115;What is the coefficient of determination?;(Points: 2.5);0.981540.963420.945130.615385None of the above;Question 24.;24.;The following is a payoff table giving profits for various situations.;State;Of;Nature;Alternatives;A;B;C;Alternative 1;100;120;180;Alternative 2;120;140;120;Alternative 3;200;100;50;Do Nothing;0;0;0;The probabilities for states of nature A, B, and C are 0.3, 0.5, and 0.2, respectively. What decision would a pessimist make?;(Points: 2.5);Alternative 1Alternative 2Alternative 3Do NothingNone of the above;Question 25.;25.;Mark Achin sells 3,600;electric motors each year. The cost of these is $200 each, and demand;is constant throughout the year. The cost of placing an order is $40;while the holding cost is $20 per unit per year. There are 360 working;days per year and the lead-time is 5 days. If Mark orders 200 units;each time he places an order, what would his total ordering cost be for;the year?;(Points: 2.5);$2,000$2,720$200$720None of the above;Question 26.;26.;The objective of a(n) ________ system is to reduce costs by integrating all of the operations of a firm.;(Points: 2.5);MRPERPJITVMIEOQ;Question 27.;27.;The following is a payoff table giving profits for various situations.;State;Of;Nature;Alternatives;A;B;C;Alternative 1;100;120;180;Alternative 2;120;140;120;Alternative 3;200;100;50;Do Nothing;0;0;0;The probabilities for states of nature A, B, and C are 0.3, 0.5, and 0.2, respectively. What decision would an optimist make?;(Points: 2.5);Alternative 1Alternative 2Alternative 3Do NothingState of Nature A;Question 28.;28.;The annual demand for a;product is 1,000 units. The company orders 200 units each time an order;is placed. The lead-time is 6 days, and the company has determined that;20 units should be held as a safety stock. There are 250 working days;per year. What is the reorder point?;(Points: 2.5);202444120None of the above;Question 29.;29.;The coefficient of;determination resulting from a particular regression analysis was;0.7921. What was the correlation coefficient, assuming a positive;linear relationship?;(Points: 2.5);0.6274-0.62740.89-0.89There is insufficient information to answer the question.;Question 30.;30.;The probability of event B, given that event A has occurred" is known as a ________ probability.;(Points: 2.5);continuousmarginalsimplejointconditional;Question 31.;31.;In making inventory decisions, the purpose of the basic EOQ model is to;(Points: 2.5);minimize carrying costs.minimize ordering costs.minimize the sum of carrying costs and ordering costs.minimize customer dissatisfaction.minimize stock on hand.;Question 32.;32.;A store of Pizza Hut;provides the following data on the quantity of pizzas sold during the;month of January through July 2014, the price of a large pizza, and the;advertising expenses.;Quantity Sold;Price;Advertising Expenses;8500;$10;$3,000;4800;14;1000;6500;12;1500;7800;11;2000;6000;13;1500;8000;10;2500;7000;11;1800;The regression output is as follow;SUMMARY OUTPUT;Regression Statistics;Multiple R;0.98154;R Square;0.96342;Adjusted R Square;0.94513;Standard Error;301.7577;Observations;7;ANOVA;df;SS;MS;F;Significance F;Regression;2;9592912;4796456;52.67491;0.001338;Residual;4;364230.8;91057.69;Total;6;9957143;Coefficients;Standard Error;t Stat;P-value;Lower 95%;Upper 95%;Intercept;12460.58;3181.967;3.915998;0.017306;3626.02;21295.13;Price;-577.885;204.148;-2.83071;0.047311;-1144.69;-11.0789;Advertising Expenses;0.615385;0.458403;1.342454;0.250575;-0.65735;1.888115;What is the correlation coefficient?;(Points: 2.5);0.963420.6153850.981540.94513None of the above;Question 33.;33.;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;(Points: 2.5);14.5.13.5.14.12.25.12.75.;Question 34.;34.;A store of Pizza Hut;provides the following data on the quantity of pizzas sold during the;month of January through July 2014, the price of a large pizza, and the;advertising expenses.;Quantity Sold;Price;Advertising Expenses;8500;$10;$3,000;4800;14;1000;6500;12;1500;7800;11;2000;6000;13;1500;8000;10;2500;7000;11;1800;The regression output is as follow;SUMMARY OUTPUT;Regression Statistics;Multiple R;0.98154;R Square;0.96342;Adjusted R Square;0.94513;Standard Error;301.7577;Observations;7;ANOVA;df;SS;MS;F;Significance F;Regression;2;9592912;4796456;52.67491;0.001338;Residual;4;364230.8;91057.69;Total;6;9957143;Coefficients;Standard Error;t Stat;P-value;Lower 95%;Upper 95%;Intercept;12460.58;3181.967;3.915998;0.017306;3626.02;21295.13;Price;-577.885;204.148;-2.83071;0.047311;-1144.69;-11.0789;Advertising Expenses;0.615385;0.458403;1.342454;0.250575;-0.65735;1.888115;Which of the two independent variables, Price and advertising expenses, is a good predictor of quantity sold?;(Points: 2.5);Price onlyAdvertising Expenses onlyBoth Price and Advertising ExpensesNeitherNone of the above;Question 35.;35.;A store of Pizza Hut;provides the following data on the quantity of pizzas sold during the;month of January through July 2014, the price of a large pizza, and the;advertising expenses.;Quantity Sold;Price;Advertising Expenses;8500;$10;$3,000;4800;14;1000;6500;12;1500;7800;11;2000;6000;13;1500;8000;10;2500;7000;11;1800;The regression output is as follow;SUMMARY OUTPUT;Regression Statistics;Multiple R;0.98154;R Square;0.96342;Adjusted R Square;0.94513;Standard Error;301.7577;Observations;7;ANOVA;df;SS;MS;F;Significance F;Regression;2;9592912;4796456;52.67491;0.001338;Residual;4;364230.8;91057.69;Total;6;9957143;Coefficients;Standard Error;t Stat;P-value;Lower 95%;Upper 95%;Intercept;12460.58;3181.967;3.915998;0.017306;3626.02;21295.13;Price;-577.885;204.148;-2.83071;0.047311;-1144.69;-11.0789;Advertising Expenses;0.615385;0.458403;1.342454;0.250575;-0.65735;1.888115;Which of the following is correct about the regression model?;(Points: 2.5);The model is not a good prediction model.The low significance level of F suggests that the model is not good.Since significance F is less than 1%, it can be concluded that the model is good prediction model.The model is not good because the coefficient of determination is near 0.None of the above;Question 36.;36.;Theft is one of the "ordering cost factors.;(Points: 2.5);True False;Question 37.;37.;To determine the effect of input changes on decision results, we should perform a sensitivity analysis.;(Points: 2.5);True False;Question 38.;38.;If computing a causal linear regression model of Y = a + bX and the resultant r2 is very near zero, then one would be able to conclude that;(Points: 2.5);Y = a + bX is a good forecasting method.Y = a + bX is not a good forecasting method.a multiple linear regression model is a good forecasting method for the data.a multiple linear regression model is not a good forecasting method for the data.None of the above;Question 39.;39.;Which of the following statements (are) is not true about regression models?;(Points: 2.5);Estimates of the slope are found from sample data.The regression line minimizes the sum of the squared errors.The error is found by subtracting the actual data value from the predicted data value.The dependent variable is the explanatory variable.Statements C and D are not correct;Question 40.;40.;Which of the following factors is (are) not included in ordering cost?;(Points: 2.5);bill payingobsolescencepurchasing department overhead costsinspecting incoming inventorydeveloping and sending purchase orders;Question 41.;41.;When using the EOL as a decision criterion, the best decision is the alternative with the largest EOL value.;(Points: 2.5);True False;Question 42.;42.;The concept of inventory is applicable to both manufacturing and service organizations.;(Points: 2.5);True False;Question 43.;43.;The annual demand for a;product has been projected at 2,000 units. This demand is assumed to be;constant throughout the year. The ordering cost is $20 per order, and;the holding cost is 20 percent of the purchase cost. Currently, the;purchase cost is $40 per unit. There are 250 working days per year.;Whenever an order is placed, it is known that the entire order will;arrive on a truck in 6 days. Currently, the company is ordering 500;units each time an order is placed. What is the total holding cost for;the year using this policy?;(Points: 2.5);$400$2,000$4,000$8,000None of the above;Question 44.;44.;One problem in using a quantitative model is that the necessary data may be unavailable.;(Points: 2.5);True False

Paper#60446 | Written in 18-Jul-2015

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