Test Bank for Introduction to Business Analytics 1st Edition Vernon J. Richardson Marcia Weiden

Test Bank for Introduction to Business Analytics 1st Edition Vernon J. Richardson Marcia Weiden Chapter 1-11 Answers are at the End of Each Chapter Chapter 1 Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.

1) A business process is a coordinated, standardized set of activities conducted by both people and equipment to accomplish a specific business task. ⊚ true ⊚ false 2) A business analyst is a data scientist who collects data to help an organization make

effective business decisions. ⊚ true ⊚ false 3) Data is defined as information organized in a meaningful way to be useful to the user. ⊚ true ⊚ false 4) Information is defined as being data organized in a meaningful way to be useful to the user in

a given context. ⊚ true ⊚ false 5) A data scientist is a liaison between decision makers and business analysts. ⊚ true ⊚ false 6) Operations analytics uses business analytics to measure and improve the efficiency and

effectiveness of the company’s operations. ⊚ true ⊚ false

7) The third step in the SOAR analytics model is to Access the data. ⊚ true ⊚ false 8) Exploratory data visualization is used to communicate results of the analysis to decision

makers and other stakeholders. ⊚ true ⊚ false CHECK ALL THE APPLY. Choose all options that best completes the statement or answers the question.

9) A visualization may be used to help with which component of the SOAR model?

A) Specify the Question B) Obtain the Data C) Analyze the Data D) Report the Results MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

10) The difficulty a person faces in understanding a problem and making a decision as a consequence of having too much data.

A) Data Complexity B) Data Overload C) Analytics Mindset D) Data Challenges 11) Which step of the SOAR model would usually involve computing an average?

A) Specify the Question B) Obtain the Data C) Analyze the Data D) Report the Results 12) Which step of the SOAR model most appropriately addresses the skill mentioned by EY’s

analytics mindset of “extract, transform and load relevant data”?

A) Specify the Question B) Obtain the Data C) Analyze the Data D) Report the Results

13) Use of a dashboard to track relevant outcomes would be consistent with which component of

the SOAR model?

A) Specify the Question B) Obtain the Data C) Analyze the Data D) Report the Results 14) What type of question(s) works to explain “Why did net income increase even though sales

did not?”

A) What happened? What is happening?

B) Why did it happen? What are the root causes of past results?

C) Will it happen in the future? What is the probability something will happen? Is it forecastable?

D) What should we do based on what we expect will happen? How do we optimize our performance based on potential constraints?

15) What type of question is used in finding the level of sales needed to break even (exactly zero

profit)?

A) What happened? What is happening?

B) Why did it happen? What are the root causes of past results?

C) Will it happen in the future? What is the probability something will happen? Is it

forecastable?

D) What should we do based on what we expect will happen? How do we optimize our performance based on potential constraints?

16) What type of question is “How long will it take for Christmas products to arrive at our stores

if we source the products from Mexico rather than Indonesia?”

A) What happened? What is happening?

B) Why did it happen? What are the root causes of past results?

C) Will it happen in the future? What is the probability something will happen? Is it forecastable?

D) What should we do based on what we expect will happen? How do we optimize our performance based on potential constraints?

17) What type of question is “Should we source our products from Mexico rather than

Indonesia?”

A) What happened? What is happening?

B) Why did it happen? What are the root causes of past results?

C) Will it happen in the future? What is the probability something will happen? Is it forecastable?

D) What should we do based on what we expect will happen? How do we optimize our performance based on potential constraints?

18) What type of question is predicting whether borrowers will be able to repay their loans?

A) What happened? What is happening?

B) Why did it happen? What are the root causes of past results?

C) Will it happen in the future? What is the probability something will happen? Is it

forecastable?

D) What should we do based on what we expect will happen? How do we optimize our performance based on potential constraints?

19) What type of question is used in determining how to maximize revenues if there is a trade

war with another country?

A) What happened? What is happening?

B) Why did it happen? What are the root causes of past results?

C) Will it happen in the future? What is the probability something will happen? Is it forecastable?

D) What should we do based on what we expect will happen? How do we optimize our performance based on potential constraints?

20) What term is used to refer to the accuracy, validity and consistency of data used and stored

over time?

A) Data veracity B) Data integrity C) Data quality D) Truthful data 21) Dashboards showing current company performance are usually associated with what type of

updating?

A) Dynamic B) Static C) Opportunist D) Monthly

22) How much data is there expected to be in existence by the end of 2025?

A) 175 terabytes B) 175 zettabytes C) 175 exabytes D) 175 yottabytes 23) Which type of graphical summary is used by a company to track various measures?

A) Trackboard B) Graphical interface C) Dashboard D) Web page 24) Which type of analyst addresses questions regarding sales forecasts for each product?

A) Operations analyst B) Marketing analyst C) Accounting analyst D) Financial analyst 25) Which type of analyst would help plan the production of each product?

A) Financial analyst B) Operations analyst C) Accounting analyst D) Marketing analyst 26) Which of the following is the third step of the SOAR analytics model?

A) Access the Data B) Acquire the Data C) Analyze the Data D) Address the Question 27) What term refers to all the items, events and interactions that determine a company’s

financial health?

A) Net Income B) Business Value C) Stock Price D) Market Value

28) What term refers to the willingness and ability to specify business questions, extract high

quality data, analyze the data and report the results?

A) Analytics mindset B) Analytics skills C) Statistical skills D) Business mindset 29) Which common visualization type would be used to compare values?

A) Pie chart B) Bar chart C) Line Graph D) Scatterplot 30) The best visualization type to show the relative proportion of Tesla’s domestic sales to China,

to Europe and to the United States would be which of the following?

A) Bar chart B) Pie chart C) Line Graph D) Scatterplot 31) The best visualization type to show the trend in sales over the past five years at Apple would

be which of the following?

A) Bar chart B) Line Graph C) Histogram D) Scatterplot 32) Which common visualization type would be used to evaluate the composition of values?

A) Pie chart B) Bar chart C) Line Graph D) Scatterplot 33) A line graph would be used for which visualization purpose?

A) Comparison of values B) Distribution of values C) Trends of values over time D) Relationships between values

34) A scatterplot would be used for which visualization purpose?

A) Comparison of values B) Distribution of values C) Relationships between values D) Composition of values 35) A full year’s worth of Instagram posts and Twitter tweets before filtering or extraction would

be considered to be which of the following?

A) Evidence B) Knowledge C) Information D) Data 36) Which type of value chain is composed of the events and processes going all the way from

the collection of data to the compilation of information to the ultimate business decision?

A) Data value chain B) Knowledge value chain C) Decision value chain D) Information value chain 37) A specialist who knows how to work with, manipulate, and statistically test data is a: A) data scientist.

B) data analyst.

C) data acquirer.

D) decision maker.

38) Data ethics should be considered as part of which step of the SOAR model?

A) Specify the Question B) Analyze the Data C) Obtain the Data D) Report the Results 39) Which analytics type explicitly uses artificial intelligence?

A) Descriptive analytics B) Diagnostic analytics C) Adaptive or autonomous analytics D) Predictive analytics

40) Which type of visualization is a graphical representation that is useful for uncovering

patterns and useful insights in the data, generally as part of descriptive or diagnostic analytics?

A) Explanatory B) Descriptive C) Predictive D) Exploratory 41) Which type of visualization is used in communicating the findings of the analysis to

interested stakeholders?

A) Exploratory B) Diagnostic C) Prescriptive D) Explanatory 42) Which type of analyst would monitor the investments made in company assets and their

expected risk and return?

A) Operations analyst B) Financial analyst C) Accounting analyst D) Marketing analyst 43) Suppose a company has access to high quality data (not biased), but the data is five years old.

Which quality of information might it be lacking?

A) Reliability B) Relevance C) Clean data (not missing data) D) Verifiable data

44) Based on the final spreadsheet in Lab 1.1 Excel, Assessing Profitability of a Mowing

Business, what is the reason for the difference between Scenario 1 and Scenario 2?

A) B) C) D)

The number of lawns serviced each month The fixed costs of the mowers The cost of labor for each lawn mowed The amount charged (the revenue earned) for each lawn mowed

45) Based on the scatterplot in Lab 1.1 Excel, Assessing Profitability of a Mowing Business, if

the labor cost per lawn is $25, what is the expected monthly profit margin?

A) B) C) D)

$3,000 $5,300 $3,400 $4,500

46) Based on this pivot table in Lab 1.2 Excel, Assessing Customer Profitability, which

customer number is the most profitable?

A) B) C) D)

Customer 2087 Customer 2068 Customer 2047 Customer 2088

47) Based on this visualization in Lab 1.2 Tableau, Assessing Customer Profitability, which

of the following customers are the most profitable?

A) B) C) D)

Customer 2072 Customer 2081 Customer 2079 Customer 2074

48) Based on this chart in Lab 1.2 Power BI, Assessing Customer Profitability, which of the

following customers are the most profitable?

A) B) C) D)

Customer 2081 Customer 2100 Customer 2046 Customer 2006

49) Based on this pivot table in Lab 1.3 Excel, Assessing Product (SKU) Profitability, which

product number is the most profitable per dollar of sales?

A) B) C) D)

FRT-GRI FRT-AVD FRT-PIL FRT-JAU

50) Based on the histogram in Lab 1.3 Tableau, Assessing Product (SKU) Profitability, how

many products are in the lowest bin?

A) B) C) D)

13 21 24 23

51) Based on the visualization in Lab 1.3 Power BI, Assessing Product (SKU) Profitability,

what is the gross margin percentage of FRT-DAT in the lowest bin?

A) B) C) D)

0.34 0.35 0.36 0.37

ESSAY. Write your answer in the space provided or on a separate sheet of paper.

52) Why are business analysts needed, and what do they do?

53) What is the trade-off between reliable data (that reports the truth with minimal errors) and

relevant data (that most closely addresses the question at hand)? When would you choose one over the other?

54) Walk through the steps of the SOAR model to address the question of predicting the needed

level of production of iPhone sales for its next major model. What is an example of each step of the SOAR model?

55) Should a company be concerned with whether the data it uses to answer its questions violates

customer privacy?

56) Explain the difference between exploratory data visualizations and explanatory data

visualizations. When would each be used?

57) What does it mean that the SOAR analytics model is recursive? Why is that?

Answer Key Test name: chapter 1 1) TRUE 2) FALSE 3) FALSE 4) TRUE 5) FALSE 6) TRUE 7) FALSE 8) FALSE 9) [C, D] 10) B 11) C 12) B 13) D 14) B 15) D 16) D 17) D 18) C 19) D 20) B 21) A 22) B 23) C 24) B 25) B 26) C 27) B 28) A 29) B 30) B 31) B 32) A 33) C 34) C 35) D 36) D 37) A

38) C 39) C 40) D 41) D 42) B 43) B 44) C 45) A 46) C 47) A 48) A 49) D 50) A 51) B 52) Essay

In an increasingly data-centric society, business analysts are needed to help answer management questions using insights gained from data. Specifically, business analysts use data to help managers answer questions about value creation and other business functions.

53) Essay

There is no standard answer about the exact threshold of tradeoff between relevant and reliable data. Data might be extremely relevant to a decision at hand, but if it is filled with errors, missing data, and opinions (instead of facts) will likely not be of value at all. At the same time, reliable data can be gathered that is factual and without bias, but if it has little or no bearing on the decision at hand, will not be of use to the decision maker. A combination of both reliability and relevance is what is needed for most business analytics.

54) Essay

Specify the question.What is the appropriate level of iPhones sales for its next major model?

Obtain the data.

What was the demand for the last iPhone model?

What was the demand for smartphone sales industry-wide and for its nearest competitor (e.g. Samsung)?

How well is the economy performing overall?

Use data-driven forecasting to predict iPhone sales at the Tulsa, Oklahoma dealership.

Use data visualizations (including graphs and trend charts) to summarize past sales and evaluate sales trends.

Determine whether a written report, a visualization (such as a chart or graph), or some combination of text and visuals is the best way to communicate the findings.

Report the results of the best-case scenario, the worst-case scenario, and the most likely case scenario.

55) Essay

Yes, when considering what data should be used as part of “Obtain the data”, companies must consider if the data been obtained ethically, and if the data protects people’s privacy?

56) Essay

While exploratory data visualizations can reveal patterns in the data leading to greater insight, explanatory data visualizations are very useful for communicating the findings of the business analysis to stakeholders. Exploratory data visualizations are typically used in the “Analyze the data” of the SOAR model, with explanatory data visualizations typically used in the “Report the Results” step of the SOAR model.

57) Essay

The SOAR analytics model is recursive or cyclical because the answer to one question leads to more questions, which lead to more answers and new questions. The recurring nature of the SOAR model allows the business team to narrow its questions and improve the quality of the answers.

Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.

58) Financial statements would generally be considered unstructured data. ⊚ true ⊚ false 59) Social media would generally be considered unstructured data. ⊚ true ⊚ false 60) There is more social media data than financial statement data available. ⊚ true ⊚ false 61) Estimates suggest that approximately 80 percent of enterprise data is structured. ⊚ true ⊚ false 62) Data with greater veracity is often more impactful, carrying more weight in analysis than

data with lesser veracity in addressing business questions. ⊚ true ⊚ false 63) According to the SOAR model, the analyst should know the question they are trying to

address before considering and accessing available data. ⊚ true ⊚ false 64) Nominal data is numerical data that cannot be ranked. ⊚ true ⊚ false 65) The dollar amounts included in the financial statements would be examples of ratio data. ⊚ true ⊚ false 66) Ordinal data ranks or orders numerical data. ⊚ true ⊚ false

67) Ratio data has an absolute zero. ⊚ true ⊚ false 68) As compared to raw data, aggregated data gives the analyst the greatest ability to select the

most relevant data. ⊚ true ⊚ false 69) The most appropriate data type for the customer rating for an Amazon product would be a

number. ⊚ true ⊚ false 70) The transformation step is necessary when your data isn’t formatted in the manner it needs to

be for analysis. ⊚ true ⊚ false 71) Tableau’s biggest advantage over Excel is its specific emphasis on data visualization. ⊚ true ⊚ false 72) It is possible to input raw data within Tableau. ⊚ true ⊚ false 73) Primary keys are required in every relational database table. ⊚ true ⊚ false 74) Foreign keys are required in every relational database table. ⊚ true ⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

75) Whereas Instagram pictures would generally be considered unstructured data, which of the following would generally be considered to be structured data?

A) Product reviews B) Twitter feed C) Financial statements D) Geographic images 76) Highlighting the difference between the data which comes from blogs and pictures as

compared to financial data would be examples of which aspect of Big Data?

A) Volume B) Veracity C) Velocity D) Variety 77) In the United Kingdom (UK), financial statements for publicly traded firms are issued twice

annually. In the United States (US), financial statements for publicly traded firms are issued quarterly. The difference in timing would address which aspect of Big Data?

A) Volume B) Veracity C) Velocity D) Variety 78) If a dataset has a lot of missing data would most directly concern which aspect of Big Data?

A) Volume B) Veracity C) Velocity D) Variety 79) The Four V’s associated with big data include all except which of the following?

A) Volume B) Veracity C) Velocity D) Variability

80) EDGAR, the SEC repository of SEC forms, stands for: A) Electronic Data Gathering, Analysis Repository system.

B) Electronic Data Gathering and Archive Retrieval system.

C) Electronic Data Gathering, Analysis and Retrieval system.

D) Electronic Data Gathering, Analysis Resource system.

81) Tyson Chicken monitors the standard cost of a pound of chicken on a continuous basis,

incorporating the latest data into their costing. The frequency of updating the costs would address which aspect of Big Data?

A) Volume B) Veracity C) Velocity D) Variety 82) Data without internal organization or structure that has tags explaining what the data

represents is called: A) semi-structured data.

B) structured data.

C) unstructured data.

D) big data.

83) Veracity evaluates whether the data is accurate (and clean), worthy of trust and: A) truthful.

B) relevant.

C) reliable.

D) timely.

84) Of the data items listed below, which has the highest velocity?

A) Financial statements B) Stock prices C) Worker productivity measures D) Daily weather updates 85) According to Eric Schmidt, CEO of Google says, How many days does it take to create as

much information as we did from the dawn of civilization up until 2003?

A) Two B) Three C) Six D) Nine

86) What does ETL stand for?

A) Extract, Transform, and Load B) Extract, Translate, and Load C) Extract, Translate, and Link D) Examine, Translate, and Load 87) Which of the following describes a column (or group of columns) that exists to create

relationships between two tables, linking to the primary key in another table?

A) Primary key B) Foreign link C) Foreign key D) Primary link 88) Which of the following describes a column in a relational table/database that serves as a

unique identifier?

A) Primary key B) Foreign identifier C) Foreign key D) Primary identifier 89) While Excel defaults to showing the data in a tabular format, Tableau defaults to showing the

data in which of the following formats?

A) Statistical format B) Database format C) Visual format D) Analytical format 90) The typical order for getting data ready for analysis is as follows: A) transform the data to make data usable, extract the data, and load the data in the

analysis tool.

B) load the data in the analysis tool, extract the data, and transform the data to make data usable.

C) extract the data, load the data in the analysis tool, and transform the data to make the data usable.

D) extract the data, transform the data to make data usable, and load the data in the analysis tool.

91) When accessing data, which of the following applications requires that you connect to a(n)

external data source?

A) Excel B) Tableau C) Access D) Query 92) Examples of personally identifiable information includes all but which of the following?

A) Birthdate B) Social security number C) Job title D) Credit card information 93) Which of the following is considered personally identifiable information?

A) Job title B) Business phone number C) Personal phone number D) Workplace 94) Which data type would financial statement data generally be considered to be?

A) Structured data B) Interval data C) Unstructured data D) Ratio data 95) Which data type would noting first, second, and third place awards be considered to be?

A) Ratio B) Ordinal C) Nominal D) Interval 96) Which data type would Sales figures be considered to be?

A) Interval B) Ratio C) Ordinal D) Nominal

97) Which data type would Facebook, Twitter and Instagram post data generally be considered

to be?

A) B) C) D)

Structured data Unstructured data Numerical data Ordinal data

98) If there are 60 return transactions and 150 sales transactions in a month, what is the

proportion of return transactions to all monthly transactions?

A) 60/210 B) 60/150 C) 210/60 D) 150/60 99) If there are 6 transactions on 11/1, 3 transactions on 11/2 and 10 transactions on 11/3, what

is the proportion of the 11/1 transactions to the total transactions that occur during the first three days of November?

A) 19/6 B) 6/13 C) 6/19 D) 6/6 100)

Which data type would Transaction_ID be considered to be?

A) Ratio data B) Categorical data C) Interval data D) Numerical data

101)

Ranking is a summarization method for which type of data?

A) Nominal B) Ordinal C) Ratio D) Both categorical and numerical

102)

What is the term for data about the data?

A) A data dictionary B) A data map C) A data atlas D) A data summary

103)

There are four primary methods to summarize numerical data; three are counting and grouping, proportion, and summing. What is the fourth method?

A) Ranking B) Plotting C) Averaging D) Charting

104)

There are three primary methods to summarize ordinal data; two are counting and grouping and proportion. What is the third method?

A) Ranking B) Plotting C) Averaging D) Charting

105)

There are two primary methods to summarize nominal data; one is counting and grouping. What is the second method?

A) Ranking B) Charting C) Averaging D) Proportion

106)

Which numerical data type has an absolute zero?

A) Interval B) Ratio C) Nominal D) Ordinal

107)

Which data type has a meaningful distance between data points?

A) Interval B) Categorical C) Nominal D) Ordinal

108)

Which type of data would letter grades (A, B, C, D, or F) be considered to be?

A) Numerical B) Ordinal C) Ratio D) Interval

109)

Which of the following would be considered an example of structured data?

A) Blogs B) Pictures C) Social media D) Product reviews

110)

Which of the following would be considered an example of unstructured data?

A) Names and addresses B) Pictures C) Financial statements D) Excel spreadsheets

111)

Which type of data would purchase and returns be considered to be?

A) Ratio B) Ordinal C) Nominal D) Interval

112)

Which of the following would be considered the most appropriate data type for whether or not a product is eligible for Amazon prime shipping?

A) Y/N Flag B) Short text C) Number D) Currency

113)

114)

In a table of a relational database, which of the following terms describes the rows?

A) Fields B) Variables C) Records D) Transactions

All of the information regarding one patient (name, address, patient information, etc.) would be held in which of the following?

A) Field B) Record C) Attribute D) Aspect

115)

Which of the following would be a calculated variable from other data?

A) Product availability B) Coupon availability C) Product sales price D) Average customer rating

116)

Which of the following would not be a calculated variable from other data?

A) Number of products available B) Coupon availability C) Ranking of sales of one product compared to other products D) Average customer rating

117)

What type of data would measuring transaction amounts for revenues and expenses be considered to be?

A) Nominal data B) Numerical data C) Categorical data D) Ordinal data Data with an equal and definitive interval between each data point and absolute “zero” in the point of origin measuring transactions amounts for revenues and expenses would be considered which type of data?

A) Ratio data B) Nominal data C) Interval data D) Ordinal data

118)

119)

What are the two most common formats requested by business analysts?

A) Text and tabular formats B) Text and numeric formats C) Numeric and tabular formats D) Alphanumeric and text formats

120)

Based on Lab 2.1 Excel: Identify and Work with Different Data Types, and the exhibit below, which of the following measures would not appear in the status bar (marked with the number 2 in the screenshot) when selecting the collection of dates marked with the number 1?

A) B) C) D)

Count Sum Average Proportion

121)

Based on Lab 2.1 Excel: Identify and Work with Different Data Types, and the exhibit below, which of the following measures would appear in the status bar (marked with the number 2 in the screenshot) when selecting the collection of product descriptions marked with the number 1?

A) B) C) D)

Count Sum Average Proportion

122)

Based on Lab 2.2 Tableau: Preparing Different Data Types for Analysis, what data type is described by the area referred to as dimensions?

A) B) C) D)

Interval Quantitative Categorical Ratio

123)

Based on Lab 2.2 Tableau: Preparing Different Data Types for Analysis, what data type is described by the area referred to as measures?

A) B) C) D)

Numerical Nominal Categorical Ordinal

124)

Based on Lab 2.3 Tableau: Conducting Preliminary Exploratory Analysis, given this key and this visualization, which of these states had the lowest level of sales?

Key:

A) B) C) D)

Texas Arkansas Tennessee Nebraska

125)

Based on Lab 2.4 Excel: Aggregating and Visualizing Different Data Types, given this key and this visualization, what does the slicer allow you to see?

A) B) C) D)

Total sales by product_description Total sales by customer_ID Total sales by customer_st Total sales by customer_city

ESSAY. Write your answer in the space provided or on a separate sheet of paper.

126) Why would average customer rating in a product review considered to be a calculated variable?

127)

Why would companies sometimes prefer internal data sources to external data sources?

How is knowing the quality of their own data helpful?

128)

129)

Why are enterprise systems, or ERP systems described as centralized databases?

Why is one of the big data descriptors as one of the four V’s, veracity, such an important consideration for business analysts?

Answer Key Test name: chapter 2 1) FALSE 2) TRUE 3) TRUE 4) FALSE 5) TRUE 6) TRUE 7) FALSE 8) TRUE 9) FALSE 10) TRUE 11) FALSE 12) TRUE 13) TRUE 14) TRUE 15) FALSE 16) TRUE 17) FALSE 18) C 19) D 20) C 21) B 22) D 23) C 24) C 25) A 26) A 27) B 28) A 29) A 30) C 31) A 32) C 33) D 34) B 35) C 36) C 37) A

38) B 39) B 40) B 41) A 42) C 43) B 44) B 45) A 46) C 47) A 48) D 49) B 50) A 51) B 52) D 53) B 54) C 55) A 56) C 57) B 58) D 59) B 60) B 61) A 62) A 63) D 64) A 65) C 66) A 67) C 68) C 69) Essay

To get the average customer rating, the system would have to compute the average of all customer ratings to date, making it a calculated variable.

70) Essay

Since the companies have gathered, collected, and processed their own internal data, they know the quality level of that data and can better decide if it is useful in answering management’s questions.

71) Essay

Enterprise systems, or ERP systems, are a type of business management software that integrates applications and data from throughout the business (such as manufacturing, accounting, finance, and human resources) into one system. Since the enterprise system is stored in common databases in one location, they are called centralized databases.

72) Essay

Knowing whether the data conveys facts or opinions, or has errors or missing data is an important consideration when determining if the data can address business questions.

Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.

130) A sample can be used to make inferences about a population. ⊚ true ⊚ false 131)

Descriptive statistics should be run on samples, not populations. ⊚ true ⊚ false

132)

In simple random sampling, every observation in the population has an equal chance of being selected. ⊚ true ⊚ false

133)

One reason to filter data is to speed up analysis. ⊚ true ⊚ false

134)

The mean is the midpoint of a data distribution. ⊚ true ⊚ false

135)

Kurtosis can be used in risk management. ⊚ true ⊚ false

136)

A histogram is an appropriate chart for a visualization showing how many of each type of product was sold during the month of June. ⊚ true ⊚ false

137)

The null hypothesis states a potential result (or relationship) that the business analyst expects. ⊚ true ⊚ false

138)

An ANOVA test would be the appropriate test to conduct to determine if the sales of a company’s three main products are significantly different. ⊚ true ⊚ false

139)

Correlation produces an equation of a line. ⊚ true ⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

140) If a business analyst wanted to learn about college students in the state of Texas by having them complete an online survey. Would the analyst be more likely to analyze a sample or a population?

A) Population B) Sample C) It depends on whether the analyst uses SurveyMonkey or Qualtrics for the survey.

D) It depends on what time of year the survey is administered.

141)

Assume that a company, UGrowIt, helps people who are new to growing vegetables or have not been successful at growing vegetables in the past. UGrowIt travels to people’s gardens and provides gardening advice on how to get started, eliminate pests and insects, or troubleshoot other gardening problems. The company sent a survey to each of its 10,000 customers to see how satisfied customers are with the company. 2,500 customers responded to the survey. Using the collected data, UGrowIT determined that the average satisfaction is 9.2 out of a possible 10.0 (the highest) for respondents. What is 9.2?

A) Parameter B) Statistic C) Hypothesis test t Stat D) Population

142)

Assume that a company, UGrowIt, helps people who are new to growing vegetables or have not been successful at growing vegetables in the past. UGrowIt’s employees called Growers travel to people’s gardens and provides gardening advice on how to get started, eliminate pests and insects, or troubleshoot other gardening problems. Each Grower maintains a log of miles traveled as well as time spent at each client. The CEO of UGrowIt wants to know customers’ satisfaction with each Grower using phone interviews. What type of sampling method would be appropriate to make sure that each Grower has adequate representation of customers selected for a phone interview?

A) Simple random sampling B) Stratified random sampling C) Cluster sampling D) Convenience sampling

143)

A business analyst, who has four teenagers ranging from 13 to 19 years old, is studying the marketing preferences of teenagers. To collect data, the business analyst throws a huge outdoor summer bash for all of her kids’ friends. As part of the bash, the teenagers play a game that allows the business analyst to collect the necessary data. What type of sampling method was used to collect data?

A) Simple random sampling B) Stratified random sampling C) Cluster sampling D) Non-probability sampling

144)

Assume that a company, UGrowIt, helps people who are new to growing vegetables or have not been successful at growing vegetables in the past. UGrowIt’s employees called Growers travel to people’s gardens and provides gardening advice on how to get started, eliminate pests and insects, or troubleshoot other gardening problems. Each Grower maintains a log of miles traveled as well as time spent at each client and enters the data into the company’s ERP system at the end of every day. If the CEO wants to analyze the total miles and average time spent with a client by Grower for the month of March which of the following approaches would be appropriate?

A) Filtering B) Stratified random sampling C) Cluster sampling D) Simple random sampling

145)

A company is trying to determine whether employees prefer working at home or inperson at the office. A business analyst, who prefers to work at home, is asked to conduct a survey about employees’ preferences. As part of the process, the business analyst collects a response from all employees and then eliminates most of the surveys preferring in-person due to “problems with the survey”. The final results support working at home. What bias is affecting the data analytics process?

A) Nonresponse bias B) Selection bias C) Confirmation bias D) Outlier bias

146)

What is the median of the following numbers?

2 3 4 5 6 7 10 11 11 15 A) 10 B) 6.5 C) 7.4 D) 11

147)

What is the mode of the following numbers?

2 3 4 5 6 7 10 11 11 15 A) 10 B) 6.5 C) 7.4 D) 11

148)

What is the mean of the following numbers?

2 3 4 5 6 7 10 11 11 11 A) 10 B) 6.5 C) 7 D) 11

149)

What type of distribution could have a mean, median, and mode all equal to the number 150?

A) Asymmetrical distribution B) Binomial distribution C) Symmetrical distribution D) Uniform distribution

150)

What type of distribution has the following relationship between mode, median, and mean?

Mode < Median < Mean A) Left-skewed B) Right-skewed C) Symmetrical distribution D) Uniform distribution

151)

What type of distribution has the following relationship between mode, median, and mean?

Mode > Median > Mean A) Left-skewed B) Right-skewed C) Symmetrical distribution D) Uniform distribution

152)

153)

154)

What is the range of the following numbers?

2 3 4 5 6 7 10 11 11 15 A) 6 B) 7 C) 10 D) 13 If the variance equals 25, what is the standard deviation?

A) 5 B) 25 C) 50 D) 625

The mean IQ is 100 with a standard deviation of 15. What is the z-score for a person with an IQ of 145?

A) 2 B) 3 C) 9.7 D) 45

155)

Interpret a z-score equal to −3.

A) The observation is three standard deviations above the population mean.

B) The observation is three standard deviations below the population mean.

C) The observation is 30 percent above the population mean.

D) The observation is 30 percent below the population mean.

156)

The Excel Data Analysis ToolPak automatically calculates a Skewness score. Interpret a Skewness equal to 4.2.

A) The data is skewed left.

B) The data is skewed right.

C) The data is symmetrical.

D) The data is negatively skewed.

157)

Identify the chart type for the exhibit below.

A) B) C) D)

Bar chart Box plot Histogram Scatter plot

158)

What are the X-axis (Days) in the chart shown below?

A) B) C) D)

Bins Categories Quartiles t Stat

159)

Identify the chart type for the exhibit below.

A) B) C) D)

Bar chart Box plot Histogram Scatter plot

160)

What is the mean Sales Price in the chart shown below?

A) B) C) D)

$59.00 $149.00 $624.40 $949.00

161)

What is the median Sales Price in the chart shown below?

A) B) C) D)

$59.00 $149.00 $624.40 $949.00

162)

What is the interquartile range (IQR) for Sales Price in the chart shown below?

A) B) C) D)

$800.00 $890.00 $1,780.00 $2,580.00

163)

How many outliers are in the Sales Price chart shown below?

A) B) C) D)

0 2 3 4

164)

A new business, CoolIT, sells items to keep you cool when outside. Its products include coolers, generators, floats, and other water accessories designed to beat the heat. It opened the store at the beginning of June. Management has asked the following question: Is the average sale during the first 100 days of business different than the average sale during the second 100 days of business? A business analyst used the Excel Data Analysis ToolPak to create the following hypothesis test. Assuming alpha equals 5% (0.05), what is the p-value of the t Stat?

A) B) C) D)

0.36 0.72 1.65 1.97

165)

A new business, CoolIT, sells items to keep you cool when outside. Its products include coolers, generators, floats, and other water accessories designed to beat the heat. It opened the store at the beginning of June. Management has asked the following question: Is the average sale during the first 100 days of business different than the average sale during the second 100 days of business? A business analyst used the Excel Data Analysis ToolPak to create the following hypothesis test. Should the business analyst conduct a one-tailed or twotailed hypothesis test to evaluate management’s question?

A) B) C) D) 166)

One-tailed Two-tailed It depends on the alpha.

It depends on the Type II error.

A new business, CoolIT, sells items to keep you cool when outside. Its products include coolers, generators, floats, and other water accessories designed to beat the heat. One of its most popular products, a solar cooler, was redesigned after two years of being on the market.

CoolIT would like to know if monthly sales were higher for the redesigned model. CoolIT has 24 months of sales for the original model and 24 months of sales for the redesigned model. What would be the appropriate test statistic to see if the average monthly sales were different?

A) ANOVA B) Chi-square C) Independent t-test D) Paired t-test

167)

A new business, CoolIT, sells items to keep you cool when outside. Its products include coolers, generators, floats, and other water accessories designed to beat the heat. CoolIT has been spending money on innovative advertising in hopes of increasing its sales revenue.

Below is a scatterplot showing advertising expense and sales revenue for the last 36 months.

Based on the chart what type of correlation do advertising expense and sales revenue have?

A) B) C) D)

A positive correlation A negative correlation No correlation Perfect correlation

168)

A new business, CoolIT, sells items to keep you cool when outside. Its products include coolers, generators, floats, and other water accessories designed to beat the heat. CoolIT has been spending money on innovative advertising in hopes of increasing its sales revenue. A CoolIT business analyst ran a regression using 36 months of data using the Excel Data Analysis Toolpak. The output is shown below. What is the slope of the line?

A) B) C) D)

−15.45 17.76 8.92 163.27

169)

A new business, CoolIT, sells items to keep you cool when outside. Its products include coolers, generators, floats, and other water accessories designed to beat the heat. CoolIT has been spending money on innovative advertising in hopes of increasing its sales revenue. A CoolIT business analyst ran a regression using 36 months of data using the Excel Data Analysis Toolpak. The output is shown below. Using the regression output, what is projected sales revenue if CoolIT spends $10,000 on advertising?

A) B) C) D)

10,163 163,000 796,204 1,632,717

170)

What is the minimum Sales Price in the chart shown below?

A) B) C) D)

$19.00 $59.00 $149.00 $624.40

171)

What is the maximum Sales Price in the chart shown below?

A) B) C) D)

$949.00 $1,799.00 $2,299.00 $2,599.00

172)

What is the 25th percentile in the chart shown below?

A) B) C) D)

$19.00 $59.00 $149.00 $949.00

173)

What is the 75th percentile in the chart shown below?

A) B) C) D)

$59.00 $149.00 $949.00 $1,799.00

174)

What is the 50th percentile in the chart shown below?

A) B) C) D) 175)

176)

$59.00 $149.00 $949.00 $1,799.00

What percentile is the median?

A) 25th B) 50th C) 75th D) 100th

A z-score tells us how many __________, a data point (or observation) is from its population mean, μ?

A) standard deviations B) units C) standard errors D) increments

177)

The appropriate test to compare one sample to another sample to see if one is greater than another in some way is called a(n) __________.

A) regression B) two-sample t-test of a difference in means C) one-sample t-test of a difference in means D) chi-squared test of a difference in means

178)

If the p-value of a statistical test > alpha, you: A) should reject the null hypothesis (i.e., significant result).

B) should not reject the null hypothesis (i.e., not significant result).

C) have insufficient evidence to either reject or fail to reject the alternative hypothesis.

D) have insufficient evidence to either reject or fail to reject the null hypothesis.

179)

If the p-value of a statistical test < alpha, you: A) should reject the null hypothesis (i.e., significant result).

B) should not reject the null hypothesis (i.e., not significant result).

C) accept the null hypothesis.

D) have insufficient evidence to either reject or fail to reject the alternative hypothesis.

180)

If the p-value of a statistical test is 0.04 and alpha is 0.05, you: A) should reject the null hypothesis (i.e., significant result).

B) should not reject the null hypothesis (i.e., not significant result).

C) accept the null hypothesis.

D) have insufficient evidence to either reject or fail to reject the alternative hypothesis.

181)

If the p-value of a statistical test is 0.06 and alpha is 0.05, you: A) should reject the null hypothesis (i.e., significant result).

B) should not reject the null hypothesis (i.e., not significant result).

C) accept the alternative hypothesis.

D) have insufficient evidence to either reject or fail to reject the alternative hypothesis.

182)

If we run a regression where y (bankruptcy) = f(factors potentially predicting bankruptcy), what is the dependent variable?

A) Factors predicting bankruptcy B) Bankruptcy C) There are no dependent variables.

D) Cannot be determined based on the given information.

183)

If we run a regression where y (bankruptcy) = f(factors potentially predicting bankruptcy), what is the independent variable?

A) Factors predicting bankruptcy B) Bankruptcy C) There are no dependent variables.

D) Cannot be determined based on the given information.

184)

According to the normal distribution, __________% of the data would fit within 2 standard deviations of the mean?

A) 68 B) 99 C) 95 D) 99.7

185)

According to the normal distribution, __________ % of the data would fit within 1 standard deviation of the mean?

A) 68 B) 99 C) 95 D) 99.7

186)

According to the normal distribution, __________ % of the data would fit within 3 standard deviations of the mean?

A) 68 B) 99 C) 95 D) 99.7

187)

If an accounts payable transaction has a z-score of 3, with a mean of $20,000 and a standard deviation of $5,000, what is the amount of the related party transaction?

A) $20,000 B) $15,000 C) $25,000 D) $35,000

188)

The distribution of hearts within a (fair) deck of cards would follow the __________?

A) normal distribution B) Poisson distribution C) uniform distribution D) chi-square distribution

189)

If the hypothesized relationship is assumed to not exist, this would be an example of a(n) __________ hypothesis.

A) alternative B) correct C) null D) incorrect

190)

A(n) __________ hypothesis is a hypothesis used in hypothesis testing that is opposite of the null hypothesis, or a potential result that the analyst may expect.

A) alternative B) correct C) null D) incorrect

191)

Which of the following graphs would have a correlation coefficient equal to −0.90?

A)

B)

C)

D)

192)

Which of the following graphs would have a correlation coefficient equal to 0.75?

A)

B)

C)

D)

193)

Which of the following graphs would have a correlation coefficient equal to 0.05?

A)

B)

C)

D) 194)

If we run a regression using Sales Revenue = f(GDP, Unemployment Rate, TV Advertising, Radio Advertising, Internet Advertising) what type of regression is this?

A) Multiple regression B) Simple regression C) Uniform regression D) Chi-square regression

195)

What type of test evaluates whether the linear regression model provides a better fit of the data than a model that contains no independent variables?

A) Significance F B) R Square C) p-value D) t Stat

196)

What type of distribution would be appropriate to model the tossing of a coin?

A) Poisson B) Uniform C) Normal D) Binomial

197)

A company wants to make sure that it has enough customer service representatives to provide quality customer service. What type of distribution would be appropriate to model the number of customer service calls per hour that take more than 15 minutes to resolve?

A) Poisson B) Uniform C) Normal D) Binomial

198)

The binomial and Poisson distributions are examples of __________.

A) alpha distributions B) discrete data distributions C) normal continuous distributions D) probability

199)

A company wants to determine whether it should continue keeping its stores open from midnight to 8 a.m. The company wants to first determine how many sales are made during that time and then evaluate the profitability of those sales. It has decided to track late night sales for the next three months. What type of distribution would be appropriate to model the number of sales made between midnight and 8 a.m.?

A) Poisson B) Uniform C) Normal D) Binomial

200)

What is a false positive called?

A) Type I error B) Type II error C) Alpha D) Beta

201)

If the null hypothesis is actually true in the population and you reject the null hypothesis, what are you doing?

A) Making a Type I error B) Making a Type II error C) Setting alpha D) Setting beta

202)

If the alternative hypothesis is actually true in the population and you fail to reject the null hypothesis, what are you doing?

A) Making a Type I error B) Making a Type II error C) Setting alpha D) Setting beta

203)

204)

What is a false negative called?

A) Type I error B) Type II error C) Alpha D) Beta

A company instituted a training program designed to minimize employee fraud. To see if the training worked, a business analyst conducted a hypothesis test testing: H0: The pre-training fraud and post-training fraud levels are the same.

HA: The post-training fraud levels are lower than pre-training fraud levels.

Based on the p-value of the t Stat, the business analyst fails to reject the null hypothesis even though post-training fraud levels were actually lower. What type of outcome is this?

A) Type I error B) Type II error C) Correct D) False positive

205)

Based on the summary statistics calculated in Lab 3.1 Excel, Using Functions to Calculate Descriptive Statistics to Gain Insight About the Distribution of a Sales Data Set, what is the IQR? Average Median Skewness Kurtosis Maximum Value Minimum Value Standard Deviation Range 25th percentile (Quartile 1)

$ 38.47 $ 30.77 0.91 0.91 $ 140.02 $ 2.52 29.14 $ 137.50 $ 13.67

75th percentile (Quartile 3)

$ 54.10

A) B) C) D)

$7.70 $40.43 $67.77 $137.50

206)

Based on the box plot created in Lab 3.2 Excel, Using the Excel Analysis ToolPak to Calculate Descriptive Statistics to Gain Insight About the Distribution of a Sales Data Set, what is the median for in-person sales?

A) B) C) D)

$12.52 $26.97 $33.64 $52.52

207)

Based on the results of the hypothesis test conducted in Lab 3.3 Excel, Performing a ttest for Difference in Means to Determine If the Differences Between In-Person and Online Sales Are Statistically Significant, what is the correct decision? Assume that alpha is set at 0.10 and a one-tailed hypothesis test is appropriate.

A) B) C) D)

Fail to reject the null hypothesis.

Reject the null hypothesis.

Accept the null hypothesis.

Reject the alternative hypothesis.

208)

Based on the results of the ANOVA test conducted in Lab 3.4 Excel, Performing an ANOVA Test for Difference in Means to Determine If There Are Significant Differences Between the Average 4-Year Degree Completion Rate/SAT Average for Public, Private, and For-Profit Colleges, what would you conclude about the differences in the mean completion rates of the three types of colleges (public, private non-profit, and private for profit)? Assume that alpha is set at 0.05 and the alternative hypothesis is that the means are significantly different.

A) Not all of the group means are equal.

B) All of the group means are equal.

C) The mean completion rate at private non-profit colleges is significantly higher than

the other types of colleges.

D) The mean completion rate at private for profit colleges is significantly lower than the other types of colleges.

209)

Based on the regression output generated in Lab 3.5 Excel, Deriving Cost Drivers for Activity-Based Costing (Regression Analysis), which of the following statements about the cost drivers for overhead cost per delivery is true? Assume alpha is set at 0.05.

A) Only Time per Delivery is a significant cost driver for overhead cost per delivery.

B) Miles per Delivery and Time per Delivery are significant cost drivers for overhead

cost per delivery.

C) Only Miles per Delivery is a significant cost driver for overhead cost per delivery.

D) Miles per Delivery, Time per Delivery, and Weight per Delivery are all significant cost drivers for overhead cost per delivery.

ESSAY. Write your answer in the space provided or on a separate sheet of paper.

210) Compare a histogram and a bar chart.

211)

Compare the mean, median, and mode. What are they measures of?

212)

Compare the range, variance, and standard deviation. What are they measures of?

213)

Draw a boxplot and label the parts.

214)

What is the difference between the null hypothesis and the alternative hypothesis? What are the four possible outcomes of a hypothesis test?

215)

216)

Explain the difference between correlation and regression.

In a regression, what is the difference between a Significance F test, the R Square, the Adjusted R Square, and the p-values of regression coefficients.

Answer Key Test name: chapter 3 1) TRUE 2) FALSE 3) TRUE 4) TRUE 5) FALSE 6) TRUE 7) FALSE 8) FALSE 9) TRUE 10) FALSE 11) B 12) B 13) B 14) D 15) A 16) C 17) B 18) D 19) C 20) C 21) B 22) A 23) D 24) A 25) B 26) B 27) B 28) C 29) A 30) B 31) C 32) B 33) B 34) B 35) B 36) B 37) D

38) A 39) D 40) C 41) A 42) D 43) B 44) C 45) B 46) B 47) A 48) B 49) B 50) A 51) A 52) B 53) B 54) A 55) C 56) A 57) D 58) D 59) C 60) C 61) A 62) B 63) D 64) A 65) A 66) A 67) D 68) A 69) B 70) A 71) A 72) A 73) B 74) B 75) B 76) B 77) B

78) B 79) A 80) B 81) Essay

A histogram and a bar chart look similar as they both have bars. However, bars in a bar chart represent categories, while bars of a histogram represent bins. Bar charts have gaps between the bars, while histograms do not (unless data is missing). In a bar chart, the Y-axis can be associated with a variety of descriptive statistics (average, sum, and count, for example), but the vertical axis in a histogram is always associated with the count of observations in each particular bin.

82) Essay

The mean, median, and mode are all measures of central tendency, describing the center point of a dataset. The mean is the average of the measurements in the data set. It is susceptible to outliers. The median is the midpoint of a dataset’s distribution. It is not susceptible to outliers.

The mode is the most common observation in a data set. It is the only measure of central tendency for categorical data.

83) Essay

The range, variance, and standard deviation are all measures of dispersion, or how the data is dispersed. The range equals the difference between the maximum value and the minimum value in a data set. The range is the simplest measure of dispersion, difficult to interpret as it is based on only two data points, and may be affected by outliers. The variance is calculated by taking the average of the squared deviations from the mean for each observation. It is expressed in squared values, making it difficult to interpret. The standard deviation is the square root of the variance.

It is expressed in the same units as the data values, making it easier to interpret. The standard deviations of two datasets can be compared; the dataset with the larger standard deviation has more variation or dispersion around its mean.

84) Essay

Sample box plot from chapter 6

85) Essay

The first is the base case or the statement being tested, often called the null hypothesis, abbreviated as H₀. It assumes that the hypothesized relationship does not exist, and that there is no significant difference between two samples or populations. The alternative hypothesis, abbreviated as HA is the statement being tested against the H₀. It states a potential result that the analyst may expect. It is only accepted if there is convincing evidence to support that it is true.

The four possible outcomes are (Exhibit 3.22):

Reject the Null Hypothesi s

Null Hypothesis Is Actually True in Population Type I error

Alternative Hypothesis Is Actually True in Population %media:1325272402137168 2-1.ext%

(False positive) Correct decision

Fail to Reject the Null Hypothesi s

%media:1325272402137168 2-2.ext%

Type II error

(False negative) Correct decision

86) Essay

Correlation measures the linear association, or the relationship, between two variables by examining how the variables change with respect to each other. Variables can have no relationship, a positive relationship, or a negative relationship measured by the correlation coefficient, which has a value between -1 and 1. Once we find a linear relationship between variables (using the correlation coefficient), our next step is to use regression analysis, which measures the relationship between one output variable and one or more input variables. If a relationship does exist, then we can use the regression model to help predict a given output variable. Regression determines whether variables move together, produces an equation of the line, and predicts expected outcomes based on the relationship.

87) Essay

The Significance F test evaluates whether the linear regression model provides a better fit of the data than a model that contains no independent variables. A very low significance F value indicates that the regression model with one or more independent variables is better than an intercept-only model.

The R Square value measures goodness of fit, or how well the model predicted the dependent variable. An R Square value of 0 means that the model has no ability to explain the dependent variable, while an R Square value of 1 means that the model perfectly explains the dependent variable. Values in between 0 and 1 indicate the percent variation of the dependent variable that is explained by the independent variable(s), holding all other variables constant.

The Adjusted R Square is used for multiple regression models. The Adjusted R Square adjusts the R Square for each additional variable, increasing only if the additional variable improves the model. p-values are used to test the significance of the coefficients of the independent variables. A very small p-value (that is less than your stated significance level) indicates that the independent variable is meaningful in predicting or explaining the dependent variable. A large p-value indicates that the independent variable is not meaningful in predicting or explaining the dependent variable. When there is only one explanatory variable, the p-value for that explanatory variable will be identical to the Significance F value.

Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.

217) Diagnostic Analytics emphasizes “What happened?”. ⊚ true ⊚ false 218)

Descriptive Analytics emphasizes “Why something happened?”. ⊚ true ⊚ false

219)

Predictive Analytics emphasizes “Will something happen in the future?”. ⊚ true ⊚ false

220)

"What should we do based on what we expect will happen?" is investigated using Prescriptive Analytics. ⊚ true ⊚ false

According to Benford’s law, numbers with the first digit “4” are more likely than those with the first digit “3”. ⊚ true ⊚ false

221)

222)

Descriptive analysis is always the first type of data analytics performed. ⊚ true ⊚ false

223)

If you have minimums and maximums that are far away (several standard deviations away from the mean) from the rest of the data observations, medians would be the best measure of central tendency? ⊚ true ⊚ false

224)

A company’s descriptive statistics are appropriately compared to either 1) the economy as a whole, 2) the company’s respective industry, 3) competitors and 4) the company’s prior performance. ⊚ true ⊚ false

225)

Descriptive analytics address the question, “Why it happened?”. ⊚ true ⊚ false

226)

Descriptive analytics are analytics that characterize, summarize, and organize features and properties of the data to facilitate understanding. ⊚ true ⊚ false The saying “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”, illustrates the problem with knowing precisely how much value accrues from advertising expenses to sales or the value of the firm. ⊚ true ⊚ false

227)

228)

Diagnostic analytics is performed to investigate the underlying reasons for past results that cannot be answered by simply looking at the descriptive data. ⊚ true ⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

229) What is the second step in the SOAR model?

A) Obtain the Data B) Own the Data C) Observe the Data D) Organize the Data 230)

Which type of question does descriptive analytics address?

A) What happened?

B) What should we do based on what we expect will happen?

C) Why did it happen?

D) Will it happen in the future?

231)

Which type of question does diagnostic analytics address?

A) What happened?

B) What should we do based on what we expect will happen?

C) Why did it happen?

D) Will it happen in the future?

232)

What type of analytics addresses questions of “Why did it happen?”?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

233)

What type of analytics would predict if a company is expected to go bankrupt?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

234)

If we wanted to know what level of sales was achieved last quarter at a competitor company, we would perform ________ analytics.

A) descriptive B) diagnostic C) predictive D) prescriptive

235)

What type of analytics would investigate performance different than was expected, such anomalies or outliers?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

236)

What type of analytics would primarily use analytics to separate, or classify, a sample into two or more groups or classes?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

237)

What kind of analytics tool or technique is generally used to perform diagnostic analytics?

A) Variance analysis B) Vertical analysis C) Time series D) Regression

238)

239)

Which analytics tool or technique is generally used in descriptive analytics?

A) Time series B) Classification C) Variance analysis D) Horizontal analytics

Which type of analytics will provide insight on whether the company should rent or own its headquarters?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

240)

Which type of analytics will forecast product demand?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

241)

Diagnostic analytics would be more likely to use these tools in its analysis than other types of analytics?

A) Totals, sums, averages, and subtotals B) Fuzzy matching, Benford’s law, variance analysis C) Forecasting tools, regression, and classification D) Goal-seek analysis, what-if analysis

242)

Descriptive analytics would be more likely to use these tools in its analysis than other types of analytics?

A) Totals, sums, averages, and subtotals B) Fuzzy matching, Benford’s law, variance analysis C) Forecasting tools, regression, and classification D) Goal-seek analysis, what-if analysis

243)

To compute the percentage change in a horizontal analysis from last year to this year, the computation will be: A) (Current Year − Last Year) ÷ Last Year.

B) (Last Year − Current Year) ÷ Last Year.

C) (Last Year − Current Year) ÷ Current Year.

D) (Current Year − Last Year) ÷ Current Year.

244)

245)

In vertical analysis, the relevant base for cost of sales is which of the following?

A) Net Sales B) Total assets C) Total stockholders’ equity D) Total credit sales

In vertical analysis, the relevant base for long-term debt, a balance sheet item, is which of the following?

A) Sales revenue B) Total assets C) Total equity D) Total liabilities

246)

Which measure would help us evaluate what happens in the highest and lowest 20 percent of the data?

A) Quintiles B) Quartiles C) Average D) Deciles

247)

While a ________ reorganizes and summarizes certain data using cross-tabulations without changing the underlying spreadsheet (or data), a ________ is a graphical depiction of those cross-tabulations.

A) pivot chart; pivot table B) pivot table; pivot chart C) histogram; pivot table D) graph; table

248)

Of the following measures, the best way to analyze the extreme values in the sample is to consider the: A) mean.

B) maximum or minimum.

C) mode.

D) standard deviation.

249)

Of the following measures, the best way to analyze the variability in the sample is to consider the ________.

A) mean.

B) maximum or minimum.

C) mode.

D) standard deviation.

250)

Descriptive analytic measures of central tendency include all except which of the following?

A) Counts B) Means C) Medians D) Modes

251)

________ expresses financial information in relation to some relevant figure or base.

A) Vertical analysis B) Horizontal analysis C) Ratio analysis D) Pivot tables

252)

________ provides comparative changes about various line items of each financial statement over time.

A) Vertical analysis B) Horizontal analysis C) Percentage change D) A pivot table

253)

________ explains the extent to which a data item gains or loses magnitude or value.

A) Vertical analysis B) Horizontal analysis C) Percentage change D) A pivot table

254)

A ________ is a display of rectangles with an area proportional to the underlying frequency of the data.

A) histogram B) frequency diagram C) line chart D) pie chart

255)

Descriptive analytics are characterized by ________ of the relevant data.

A) summarization B) uncovering patterns C) what-if scenarios D) cash flow analysis

256)

Descriptive analytics is part of which component of the SOAR model?

A) Ask the Question B) Perform the Analysis C) Share the Story D) Master the Data

257)

The calculation (New − Old) ÷ Old would be used primarily in: A) descriptive statistics B) vertical analysis C) horizontal analysis D) ratio analysis

258)

A diagram showing interrelationships between two or more variables is called a ________.

A) graph B) pivot table C) histogram D) variance analysis

259)

An analysis which expresses financial information in relation to some relevant figure or base is called ________.

A) Dupont analysis B) vertical analysis C) horizontal analysis D) ratio analysis

260)

To determine how much each customer purchases and owes, which enterprise system is used?

A) Supply chain system B) Credit analysis C) Customer relationship management (CRM) D) Customer diagnostic analytics

261)

________ analytics are often the first type of analytics performed that leads to other types of analytics for further investigation.

A) Descriptive B) Diagnostic C) Predictive D) Prescriptive

262)

Summarizing data to understand what has happened is what type of analytics?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

263)

According to Benford’s law, what is the expectation for the percentage of times that the first digit of a number is the number “1”?

A) 15.12% B) 24.58% C) 35.80% D) 30.10%

264)

What is an example of a cash reconciling item for an item recorded by the bank but not yet recorded in the general ledger?

A) Interest earned on notes held by the bank B) Outstanding deposits C) Outstanding checks D) There are no items recorded by the bank but not recorded in the general ledger.

265)

Which of the following can potentially find a transaction that is recorded twice?

A) Fuzzy matching B) Test of duplicates C) Benford’s law D) Sequence check

266)

________ is used to help find customers that might have a similar address or name as employees.

A) Duplicate testing B) Sequence check C) Benford’s law D) Fuzzy matching

267)

Where would the company likely get data evaluating the customer with the highest dollar amount of orders in the past month?

A) Customer relationship management system B) Manufacturing system C) Human resources system D) Supply chain system

268)

According to Benford’s law, which one of these first digits has a lower probability of occurrence than the first digit “5”?

A) 3 B) 2 C) 4 D) 9

269)

While Benford’s Law mainly applies to the first digit of a number, it can also be applied

to: A) B) C) D)

the second through fourth digits the first two digits the last two digits All of the answer choices are correct

270)

Analytics regarding the inventory item that produces the most profit is an example of the diagnostic analytics of: A) performing drill-down detailed analytics.

B) classification analysis.

C) identifying anomalies or outliers.

D) performing descriptive analytics.

271)

Evaluating the relationship between R&D expenditures and net income is an example of the diagnostic analytics of: A) performing drill-down detailed analytics.

B) determining relations or patterns or linkages between variables through statistical analysis.

C) identifying anomalies or outliers.

D) performing descriptive analytics.

272)

Performing a bank reconciliation is example of the diagnostic analytics of ________.

A) performing drill-down detailed analytics B) determining relations or patterns or linkages between variables through statistical analysis C) identifying anomalies or outliers D) performing descriptive analytics

273)

What is an observation called that lies outside its expected distribution?

A) Outlier B) Unexpected observation C) Fuzzy matching D) Management by exception

274)

Diagnostic analytics addresses which of the following questions?

A) What happened?

B) Why did it happen?

C) Will it happen in the future?

D) Based on what we expect will happen, how do we optimize?

275)

Diagnostic analysis includes all of the possible types of analytics except for which of the following?

A) Identifying anomalies and outliers B) Performing drill-down detailed analytics C) Performing marginal analysis D) Performing statistical analysis

276)

Testing for duplicate transactions is an example of what type of diagnostic analytics?

A) Identifying anomalies and outliers B) Finding previously unknown linkages, patterns, or relationships between variables C) Performing marginal analysis D) Performing descriptive analytics

277)

Testing using fuzzy matching is an example of which type of diagnostic analytics?

A) Identifying anomalies and outliers B) Finding previously unknown linkages, patterns, or relationships between variables C) Performing marginal analysis D) Performing descriptive analytics

278)

The test to see if the key number field in a record is in correct ascending or descending order is called a(n)________ check.

A) order B) sequence C) compliance D) sorting

279)

If the data analyst hypothesizes that grocery sales are higher on Sunday than on other days, the null hypothesis would likely state that: A) grocery sales are lower or no different on Sunday than on other days.

B) grocery sales are higher on Sunday than on other days.

C) grocery sales are higher or no different on Sunday than on other days.

D) grocery sales are lower on Sunday than on other days.

280)

If we are running a regression to analyze the question if advertising expenses are related to sales revenue outcomes, what would be the independent variable?

A) sales revenue B) advertising expenses C) cost of goods sold D) operating expenses

281)

In a bank reconciliation, outstanding checks are recorded by the company but not yet recorded by the: A) bank.

B) vendor.

C) regulator.

D) owner.

If the p-value of the chi-square test is smaller than the α (alpha) threshold, we could conclude what about the observed relationship as compared to that expected from Benford’s law?

A) Observed relationship is not different than that expected by Benford’s law.

B) Observed relationship is different than that expected by Benford’s law.

C) No conclusion can be drawn from this statistical test.

282)

283)

The practice of bringing specific issues to the attention of management if they depart from expectation is called ________.

A) anomaly B) management by exception C) outlier D) fuzzy matching

284)

Diagnostic analytics is broken down into all except for which of the following broad categories?

A) Identifying anomalies and outliers B) Performing drill-down detailed analytics C) Performing statistical analyses D) Performing descriptive analytics

285)

________ looks for underlying patterns in the data by examining the data at a more detailed level in order to examine potential correlations.

A) Fuzzy matching B) Drill-down detailed analytics C) Summarizing data D) Descriptive analytics

286)

What term encapsulates analytics that analysts use to summarize and explain performance?

A) Confirmatory business analytics B) Exploratory business analytics C) Descriptive statistics D) Regression analysis

287)

What term encapsulates analytics that use statistics to judge the likelihood (probability) of a future event or outcome occurring?

A) Exploratory business analytics B) Confirmatory business analytics C) Descriptive analytics D) Hypothesis testing

288)

289)

Exploratory analytics includes which business analytics types?

A) Predictive Analytics B) Diagnostic Analytics C) Adaptive or Autonomous analytics D) Prescriptive Analytics

What term is used to describe brief, generally small, visuals that fit within one cell in Excel that visually depicts what happened in the cells next to it?

A) Small graphics B) Sparklines C) Pivot charts D) Analytic charts

290)

Benford’s law follows the distribution: A) log10(1 + (1 ÷ d)), where d is each digit 1, 2, and so on.

B) log10(d + (1 ÷ d)), where d is each digit 1, 2, and so on.

C) ln10(1 + (1 ÷ d)), where d is each digit 1, 2, and so on.

D) ln10(d + (1 ÷ d)), where d is each digit 1, 2, and so on.

291)

Based on the summary statistics computed in Lab 4.1 Excel, Evaluating Inventory, Waste and Profit Margins, what is the average loss due to waste?

A) B) C) D)

0.1361 0.1167 0.1105 5.661

292)

Based on the conditional formatting used in Lab 4.2 Excel, Using Conditional Formatting, how would you describe Check 11766?

A) B) C) D)

Outstanding check Outstanding deposit NSF Check Recording Error

Based on Lab 4.3 Excel, Applying Benford’s Law, the equation, log10(1 + (1 ÷ d)), where d is each first digit 1, 2, and used in Benford’s Law analysis, is used to determine which of the following?

A) The expected distribution of the first digit for a naturally occurring population B) The actual distribution of the first digit for a naturally occurring population C) The expected distribution of the last digit for a naturally occurring population D) The actual distribution of the last digit for a naturally occurring population

293)

294)

Based on Lab 4.3 Excel, Applying Benford’s Law, what statistic is used to determine if the actual distribution of first digits for a naturally occurring population is different than the expected distribution of first digits?

A) T-statistic B) Z-statistic C) Chi-square statistic D) P-statistic

295)

Based on Lab 4.3 Excel, Applying Benford’s Law, if the chi-square statistic reports a pvalue of 0.59, what does that mean regarding the actual distribution of first digits?

A) A p-value of 0.59 suggests that the actual distribution of first digits is not statistically different than the expected distribution of first digits.

B) A p-value of 0.59 suggests that the actual distribution of first digits is statistically different than the expected distribution of first digits.

C) A conclusion cannot be drawn from the chi-square statistic.

ESSAY. Write your answer in the space provided or on a separate sheet of paper.

296) Why would an analyst be interested in performing descriptive analytics before other forms of analytics (such as diagnostic, predictive, prescriptive, or adaptive or autonomous analytics)?

297)

Describe the differences between descriptive analytics and diagnostic analytics.

298)

Why is understanding what is expected (or the expectation) so critical for finding anomalies and outliers in diagnostic analytics?

299)

How is the diagnostic analytics technique of uncovering previously unknown relationships and linkages among variables different than finding anomalies?

300)

Considering the Data Analytics Toolpak in Excel, explain any three of the analysis tools.

301)

Calculate the percentage change in Sales and marketing expenses from 2020 to 2021 for Alphabet (Google).

302)

Calculate the percentage change in General and Administrative expenses from 2020 to 2021 for Alphabet (Google).

Answer Key Test name: chapter 4 1) FALSE 2) FALSE 3) TRUE 4) TRUE 5) FALSE 6) FALSE 7) TRUE 8) TRUE 9) FALSE 10) TRUE 11) TRUE 12) TRUE 13) A 14) A 15) C 16) B 17) C 18) A 19) B 20) C 21) A 22) D 23) D 24) C 25) B 26) A 27) A 28) A 29) B 30) A 31) B 32) B 33) D 34) A 35) A 36) B 37) C

38) A 39) A 40) B 41) C 42) A 43) B 44) C 45) A 46) A 47) D 48) A 49) B 50) D 51) A 52) D 53) D 54) A 55) B 56) C 57) A 58) B 59) C 60) A 61) A 62) B 63) A 64) B 65) A 66) B 67) B 68) D 69) B 70) B 71) B 72) B 73) B 74) A 75) A 76) D 77) A

78) C 79) A 80) Essay

Sometimes analysts who perform descriptive analytics may find an outcome that is quite different from what they expected. Their initial intent had been to find out what happened, but the process triggers the need for diagnostic analytics to explain that outcome. This is one reason why descriptive analytics are often performed before diagnostic analytics, even though there is no set process requiring analytics to be performed in a specific order or to include all types of analytics.

81) Essay

While descriptive analytics addresses the question “What happened?” diagnostic analytics takes the analysis a step further by asking “Why did it happen?” and “What are the causes of past results?” Diagnostic analytics are performed to investigate the underlying reasons for past results that cannot be answered by simply looking at the descriptive data.

82) Essay

To detect anomalies and outliers in diagnostic analytics, it is important to establish the norm, or the expectation. For example, the marketing department might expect the company’s sales to increase at roughly the same rate as sales in other companies in the same industry. If sales do not increase in line with the competition, then this anomaly should be investigated further.

83) Essay

While finding anomalies looks for reasons that phenomena are different than expected, drilldown analytics and other diagnostic analytics works to uncover additional details in the data by digging more deeply into the data and summarizing the data at different levels to understand why something happened. In doing so, we look for patterns among variables to identify potential relationships and patterns. Using drill-down analytics, we shift from an overview of the data to a more detailed (or granular) view of the data to gain insight.

84) Essay

Correlation: To understand if and the extent to which variables are related to each other Descriptive statistics: To understand the basic statistics, including the mean (average), standard deviation, and minimums and maximums, of a data set Histogram: To understand the frequency of the data using a display of rectangles whose areas are proportional to the underlying frequency of the data Regression: To understand the relationship between specific inputs and outputs t-test: To understand the probability of a statistical difference in averages between two independent samples or between a paired sample through time

85) Essay

= [Sales and marketing 2021 ($22,912) − Sales and marketing 2020 ($17,946)] ÷ Sales and marketing 2020 ($17,946) = 27.67% (or 0.2767) 86) Essay

= [General and administrative 2021 ($13,510) − General and administrative 2020 ($11,052)] ÷ General and administrative 2020 ($11,052)] = 22.24% (or 0.2224)

Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.

303) Predictive and prescriptive analytics provide less deterministic output and more probabilistic models (judging the likelihood (probability) of a future event or outcome occurring) as compared to descriptive and diagnostic analytics. ⊚ true ⊚ false 304)

Compilation of the financial statements would be a form of predictive analytics. ⊚ true ⊚ false

305)

A good first step in a bankruptcy prediction is to know how many companies go bankrupt each year (as a percentage of total firms) to understand how prevalent bankruptcy is as a whole. ⊚ true ⊚ false

306)

Predicting whether financial statements are fraudulent or not is an example of classification. ⊚ true ⊚ false

307)

Predicting whether it will rain tomorrow or next week is more deterministic than reporting the rain that happened yesterday. ⊚ true ⊚ false

308)

The balance in the company cash account is deterministic as compared to being probabilistic. ⊚ true ⊚ false

309)

Predicting the possible existence of fraud is a classification predictive analysis. ⊚ true ⊚ false

310)

The process of changing the values in various input cells to see how they might affect the output is called foregone costs. ⊚ true ⊚ false

311)

Prescriptive analytics will optimize the decisions based on the forecast of the future. ⊚ true ⊚ false

312)

Prescriptive analytics will often build upon descriptive, diagnostic, or predictive analytics. ⊚ true ⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

313) Predictive analytics would be more likely to use these tools in its analysis than other types of analytics?

A) Totals, sums, averages, and subtotals B) Fuzzy matching, Benford’s law, variance analysis C) Forecasting tools, regression, and classification D) Goal-seek analysis, what-if analysis 314)

Prescriptive analytics would be more likely to use these tools in its analysis than other types of analytics?

A) Totals, sums, averages, and subtotals B) Fuzzy matching, Benford’s law, variance analysis C) Forecasting tools, regression, and classification D) Goal-seek analysis, what-if analysis

315)

What type of analytics would include a classification analysis to assess whether the bank should extend a loan?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

316)

Which type of analysis is generally associated with predictive analytics?

A) What-if scenario B) Fuzzy matching C) Time series analysis D) Means, modes, medians, and counts

317)

Which type of question does prescriptive analytics address?

A) What happened?

B) What should we do based on what we expect will happen?

C) Why did it happen?

D) Will it happen in the future?

318)

Which predictive analytics technique would be used to predict whether a firm is likely to have a material misstatement in the coming year?

A) Regression B) Classification C) Benford’s law D) Monetary unit sampling

319)

Which predictive analytics technique would be used to predict the interest rate given from a lender (bank) to a borrower?

A) Regression B) Cross-tabulation C) Looking for anomalies and outliers D) Time-series analysis

320)

Predicting which companies are likely to have misstated financial statements is an example of __________ in predictive analytics.

A) classification B) prediction C) regression D) time series analysis

321)

Forecasting sales using past sales to plan production is an example of which type of predictive analytics?

A) Time series analysis B) Regression C) Classification D) Fuzzy Matching

322)

Classification analysis to decide on whether to grant a loan to a potential borrower is most important for __________.

A) lenders B) auditors C) audit regulators D) investors

323)

The probability of some event occurring based on some historical average is called __________.

A) base rate B) historical rate C) sample average D) classification

324)

Using past performance to predict future performance is called __________.

A) regression B) classification C) forecasting with time series D) segmenting

What would be the dependent variable in a regression determining “How are firm costs dependent on the level of production?” at a decking company?

A) Total production costs B) Board feet C) Type of board manufactured D) Total production revenue

325)

What would be a possible dependent variable in a regression determining “How do lenders set interest rates paid by borrowers?” for a lender?

A) Rate charged or paid to borrower B) Borrower credit history C) Borrower salary D) Borrower debt

326)

327)

__________ is the repeatability of a single variable (e.g., earnings, product demand, sales, cash flows) over time.

A) Persistence B) Durability C) Predictability D) Repetitive Nature

328)

In time series analysis, what would be the best possible independent variable in a regression determining Sales next period, Salest+1?

A) Salest+1 B) Salest C) Salest−1 D) Salest−2

329)

Predicting whether a company will need to restate its financial statements is an example of __________.

A) classification B) regression C) time series analysis D) fuzzy matching

330)

Forecasting earnings is an example of which type of predictive analytics?

A) Classification B) Regression C) Time series analysis D) Variance analysis

331)

Estimating the appropriate cost driver as part of activity-based costing is an example of which type of predictive analytics?

A) Classification B) Regression C) Time series analysis D) Variance analysis

332)

__________ is the situation when the prediction places too little weight on the base rates of the past and instead uses different or new, recently received information.

A) Base rate B) Historical rate fallacy C) Base rate fallacy D) Historical rate

333)

Which of the following is a predictive analytics technique used to estimate a specific dependent variable outcome based on independent variable inputs?

A) Classification B) Regression C) Time series analysis D) Variance analysis

334)

Predictive analytics is useful for which type of analysis?

A) Summarizing data B) Finding anomalies and outliers C) Uncovering patterns D) Forecast the future

335)

Which type of analysis would predictive analytics not be useful for?

A) Classification B) Finding anomalies and outliers C) Regression D) Time series analysis

336)

When using regression analysis, the relationship between two variables matters when you are trying to understand __________.

A) how an independent variable impacts a dependent variable B) how a dependent variable impacts an independent variable C) how future values are based on past values of the same variable D) how estimated trends from the past may continue into the future

337)

Regression analysis can be used to help confidently identify __________.

A) which factors matter the most B) which factors can be ignored C) how factors influence each other D) which factors matter most, which factors can be ignored and how the factors influence each other

338)

Scenario analysis is __________.

A) an analysis of future events performed by assessing the probability of those events and the potential outcomes B) the evaluation of the outcomes based on uncertainty regarding the inputs C) the evaluation of the change in profit associated with the cost or benefit of the next unit D) analysis performed to investigate the underlying cause

339)

__________ analytics identifies the best possible option given constraints or changing conditions.

A) Predictive B) Descriptive C) Prescriptive D) Forecasting

340)

Prescriptive analytics helps identify the best decision based on constraints or changing __________.

A) opportunities B) forecasts C) challenges D) conditions

341)

The technique used in management accounting to determine the change in profit associated with the cost or benefit of the next (or the marginal) unit is called __________.

A) scenario analysis B) goal-seek analysis C) marginal analysis D) predictive analytics

342)

An example of goal-seek analysis is determining __________.

A) the amount of sales to break even B) forecasted sales C) the earnings associated with hitting annual goals D) the level of costs associated with forecasted sales

343)

Which component of the SOAR model does prescriptive analytics fall under?

A) Report the results B) Obtain the data C) Analyze the data D) Specify the question

344)

All of the following are prescriptive analytics techniques except: A) what-if analysis.

B) time series analysis.

C) sensitivity analysis.

D) goal-seek analysis.

345)

All of the following are prescriptive analytics techniques except: A) goal-seek analysis.

B) regression analysis.

C) marginal analysis.

D) cash flow analysis.

346)

Marginal analysis __________ sunk costs (past spending that cannot be recovered).

A) incorporates B) ignores C) requires D) analyzes

347)

Determining the maximum mortgage loan you can afford given your income is an example of __________.

A) scenario analysis B) goal-seek analysis C) marginal analysis D) cash flow analysis

348)

Prescriptive analytics may use __________ as a tool to help perform the analysis.

A) uncovering patterns B) finding outliers C) regression D) sensitivity analysis

349)

Goal seek analysis uses the __________ to find the __________.

A) actual output; actual input B) actual input; actual output C) desired output; required input D) desired input; required output

350)

Based on this scatterplot visualization from Lab 5.1 Excel, Evaluating the Relationship Between Sales and R&D Expenditures, which would you consider to be the independent variable?

A) Revenues (Sales) B) R&D Expenditures C) Cannot determine

351)

Based on these regression results from Lab 5.1 Excel, Evaluating the Relationship Between Sales and R&D Expenditures, how much of the variance in sales revenue is explained by R&D expenditures?

A) B) C) D)

46.6% 9.28% 94.4% 68.6%

352)

Based on these regression results from Lab 5.2 Excel, Evaluating the Relationship Between Sales and R&D Expenditures: Testing for a Nonlinear Relationship, how can the relationship between sales and R&D be best explained?

A) B) C) D)

R&D Expenditures are positively associated with sales.

R&D Expenditures are positively associated with sales at an increasing rate.

R&D Expenditures are positively associated with sales at a decreasing rate.

R&D Expenditures are negatively associated with sales.

353)

Based on these time series analysis results from Lab 5.3 Excel, Forecasting Product Demand using Time Series Analysis, what is the maximum amount of product demand that can be expected in 2026-12-01?

A) B) C) D)

308.99 292.45 303.10 325.53

354)

Based on these time series analysis results from Lab 5.4 Tableau, Forecasting Product Demand, what is the maximum amount of product demand that can be expected in March 2027?

A) B) C) D)

137.91 146.41 154.90 147.68

355)

Based on these time series analysis results from Lab 5.5 Power BI, Forecasting Product Demand, estimate the amount of product demand in the final month forecasted.

A) B) C) D)

300 315 275 350

356)

Based on these regression results from Lab 5.6 Excel: Forecasting Product Demand Using Regression, which independent variables are significantly related to forecast demand?

A) B) C) D)

GDP, Weather, and Holiday GDP and Weather Weather and Holiday Forecast Demand, GDP, Weather, and Holiday

357)

Based on these net present value calculations in Lab 5.7 Excel: Assessing the Returns to Education: To MBA or Not to MBA, at which age does the higher payoff begin for getting an MBA (as compared to not getting an MBA)?

A) B) C) D)

Age 25 Age 26 Age 27 Age 28

358)

Based on this scenario analysis in Lab 5.8 Excel: Applying Scenario Analysis: Trade War, what is the probability that domestic demand decreases income by 5% and there is a moderate trade war?

A) B) C) D)

−200,000 10% −100,000 5%

ESSAY. Write your answer in the space provided or on a separate sheet of paper.

359) Why are descriptive and diagnostic business analytics more deterministic than probabilistic? Why is that difference important to highlight when performing business analytics?

360)

Why is a potential borrower’s credit history an important component of a bank’s determination whether to extend an auto loan?

361)

Why is establishing the base rate of bankruptcy important in predicting whether a company might go bankrupt?

362)

How is prescriptive analytics different from descriptive and diagnostic analytics? How do prescriptive analytics help a decision maker make an important decision?

363)

A firm is attempting to forecast product demand over the next five years for its major product, using the results of the past five years. Give examples of descriptive, diagnostic, predictive, and prescriptive analytics to help the firm make a decision on how much product to manufacture.

Answer Key Test name: chapter 5 1) TRUE 2) FALSE 3) TRUE 4) TRUE 5) FALSE 6) TRUE 7) TRUE 8) FALSE 9) TRUE 10) TRUE 11) C 12) D 13) C 14) C 15) B 16) B 17) A 18) A 19) A 20) A 21) A 22) C 23) A 24) A 25) A 26) B 27) A 28) C 29) B 30) C 31) B 32) D 33) B 34) A 35) D 36) A 37) C

38) D 39) C 40) A 41) C 42) B 43) B 44) B 45) B 46) D 47) C 48) B 49) A 50) B 51) D 52) C 53) A 54) A 55) D 56) D 57) Essay

Descriptive and diagnostic analytics report more factual information, and events and processes that have already occurred. In contrast, predictive and prescriptive analytics forecast future events that have much less certainty. This is important when making conclusions from performing various analytics types.

58) Essay

Understanding how well potential borrowers used credit and paid back loans are usually important determinants in predicting the potential borrower's ability in paying back future loans.

59) Essay

The base rate of an event happening is useful in understanding how often an event is expected to happen in future. If there is some persistence from the past to the future, you would expect the base rate would be a good place to start in determining how often firms go bankrupt (or are expected to go bankrupt).

60) Essay

By definition, descriptive and diagnostic analytics are deterministic and have already happened.

In contrast, prescriptive analytics work to optimize a company’s decisions based on what they expect will happen when there are constraints or changing conditions.

61) Essay

Descriptive analytics: How much product has the company sold or produced the past five years?

Diagnostic analytics: How well did the company predict last sales? Was it above or below what it expected to produce?

Predictive analytics: What is the expected demand for the company’s products over the next quarters and years?

Prescriptive analytics: Based on this expected demand, how much should the company produce over the next quarters and years to have enough product on hand to meet customer needs, without overproducing too much?

Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.

364) Charts and diagrams are different types of graphs. ⊚ true ⊚ false 365)

When there are many categories, a bar chart is a more effective visualization than a pie chart. ⊚ true ⊚ false

366)

You should generally avoid using a pie chart if there are more than five data categories. ⊚ true ⊚ false

367)

A tree map is an effective data visualization for representing precise numbers and proportions. ⊚ true ⊚ false

368)

Line charts should always be sorted chronologically. ⊚ true ⊚ false

369)

Bar charts should be sorted logically. ⊚ true ⊚ false

370)

A histogram is an appropriate chart for a visualization showing how many of each type of product was sold during the month of July. ⊚ true ⊚ false

371)

The gaps in a histogram represent the absence of data in a particular bin. ⊚ true ⊚ false

372)

Confirmatory analytics should tell a story. ⊚ true ⊚ false

373)

A dashboard with too many visualizations and key performance measures may impair decision making. ⊚ true ⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

374) What is the presentation of data or information in easy-to-read pictorial or graphic formats with minimal text?

A) Data visualization or informatics B) Infographics C) Data visualization or infographics D) Informatics 375)

376)

What is the preferred sorting order for a data visualization?

A) Alphabetized from A to Z B) Numerically in ascending order C) Numerically in descending order D) It depends on the type of data you are working with.

The type of flavour of ice cream that people prefer is an example of which of the following terms?

A) Nominal data B) Numerical data C) Ordinal data D) Ratio data

377)

A customer satisfaction survey asks customers to answer the question: How satisfied are you with the company’s customer service? Customers are to select one of the following five choices.

1. Very Unsatisfied 2. Unsatisfied 3. Neutral 4. Satisfied 5. Very Satisfied This is an example of which type of data?

A) Nominal data B) Numerical data C) Ordinal data D) Ratio data

378)

A human resource survey asks employees to answer the question: How long is your commute from home to work? Employees are to select one of the following five choices.

0–2.0 miles 2.1–5.0 miles 5.1–10.0 miles 10.1–20 miles More than 20 miles This is an example of which type of data?

A) Nominal data B) Numerical data C) Ordinal data D) Ratio data

379)

380)

The net income of a company is an example of which type of data?

A) Nominal data B) Numerical data C) Ordinal data D) Categorical data

A________ is the set of raw data that a chart visually represents. An example would be annual net income for the last ten years.

A) data point B) data series C) tick marks D) scale

381)

What are the increments of the scale that are listed on the vertical axis?

A) Data points B) Data series C) Tick marks D) Categories

382)

Which sort order would make the following bar chart the easiest to interpret?

A) B) C) D)

Company name because it is categorical.

Total sales revenue to clearly understand the order.

Date of year end to add context.

No sorting is necessary. The bar chart is easy to interpret as presented.

383)

Confirmatory business analytics includes: A) diagnostic, predictive, and prescriptive analytics.

B) diagnostic and predictive analytics.

C) diagnostic and prescriptive analytics.

D) predictive and prescriptive analytics.

384)

Exploratory business analytics includes: A) descriptive analytics and predictive analytics.

B) diagnostic analytics and predictive analytics.

C) descriptive and diagnostic analytics.

D) descriptive, diagnostic, and predictive analytics.

385)

Which type of chart represents the proportion of each category as it corresponds to the whole data set?

A) Scatterplot B) Line chart C) Pie chart D) Box plot

386)

Identify the data visualization chart type.

A) B) C) D) 387)

Bar chart Box plot Heat map Stacked bar chart

Which product has the highest percentage of sales revenue for the period?

A) B) C) D) E)

Product A Product B Product C Product D Product E

388)

The following chart presents the percentage of sales revenue generated by five different products for the current period. The company only sells these five items. What is the denominator when calculating the percentages?<p style="margin-top:20px;">

A) B) C) D) 389)

390)

Total Sales Revenue for the period Sales Revenue for Product B Net Income for the period Average Sales Revenue for the period

Which chart(s) can be used for visualizing data in geographical areas?

A) Tree map B) Heat map C) A filled map and a symbol map D) A tree map, heat map, filled map, and a symbol map

Which type of chart would be the most effective visualization to quickly identify what words customers use the most when posting content about a company on social media?

A) Box plot B) Heat map C) Tree map D) Word cloud

391)

Identify the chart type for the exhibit below. Hint: An invoice is a receipt given to a customer at the time of sale listing all of the products included in the sale.

A) B) C) D)

Histogram Heat map Tree map Word cloud

392)

Which of the following products did customers buy the most of? Hint: An invoice is a receipt given to a customer at the time of sale listing all of the products included in the sale.

A) B) C) D)

MEM-256 PRK-CSE SK2-ADP SKY-BAT

393)

Identify the chart type for the exhibit below.

A) B) C) D)

Histogram Heat map Tree map Word cloud

394)

A company wants to maximize sales. Based on the data visualization, which business segment consistently has the highest sales?

A) B) C) D)

Corporate Consumer Home office East

395)

A company wants to maximize sales. Based on the data visualization, which regions have the highest sales?

A) B) C) D)

Central and East East and West South and West Central and South

396)

Identify the chart type for the exhibit below.

A) B) C) D)

Heat map Tree map Word cloud Filled map

397)

Based on the data visualization, which state had the highest sales revenue?

A) B) C) D) 398)

California New Mexico Texas Washington

Identify the chart type for the exhibit below.

A) B) C) D)

Heat map Tree map Symbol map Word cloud

399)

Based on the visualization, which state has higher sales revenue?

A) B) C) D) 400)

401)

California Florida Texas Washington

For quantitative data, what is the recommended chart for identifying outliers?

A) Box plot (or box-and-whisker plot) B) Line chart C) Scatterplot D) Stacked bar chart

A________ is a set of data points each representing the value of a variable at different points in time.

A) bin B) class interval C) proportion D) time series

402)

A new business, CoolIT, sells items to keep you cool when outside. It has collected a year of daily sales data for its most popular product, the PortaFan, that it wants to analyze.

What type of data is the daily sales?

A) Bins B) Class intervals C) Proportions D) Time series

403)

Identify the chart type for the exhibit below.

A) B) C) D)

Bar chart Line chart Box plot Pie chart

404)

What is being graphed in the chart?

A) B) C) D)

Bins Categories Proportions Time series

405)

Identify the chart type for the exhibit below.

A) B) C) D)

Bar chart Box plot Histogram Time series

406)

What do the bars in a histogram represent?

A) Bins B) Categories C) Dependent variables D) Independent variables

407)

How can a histogram be used?

A) To see the distribution of the dataset B) To compare the number of observations across intervals C) To see the distribution of the dataset and compare the number of observations across intervals D) To count the number of observations in a category

408)

Which of the following charts represent the count of observations in each bin?

A) Bar chart B) Box plot C) Histogram D) Stacked bar chart

409)

Which of the following statements is NOT true?

A) Bar charts can represent a variety of statistics for categorical data, while histograms are used for only numerical data.

B) Bar charts have gaps between bars, while histograms do not (unless data is absent).

C) The vertical axis for both bar charts and histograms can represent a variety of descriptive statistics.

D) Bar charts can represent counts of categorical data, while histograms are used for only numerical data.

410)

What is the X-axis (Days) in the chart shown below?

A) B) C) D)

Bins Categories Quartiles Proportions

411)

Identify the chart type for the exhibit below.

A) B) C) D)

Bar chart Box plot Histogram Time series

412)

What is the mean Sales Price in the chart shown below?

A) B) C) D)

$59.00 $149.00 $624.40 $949.00

413)

What is the median Sales Price in the chart shown below?

A) B) C) D)

$59.00 $149.00 $624.40 $949.00

414)

How many outliers are in the Sales Price chart shown below?

A) B) C) D)

0 2 3 4

415)

What is the 75th percentile in the chart shown below?

A) B) C) D)

$59.00 $149.00 $949.00 $1,799.00

416)

What is the 25th percentile in the chart shown below?

A) B) C) D) 417)

$19.00 $59.00 $149.00 $949.00

Which chart helps identify outliers, assess the range of the plotted variable, the dispersion of variables, and skewness as well as the mean, median, 25th percentile, and 75th percentile?

A) Bar chart B) Box plot C) Histogram D) Heat map

418)

What menu option/functionality in Excel is suitable for the exhibit below?

A) B) C) D) 419)

Regression Hypothesis test Pivot table Word cloud

What are the items in column S called?

A) B) C) D)

Trend lines Tick marks Sparklines Time series

420)

What menu option/functionality in Excel creates a chart allowing data to be sliced, diced, filtered, conditionally formatted, and be modelled with sparklines?

A) Regression B) Hypothesis test C) Pivot table D) Descriptive statistics

421)

What uses statistics to judge the probability of a future event or outcome occurring?

A) Confirmatory analytics B) Exploratory analytics C) Explanatory analytics D) Corroborating analytics

422)

Which of the following types of analysis helps us understand if two variables are related to each other, and if so, to what extent?

A) Correlation B) Descriptive statistics C) Pivot table D) Histogram

423)

If we run a regression where y (bankruptcy) = f(factors potentially predicting bankruptcy), what is the dependent variable?

A) Factors predicting bankruptcy B) Bankruptcy C) There are no dependent variables.

D) Cannot be determined based on the given information.

424)

If we run a regression where y (bankruptcy) = f(factors potentially predicting bankruptcy), what is the independent variable?

A) Factors predicting bankruptcy B) Bankruptcy C) There are no independent variables.

D) Cannot be determined based on the given information.

425)

The correlation coefficient can have a range of________.

A) 0 to 100 B) 0 to 1 C) −100 to 100 D) −1 to 1

426)

How should a correlation coefficient equal to zero be interpreted?

A) The two variables are not related.

B) The three variables are not related.

C) The two variables have a strong relationship.

D) The three variables have a strong relationship.

427)

A correlation analysis was run in Excel to see how advertising expense was related to sales revenue. The output appears below.

Which of the following statements are true?

1. There is a weak relationship between advertising expense and sales revenue.

2. There is a strong relationship between advertising expense and sales revenue.

3. Advertising expense and sales revenue are positively related.

A) I only.

B) II only.

C) Both I and III. D) Both II and III.

428)

A new business, CoolIT, sells items to keep you cool when outside. Its products include coolers, generators, floats, and other water accessories designed to beat the heat. CoolIT has been spending money on innovative advertising in hopes of increasing its sales revenue.

Below is a scatterplot showing advertising expense and sales revenue for the last 36 months.

Based on the chart, what type of correlation do advertising expense and sales revenue have?

A) B) C) D)

A positive correlation A negative correlation No correlation Perfect correlation

429)

Identify the chart type for the exhibit below.

A) B) C) D)

Line chart Time series Box plot Scatterplot

430)

Which of the following graphs would have a correlation coefficient equal to −0.87?

A)

B)

C)

D) 431)

The following sales forecast was generated in Excel. What is line A?

A) B) C) D)

Most likely predicted level of sales revenue Highest predicted level of sales revenue Lowest predicted level of sales revenue Actual sales revenue

432)

The following sales forecast was generated in Excel. What is line B?

A) B) C) D) 433)

Most likely predicted level of sales revenue Highest predicted level of sales revenue Lowest predicted level of sales revenue Actual sales revenue

The following sales forecast was generated in Excel. What is line C?

A) B) C) D)

Most likely predicted level of sales revenue Highest predicted level of sales revenue Lowest predicted level of sales revenue Actual sales revenue

434)

In the visualization, the dashed line is a ________.

A) B) C) D)

forecast line correlation line propensity line trend line

435)

What presents a collection of useful visualizations and tables to check business progress over a period of time or at a particular point in time?

A) An assembly B) A dashboard C) A reserve D) A pasteboard

436)

A human resource dashboard that allows managers to isolate an individual employee or like-aged employees to reveal average length of time with the company for the individual/group/department is said to be________.

A) interpretive B) flexible C) interactive D) static

437)

When creating a dashboard you should________?

A) include as many visualizations as possible to showcase your analytic skills B) include only visualizations that support management’s strategic goals and objectives C) select the beginning and ending points of axes so charts take up as little space as possible D) apply the Golden Rule (treat others as you would like to be treated)

438)

What is a one-page report that includes the statement of the problem, description of the project’s relevance, results, and recommended course(s) of action?

A) Encapsulation B) Executive summary C) Full report D) Synopsis

439)

In Lab 6.1 Excel, Descriptive Analytics: Visualizing Pivot Table Data Using Conditional Formatting and Sparklines, which Excel menu option was used to superimpose the horizontal blue columns of varying length in the Grand Total column?

A) B) C) D)

Home > Conditional Formatting > Color Scales Home > Conditional Formatting > Data Bars Home > Conditional Formatting > Highlight Cells Rules Home > Conditional Formatting > Icon Sets

440)

In Lab 6.2 Tableau, Descriptive Analytics: Analyzing Sales Revenue by Product with a Tree Map, which denominator is used to calculate the percentage of sales revenue for Imperial Stout shown in the tree map?

A) B) C) D)

Total Net Income Total Sales Revenue for Imperial IPA Total Sales Revenue for IPA Total Sales Revenue

441)

In Lab 6.3 Tableau, Descriptive Analytics: Analyzing Sales Revenue by Customer with a Bar Chart and Filters, what Marks card option is used to create the box showing sale date, customer ID, business name, customer state, and total revenue for the customer which displays when hovering over a bar?

A) B) C) D) 442)

Detail Label Size Tooltip

InLab 6.4 Excel, Descriptive Analytics: Creating a Dashboard Using Pivot Tables and Slicers, you added different levels of slicers. Which Excel option did you use to determine which of the pivot tables that a slicer would work on?

A) Assign Macro...

B) Report Connections...

C) Size and Properties...

D) Sort Data Source Order

443)

In Lab 6.5 Tableau, Descriptive Analytics: Creating a Dashboard, you created a dashboard. If you click on Imperial Stout in the Number of Cases Sold visualization all of the other visualizations show the results just for Imperial Stout. What type of dashboard is this?

A) B) C) D)

Inert dashboard Interactive dashboard Interdependent dashboard Static dashboard

ESSAY. Write your answer in the space provided or on a separate sheet of paper.

444) Compare a histogram and a bar chart.

445)

Identify and define appropriate visualizations for qualitative data.

446)

Identify and define appropriate visualizations for quantitative data.

447)

Identify and define appropriate visualizations for time series data.

448)

Compare pie charts, bar charts, and stacked bar charts.

449)

What method(s) would you use to identify outliers? Why?

450)

What is confirmatory analytics? Identify and define visualization methods used in confirmatory analytics.

Answer Key Test name: chapter 6 1) FALSE 2) TRUE 3) TRUE 4) FALSE 5) TRUE 6) TRUE 7) FALSE 8) TRUE 9) TRUE 10) TRUE 11) C 12) D 13) A 14) C 15) C 16) B 17) B 18) C 19) B 20) D 21) C 22) C 23) D 24) B 25) A 26) C 27) D 28) C 29) D 30) B 31) B 32) B 33) D 34) A 35) C 36) A 37) A

38) D 39) D 40) B 41) D 42) C 43) A 44) C 45) C 46) C 47) A 48) B 49) C 50) B 51) B 52) C 53) B 54) B 55) C 56) C 57) C 58) A 59) A 60) B 61) A 62) D 63) A 64) D 65) A 66) D 67) B 68) B 69) A 70) C 71) D 72) B 73) C 74) D 75) B 76) B 77) D

78) D 79) B 80) B 81) Essay

A histogram and a bar chart look similar as they both have bars. However, bars in a bar chart represent categories, while bars of a histogram represent bins. Bar charts have gaps between the bars, while histograms do not (unless data is missing). In a bar chart, the Y-axis can be associated with a variety of descriptive statistics (average, sum, and count, for example), but the vertical axis in a histogram is always associated with the count of observations in each particular bin.

82) Essay

Qualitative data typically uses proportions to present/compare data. The following charts are appropriate for qualitative/categorical data: Pie charts, which are circular graphs in which each slice represents the category’s proportion of the whole Bar charts, which are data visualizations that show categorical data using vertical/horizontal bars with varying heights/lengths proportional to the values they represent Stacked bar charts, which are bar charts with the bars subdivided into different categories Tree maps: A tree map utilizes size and color to show the proportional size of values using physical space. This type of visualization works well when there are many categories that need to be visualized. Tree maps are helpful in revealing patterns and identifying outliers.

Symbol maps: A type of geographic map, a symbol map is useful for expressing categorical data proportions across geographic areas such as states or countries.

Word clouds: If you are working with text data, you can use a word cloud to identify the most commonly used words. The basis of a word cloud is the frequency of each word mentioned in a data set. The higher the frequency (proportion) of a given word, the larger and bolder the font for that word in the word cloud.

Heat maps: A heat map is a graphical representation of categorical data that uses different colors to indicate different values. Different colors, or different shades of the same color, allow users to compare the intensity of a phenomenon.

83) Essay

While qualitative charts (except for the word cloud) can be used to present quantitative data, the following chart types are particularly useful for depicting more complex data. We discuss them in more detail, and provide examples of each.

Box-and-whisker plots and histograms: These charts are useful for visualizing the distribution of a data set and identifying outliers.

Line charts: These charts are well suited for showing data changes or trend lines over time. Line charts are useful for visualizing continuous data.

Scatterplots: A scatterplot is a graph that plots two variables each on its own axis.

Scatterplots are useful for identifying the possible correlation between two variables and for identifying a trend line or line of best fit.

Filled (geographic) maps: A filled geographic map uses shading, tinting, or patterns to display how a value differs across geographic regions, such as states or countries.

84) Essay

A time series data are values taken on by a variable at different points in time: days, months, or years. The best visualization for a time series is a line chart, which shows data changes or trend lines over time. Line charts are useful for visualizing continuous data and is always sorted chronologically.

85) Essay

Pie charts are circular graphs in which each slice represents the category’s proportion of the whole Bar charts are data visualizations that show categorical data using vertical/horizontal bars with varying heights/lengths proportional to the values they represent Stacked bar charts are bar charts with the bars subdivided into different categories Bar charts are typically easier to read than pie charts, especially when there are more than five categories.

86) Essay

A box-and-whisker plot (or box plot) is the best method to assess outliers. It shows the mean, median, percentile, and expected minimum and maximum as well as outliers in the data set.

Instead of just “eyeballing” the data set for outliers, a box plot allows outliers to be identified based on statistics.

Plotting a trend line for the regression linear equation can also help visually identify outliers that are pulling the trend in a drastic direction.

87) Essay

Confirmatory analytics refers to predictive and prescriptive analytics that use statistics to judge the likelihood (probability) of a future event or outcome occurring. Here are several visualization methods used in confirmatory analytics: A scatterplot is a graph that plots two variables each on its own axis. Scatterplots are useful for identifying the possible correlation between two variables and for identifying a trend line or line of best fit. Correlation is a measure that helps us understand if variables are related to each other and if so, to what extent. It helps us understand if two variables change in the same direction, different directions, or not at all.

A trend line helps visualize how well a linear regression model “fits” the actual observations, or data points. A trend shows the general direction in which a variable is moving. Trend lines can also help identify outliers that are pulling the trend in a drastic direction.

A forecasting line chart visualizes potential future outcomes. It shows three predicted/possible scenarios including the forecast (or most likely) as well as the lower confidence bound and upper confidence bound around the forecast.

Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.

451) Marketing helps companies meet customer needs profitably by selecting an appropriate marketing mix, which includes product, price, place, and promotion. ⊚ true ⊚ false 452)

The marketing mix refers to the key choices that a company makes to bring a product/service to market. ⊚ true ⊚ false The question, “What was the average sales revenue from new products during May?”, is an example of diagnostic analytics. ⊚ true ⊚ false

453)

454)

An experience wheel is an example of the marketing mix. ⊚ true ⊚ false

455)

Customer acquisition cost is the average cost of acquiring one customer. ⊚ true ⊚ false

456)

Churn is the percentage of website visitors who enter the company website and immediately leave. ⊚ true ⊚ false

457)

A manager can use an Ishikawa diagram to help identify why one store has higher returns than other stores. ⊚ true ⊚ false

458)

A sales funnel chart is an example of a marketing predictive analytics technique. ⊚ true ⊚ false

Marketing prescriptive analytics answers the question: “How do we optimize our performance based on potential constraints?" ⊚ true ⊚ false

459)

460)

A marketing dashboard is a visual management tool that helps track and monitor KPIs to improve marketing effectiveness. ⊚ true ⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

461) Assume that a company, UGrowIt, wants to introduce a new service helping people grow vegetables. The service is targeted at people who are new to growing vegetables or have not been successful at growing vegetables in the past. UGrowIt will travel to people’s gardens and provide gardening advice on how to get started, eliminate pests, or troubleshoot other gardening problems. The company plans to offer the service at a price that is affordable for most people. UGrowIt also offers a lower priced option of a ZOOM that includes a video inspection of the garden. A local nursery and the garden center at a hardware store are allowing UGrowIt to set up booths to sell the service to new customers. In addition, UGrowIt has a website ready to go for online sales. Which of the “four Ps” of the traditional marketing mix still needs to be determined by UGrowIt? A) Promotion B) Place C) Price D) Product 462)

Marketing encompasses which of the following tasks?

A) Developing a new product B) Creating advertisements and promotions to create a demand for a product C) Selling a product to a customer D) Developing a product, creating promotions to create demand for the product, and selling the product to a customer

463)

What do we collectively call the introduction, growth, maturity, and decline of a product?

A) Marketing mix B) Product experience cycle C) Product life cycle D) Product mix

464)

In addition to the traditional 4 Ps of the marketing mix, new Ps are being added. Which of the additional Ps refers to the flow of activities that take place when the business interacts with a customer?

A) People B) Physical evidence C) Planning D) Process

465)

Assume that a company, UGrowIt, wants to introduce a new service helping people grow vegetables. The service is targeted at people who are new to growing vegetables or have not been successful at growing vegetables in the past. UGrowIt will travel to people’s gardens and provide gardening advice on how to get started, eliminate pests, or troubleshoot other gardening problems. The company plans to offer the service at a price that is affordable for most people. UGrowIt also offers a lower priced option of a ZOOM that includes a video inspection of the garden. A local nursery and the garden center at a hardware store are allowing UGrowIt to set up booths to sell the service to new customers. UGrowIt has created pamphlets to hand out to potential customers that introduce the service, provide contact information, and offer two pieces of gardening advice. Which of the marketing Ps is a pamphlet?

A) Product B) Physical evidence C) Planning D) Process

466)

Assume that a company, UGrowIt, wants to introduce a new service helping people grow vegetables. The service is targeted at people who are new to growing vegetables or have not been successful at growing vegetables in the past. UGrowIt will travel to people’s gardens and provide gardening advice on how to get started, eliminate pests, or troubleshoot other gardening problems. The company plans to offer the service at a price that is affordable for most people. UGrowIt also offers a lower priced option of a ZOOM that includes a video inspection of the garden. A local nursery and the garden center at a hardware store are allowing UGrowIt to set up booths to sell the service to new customers. UGrowIt outlined its marketing steps to get new customers as: identify potential customer, talk to customer to evaluate interest in UGrowIt’s services, discuss pricing, follow-up as necessary, and sign customer up for desired services. Which of the marketing Ps includes these steps?

A) Promotion B) People C) Planning D) Process Which type of business analytics answers the question: “How and why did units sold change by customer cohort when we raised the price of a product?”

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

467)

Which type of business analytics answers the question: “How many units were sold in the fourth quarter?”

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

468)

Which type of business analytics answers the question: “What is the estimated sales revenue for a given level of advertising expenditures?”

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

469)

Which type of business analytics answers the question: “What is the optimal level of advertising expenditures to maximize sales revenue?”

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

470)

Which type of business analytics answers the question: “Given raw materials constraints, which product should we produce the most of to maximize profitability?”

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

471)

472)

What term refers to the processes and technologies that enable marketers to evaluate the success of their marketing initiatives by measuring performance using important business metrics?

A) Marketing analytics B) Marketing mix C) Marketing channels D) Marketing cohorts

473)

Wholesalers, online, bricks-and-mortar retail stores, and in-home are all examples of ________?

A) Marketing analytics B) Marketing promotions C) Marketing channels D) Marketing cohorts

474)

Makayla just got a job with UGrowIt, a company that helps people grow vegetables. The job requires gathering data from similar companies and the economy, and then using software to analyze the data using statistical techniques to help set UGrowIt’s prices and forecast sales revenue. What type of job did Makayla accept?

A) Brand manager B) Creative art director C) Director of marketing strategy D) Marketing research analyst

475)

Which system would be used to track sales and service issues as well as identify potential sales opportunities by customer?

A) Human Resource Management System B) Customer Relationship Management System C) Supply Chain System D) Financial Reporting System

476)

UGrowIt, a company that helps people grow vegetables, sends coupons to current and potential customers via email. UGrowIt has a system that helps the company tailor the coupons to a customer based on the customer’s response to prior coupons. What type of system would help UGrowIt customize coupons for customers?

A) Human Resource Management System B) Customer Relationship Management System C) Supply Chain System D) Financial Reporting System

477)

A manager uses a system to send emails at the precise time to a group of customers that are more likely to open emails at 8 p.m. on Tuesdays. What type of system is the manager using?

A) Human Resource Management System B) Customer Relationship Management System C) Supply Chain System D) Financial Reporting System

478)

UGrowIt, a company that helps people grow vegetables, is debating over the best design for its website. It has identified two different designs. The goal is to determine: which website design generates the highest level of sales revenue? To answer that question, UGrowIt should use ________.

A) A/B testing B) its customer relationship management system C) its ERP/ES system D) an experience wheel

479)

UGrowIt, a company that helps people grow vegetables, has been conducting A/B testing for its website. What is the goal of A/B testing?

A) Maximizing the conversion rate B) Maximizing the time customers spend on the website C) Minimizing customer churn D) Minimizing the number of webpages viewed by a customer

480)

UGrowIt, a company that helps people grow vegetables, has been conducting A/B testing for its website. What can be used to analyze the results of A/B testing?

A) An experience wheel B) Social media analytics C) Web analytics D) Year-over-year growth analytics

481)

ROOMBA’s iRobot can automatically vacuum a customer’s floors. The iRobot is also connected to the internet sending information about the customer’s house size and floorplan to the company. The iRobot is an example of a(n)________.

A) experience wheel B) customer journey C) IOT D) search engine optimization

482)

In the UK, customers respond more positively to ads that evoke emotion and show how the product will improve their daily life. In Germany, customers respond to facts about why they should believe in the product. These differences are examples of: A) how culture can impact marketing.

B) how language can impact marketing.

C) how social media can impact marketing.

D) how weather (rainy versus cold) can impact marketing.

483)

Makayla just got a job with UGrowIt, a company that helps people grow vegetables. She has been asked to find surveys about how consumers feel about growing their own vegetables at home. To obtain data, which of the following sources would be the most appropriate?

A) Census B) LexisNexis C) Pew Research D) The World Factbook

484)

Carlotta just started a job for a bank. They want her to identify potential customers with a solid history of paying debt on time. To obtain data, which of the following sources would be the most appropriate?

A) Equifax, Experian, or TransUnion B) LexisNexis C) Pew Research D) Statista

485)

Makayla just got a job with UGrowIt, a company that helps people grow vegetables. She has been asked to find data about the industry, so she can benchmark UGrowIt’s performance with similar companies. To obtain data, which of the following sources would be the most appropriate?

A) Census B) LexisNexis C) Pew Research D) Statista

486)

Below is a series of steps outlining the process that a customer uses to purchase a new car from a dealership. What is the best term to describe this process?

A) B) C) D)

Conversion rate Customer journey Marketing mix OLAP cube

487)

Below is a series of steps outlining the process that a customer uses to purchase a new car from a dealership called Cars4U. What can Cars4U use to help determine which step could be improved to increase sales revenue?

A) B) C) D)

Conversion rate analytics Customer journey analytics Marketing mix analytics Experience wheel analytics

488)

Google collects information about its customers with the stated purpose of creating a better personalized experience. Locations, web pages visited, items purchased, and music listened to are just a few of the items it collects as a top global digital advertiser. According to Dr. Douglas C. Schmidt of Vanderbilt University (2018), a stationary Android phone with Chrome open can communicate the phone’s location to Google over 340 times in 24 hours even if the user is not actively using the phone. What type of data collection is this?

A) Covert B) Overt C) Customer approved D) Undisguised

489)

Which of the following statistical techniques is used to determine the frequency of occurrence?

A) Count B) Chart C) Minimum D) Average

490)

Which of the following statistical techniques provides a flexible way to summarize a large amount of data?

A) Count B) Chart C) Minimum D) Pivot table

491)

Which of the following statistical techniques provides a flexible way to compare two numbers?

A) Count B) Subtotal C) Minimum D) Ratios

492)

What menu option in Excel’s Analysis Toolpak automatically creates the mean, median, mode, standard deviation, kurtosis, minimum, and maximum among other measures for variables?

A) Correlation B) Descriptive Statistics C) Pivot Table D) Regression

493)

What are numerical metrics used to gauge company performance?

A) Correlation coefficients B) Descriptive statistics C) Key performance indicators D) Regression coefficients

494)

What are potential customers called?

A) Churns B) Consumers C) IOTs D) Leads

495)

Which of the following are most likely to purchase a product?

A) Customer qualified leads B) Deal qualified leads C) Marketing qualified leads D) Sales qualified leads

496)

What is the lead-to-close ratio using the following information?

Total number of leads received: 100 Total number of leads buying a product: 20 Total number of leads that left items in their online carts: 60 A) 20% B) 40% C) 60% D) 100%

497)

What is the customer lifetime value using the following information?

Sales revenue: 100 Gross profit margin: 0.20 Product cost margin: 0.80 Average number of repeat purchases: 20 Minimum number of repeat purchases: 3 Maximum number of repeat purchases: 100 A) $60 B) $400 C) $1,600 D) $2,000

498)

What is the customer acquisition cost for one customer using the following information?

Number of cars passing by a billboard: 50,000 Number of visitors on a webpage: 100,000 Number of customers acquired: 500 Total marketing investment: $200,000 A) Less than $1 B) $2 C) $4 D) $400

499)

Which of the following KPIs measures the company’s effectiveness in using the resources allocated to marketing efforts?

A) Bounce rate B) Churn C) Return on marketing investment D) Year-over-year growth

500)

What is the year-over-year growth for sales revenue?

Last year’s sales revenue: $500,000 This year’s sales revenue: $750,000 Number of new customers acquired: 50,000 A) 10% B) 15% C) 25% D) 50%

501)

UGrowIt, a company that helps people grow vegetables, wants to answer the following question: Has the company’s sales revenue been growing at a faster pace than the previous year, or has sales revenue growth been slowing down? Which of the following KPIs would be used to answer this question?

A) Bounce rate B) Churn C) Return on marketing investment D) Year-over-year growth

502)

UGrowIt, a company that helps people grow vegetables, wants to answer the following question: Why have sales in zip code 32216 fallen? To answer the question, UGrowIt should engage in which of the following?

A) Customer journey analytics B) Experience wheel analytics C) Root cause analysis D) Year-over-year growth analytics

503)

What is the process of determining what factor, or factors, caused a change?

A) Customer journey analytics B) Experience wheel analytics C) Root cause analysis D) Year-over-year growth analytics

504)

UGrowIt, a company that helps people grow vegetables, wants to answer the following question: Why have sales in zip code 32216 fallen? To answer the question, UGrowIt should do which of the following?

A) Create an Ishikawa diagram.

B) Place suspected factors in a timeline.

C) Summarize the data at different levels.

D) The following are all good techniques: create an Ishikawa diagram, place suspected factors in a timeline, and/or summarize the data at different levels.

505)

The CEO of UGrowIt, a company that helps people grow vegetables, wants an existing online report to show more details about the data. For example, the CEO wants to be able to click on a number, like sales revenue, and have a breakdown by region displayed. Which of the following functionality should be added to the report?

A) Drilling down B) Drilling up C) Drilling through D) It is impossible to add the functionality that the CEO wants.

506)

The CEO of UGrowIt, a company that helps people grow vegetables, wants to see the conversion rate at each step in the sales process. What is the appropriate statistical technique to provide this information?

A) Cluster analysis B) Hypothesis testing C) Sales funnel chart D) Summarization

507)

The CEO of UGrowIt, a company that helps people grow vegetables, wants to develop several different marketing campaigns tailored to different groups of customers’ needs. What is the appropriate statistical technique to identify customer groups?

A) Cluster analysis B) Hypothesis testing C) Sales funnel chart D) Summarization

A correlation coefficient equals −0.25. Which of the following statements describes the (linear) relationship between two variables?

A) A strong positive relationship B) A weak positive relationship C) A strong negative relationship D) A weak negative relationship

508)

509)

Which of the following types of business analytics describes things that possibly might happen?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Descriptive, diagnostic, and predictive analytics all describe things that possibly might happen.

510)

Identify the type of statistical technique depicted in the exhibit.

A) B) C) D)

Cause-and-effect tree Decision tree Fishbone tree Ishikawa diagram

511)

What is the net expected value of starting a loyalty card program after subtracting the start up costs of the program?

A) B) C) D)

$540,000 $940,000 $1,400,000 $1,800,000

512)

What is the net expected value of cutting prices after subtracting the start up costs of the program?

A) B) C) D)

$440,000 $740,000 $1,100,000 $1,400,000

513)

Based on the exhibit below, should the company start a loyalty card program or cut prices to increase sales?

A) B) C) D)

Do nothing Cut prices Launch a loyalty card More information is needed to determine the best course of action.

514)

A business analyst at UGrowIt, a company that helps people grow vegetables, ran a regression finding that sales revenue and advertising expense were significantly related.

Regression determined the following line equation: Sales Revenue = −100 + 30 Advertising Expense What is the predicted Sales Revenue if advertising expense is $100?

A) −$100 B) $200 C) $2,900 D) $3,000

515)

Which type of analytics answers the following question: How should products be distributed between marketing channels to maximize net income?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

516)

Which statistical technique determines what input value is needed to achieve a desired outcome?

A) Goal-seek analysis B) Optimization C) Scenario analysis D) Sensitivity analysis

517)

Which statistical technique examines the effect of changing multiple input variables at the same time on the outcome variable?

A) Goal-seek analysis B) Optimization C) Scenario analysis D) Sensitivity analysis

518)

Which statistical technique examines the effect of changing one input variable on the outcome variable?

A) Goal-seek analysis B) Optimization C) Scenario analysis D) Sensitivity analysis

519)

520)

Which of the following statistical techniques is not a type of what-if analysis?

A) Goal-seek analysis B) Optimization C) Scenario analysis D) Sensitivity analysis

UGrowIt, a company that helps people grow vegetables, wants to answer the following question: What is the company’s sales revenue in three different possible overall economic conditions (growing, stable, and recession)? Which of the following statistical techniques would be appropriate to answer the question?

A) Goal-seek analysis B) Optimization C) Scenario analysis D) Sensitivity analysis

521)

UGrowIt, a company that helps people grow vegetables, wants to decide which marketing campaign to launch. It calculated the net present value of the three campaigns as: −$10,000, $0, and $25,000, respectively. What type of statistical technique was used to calculate the net present values?

A) Cash flow analysis B) Optimization C) Scenario analysis D) Sensitivity analysis

522)

UGrowIt, a company that helps people grow vegetables, needs to answer the question: What happens to net income if the price of gas increases by another $1.00? What is the appropriate statistical technique to answer this question?

A) Cash flow analysis B) Optimization C) Scenario analysis D) Sensitivity analysis

523)

UGrowIt, a company that helps people grow vegetables, needs to answer the question: How do we maximize conversion rate? What is the appropriate statistical technique to answer this question?

A) Cash flow analysis B) Optimization C) Scenario analysis D) Sensitivity analysis

524)

What is a visual management tool that helps track and monitor KPIs to improve marketing effectiveness?

A) Customer journey B) Experience wheel C) Ishikawa diagram D) Marketing dashboard

525)

Which of the following statements about marketing dashboards is true?

A) A marketing department only needs one marketing dashboard.

B) All marketing departments in different companies have the same marketing dashboard.

C) All marketing departments include the same KPIs in marketing dashboards.

D) Each marketing department needs to tailor its dashboard(s) to the specific needs of the company in terms of KPIs and formatting.

526)

In Lab 7.1 Excel, Descriptive Analytics: Analyzing Company Historical Performance, you created the following two charts. Identify the type of chart.

Chart #1

Chart #2

A) B) C) D)

Both charts are bar charts.

Both charts are histograms.

Chart #1 is a bar chart and Chart #2 is a histogram.

Chart #1 is a histogram and Chart #2 is a bar chart.

527)

In Lab 7.2 Excel, Descriptive Analytics: Using a Pivot Table to Analyze Historical Performance by Product Size and Year, you created the following pivot table. In the pivot table, Size is a ________?

A) B) C) D)

column filter row ΣValues

528)

In Lab 7.3, Descriptive Analytics: Using a Histogram to Evaluate Process Time, you created a histogram for process time. What is the formula for process time?

A) Order Date – Ship Date B) Ship Date – Order Date C) (Order Date – Ship Date) ÷ Ship Date D) (Ship Date – Order Date) ÷ Order Date

529)

In Lab 7.4 Excel, Diagnostic Analytics: Analyzing the Steps in the Sales Process with a Sales Funnel Chart, you created a sales funnel chart. Which of the following Excel charts were used to create the sales funnel chart?

A) 3-D 100% Stacked Column Chart B) Waterfall, Funnel, Stock, Surface, or Radar Chart C) Both a 3-D 100% Stacked Column Chart and a Waterfall, Funnel, Stock, Surface, or Radar Chart D) Area Chart

530)

In Lab 7.5 Tableau, Diagnostic Analytics: Examining Pricing Strategy with Cluster Analysis, you created the following cluster analysis of sales price and gross profit. Which cluster has the most profitable pricing strategy?

A) B) C) D)

Cluster 1 Cluster 2 Cluster 3 None of the clusters are profitable.

531)

In Lab 7.6, Predictive Analytics: Predicting Sales Revenue from Advertising Expense, you ran a regression for advertising expense and sales revenue. The output for the regression is shown below. Based on the regression results, what are the dependent and independent variables?

A) Advertising Expense is the dependent variable; Sales Revenue is the independent

variable.

B) Advertising Expense and Intercept are the dependent variables; Sales Revenue is the independent variable.

C) Sales Revenue is the dependent variable; Advertising Expense is the independent variable.

D) Sales Revenue is the dependent variable; Advertising Expense and Intercept are the independent variables.

532)

In Lab 7.7 Excel, Prescriptive Analytics: Calculating Internet CPM Rate Using Goal Seek, you used Excel’s Goal Seek to determine how much should be spent on internet advertising. Specifically, the maximum CPM (cost-per-mille) rate for 8,000,000 views. The output for the Goal Seek is shown below. In the Goal Seek, which cell was the Set cell?

A) B) C) D)

B6 B7 B8 B10

533)

In Lab 7.8 Excel, Prescriptive Analytics: Calculating Product Price Using Goal Seek, you used Excel’s Goal Seek to determine the product price necessary to achieve a desired net income of $12,000 a year. The output for the Goal Seek is shown below. In the Goal Seek, which cell was the “By changing cell”?

A) B) C) D)

B2 B9 N3 N9

ESSAY. Write your answer in the space provided or on a separate sheet of paper.

534) Explain how the new 4 Ps complement the traditional 4 Ps of the marketing mix.

535)

Pick a product or service. Identify the 4 (traditional) Ps of the marketing mix for the product or service as well as the 4 additional new Ps.

536)

Identify an IOT product.

Explain the following: 1. what data could be collected by the company as a customer uses the product, and 2. how the company could use the collected data. Discuss whether the collection and potential use of the information is ethical.

537)

Explain how marketers can leverage the weather to increase product sales.

538)

Identify a company and then identify three KPIs that are (most likely) important to the company. Explain why you picked the KPIs.

539)

Identify a product or service. Construct a sales funnel chart for the product or service.

540)

Use the following information to create a decision tree. Determine which choice is the best for the company.

Question: What is the best method to increase sales revenue?

Options: Loyalty Card Program or New Advertising Campaign Loyalty Card Program cost $200,000 New Advertising Campaign cost $400,000 Loyalty Card High Sales (p = 0.7) $1,000,000 Loyalty Card Low Sales (p = 0.3) $300,000 New Advertising Campaign High Sales (p = 0.6) $2,000,000 New Advertising Campaign Low Sales (p = 0.4) $800,000

541)

UGrowIt wants to introduce a new service helping people grow vegetables. The service is targeted at people who are new to growing vegetables or have not been successful at growing vegetables in the past. UGrowIt will travel to people’s gardens and provide gardening advice on how to get started, eliminate pests, or troubleshoot other gardening problems. The company plans to offer the service at a price that is affordable for most people. UGrowIt also offers a lower priced option of a ZOOM that includes a video inspection of the garden. A local nursery and the garden center at a hardware store are allowing UGrowIt to set up booths to sell the service to new customers. In addition, UGrowIt wants a website for online sales.

To get started, UGrowIT needs answers to the following questions: a. UGrowIT has two possible website designs. Which one generates the most sales? b. UGrowIT has two possible marketing campaigns each with different costs, probabilities, and projected revenues. Which marketing campaign should be selected? c. Should UGrowIT buy a building or rent a space for its headquarters? d. For projected costs, how much sales revenue is needed to make a 10 percent profit? e. How can UGrowIT analyze data from social media to understand how customers feel about the company?

Identify the appropriate statistical technique to answer each of the questions. Explain why you selected the technique.

Answer Key Test name: chapter 7 1) TRUE 2) TRUE 3) FALSE 4) FALSE 5) TRUE 6) FALSE 7) TRUE 8) FALSE 9) TRUE 10) TRUE 11) A 12) D 13) C 14) D 15) B 16) D 17) B 18) A 19) C 20) D 21) D 22) A 23) C 24) D 25) B 26) B 27) B 28) A 29) A 30) C 31) C 32) A 33) C 34) A 35) D 36) B 37) B

38) A 39) A 40) D 41) D 42) B 43) C 44) D 45) D 46) A 47) B 48) D 49) C 50) D 51) D 52) C 53) C 54) D 55) A 56) C 57) A 58) D 59) C 60) B 61) A 62) A 63) C 64) C 65) D 66) A 67) C 68) D 69) B 70) C 71) A 72) D 73) B 74) D 75) D 76) D 77) B

78) B 79) C 80) C 81) C 82) D 83) A 84) Essay

The traditional 4 Ps of the marketing mix are: 1. Product, the good or service that a company offers to customers.

2. Price, the amount that a customer pays for a product.

3. Place, where a company sells a product.

4. Promotion, all of the marketing communication strategies and techniques used to convince customers that they need the product at the specified price.

5. Planning, the alignment between corporate strategy and marketing strategy.

6. Process, the flow of activities that take place when the business interacts with a customer.

7. People, the right employees in terms of skills sets, leadership qualities, and other characteristics.

8. Physical Evidence, the combination of the physical environment in which the product is delivered and any tangible items that may help performance or communication.

85) Essay

Answers vary based on the selected product or service. Below is a sample answer using LEGO. LEGO’s main product is toy bricks (mostly sold in sets now) that are marketed to middle-class and upper-class families. Intricate LEGO toys can be costly to produce, and the company charges a slight premium for its products. However, the company does not set the price too high, because it wants middle-class families to be able to buy LEGO sets. With respect to place, LEGO has production units in the United Kingdom, United States, Singapore, China, and Czech Republic.

LEGO has about 740 retail stores worldwide. Its products are also available in department stores, toy stores, movie theaters, amusement parks, big-box stores, and online at Amazon and other internet retailers. With respect to promotion, LEGO has kept its brand visible by developing additional products, including amusement parks, movies, books, video and board games, clothes, and interactive online content. All of these promotions are carefully designed to promote the buying of LEGO bricks and LEGO sets.

86) Essay

Answers vary based on the IOT selected. Below is a sample answer using Roomba.

Roomba’s iRobot vacuums people’s homes. The iRobot may know your home’s floorplan and size based on the path of the iRobot. It also may know whether you have children or pets based upon the objects it avoids as it vacuums. Roomba could sell this information to other companies.

For example, it could sell information to companies that sell furniture. The furniture companies could use the data to identify customers that have empty rooms and need furniture. The companies could even recommend certain furniture pieces based on the size of your home.

87) Essay

Answers vary. Below is an example using bakeries.

IBM predictive analytics identified that when it rains, customers are more likely to buy cake.

When it is sunny, customers are more likely to buy sandwiches. Marketers can monitor the weather and develop promotions for the appropriate products based upon the upcoming weather.

In addition, the bakeries can alter the proportion of cakes and sandwiches based upon the weather and promotions.

88) Essay

Answers vary. Below is an example using LEGO. LEGO has developed an extensive website at lego.com for shopping and play. Not only can customers buy LEGO products, but customers can also play games and watch videos. To see the website’s effectiveness, LEGO would likely have two sets of KPIs: one for the shopping side, and one for the interactive side. KPIs for the shopping side would include cart abandonment rate, conversion rate, and new visitors. These KPIs would help LEGO see how effective the website is at driving sales. KPIs for the interactive side would include the number of new visitors, the number (and percentage) of repeat users, website traffic, session duration, and origin of the customer. These KPIs would help LEGO see if the content is continuing to keep customers engaged and if new customers are being driven to the website.

89) Essay

Answers vary based on the selected product or service. Below is an example using LEGO.com (Exhibit 7.17).

90) Essay

<p style="margin-bottom:20px; margin-top:20px;">

91) Essay f. A/B testing: hypothesis test to see which website has the higher conversion rate. g. Decision tree: analyzes the outcomes from different decisions. Includes probabilities,

costs, and expected values. h. Cash flow analysis: estimates the net present value of future expenditures for both options. The goal would be to minimize the cost. i. Goal-seek analysis: what input (sales revenue) is needed to achieve a desired output (10 percent profit)? j. Sentiment analysis: determines the emotion behind words.

Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.

542) Accounting is the systematic process of measuring, recording, and communicating the financial information that decision makers need to make decisions. ⊚ true ⊚ false 543)

Social media would generally be considered to be unstructured data. ⊚ true ⊚ false

544)

Managerial accounting systems generally compare budgeted performance to actual performance. ⊚ true ⊚ false

545)

Standard cost is an estimated, or expected, cost of producing a good or service used in management accounting. ⊚ true ⊚ false

546)

A realistic expectation an accountant could hold is that the address of company vendors are not similar to that of the company employees. ⊚ true ⊚ false

547)

Financial statements already contain many of the counts, totals, sums, averages, subtotals, minimums, and maximums that are needed as part of accounting diagnostic analytics. ⊚ true ⊚ false

548)

Optimizing product mix to maximize profit is most closely associated with predictive analytics. ⊚ true ⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

549) Which system would be used to track sales with each customer?

A) Human Resource Management System B) Customer Relationship Management System C) Supply Chain System D) Financial Reporting System 550)

This computer standard allows an easy, automated exchange between a financial statement repository and a financial statement user.

A) XBRL B) EDGAR C) Excel D) Google financials

551)

EDGAR, the SEC repository of SEC forms, stands for ________.

A) Electronic Data Gathering, Analysis Repository system B) Electronic Data Gathering and Archive Retrieval system C) Electronic Data Gathering, Analysis, and Retrieval system D) Electronic Data Gathering, Analysis Resource system

552)

________ includes information on active and inactive vendors and the orders made to date.

A) Customer relationship management system B) Supply chain system C) Human resource system D) Data support system

553)

A graph displaying net sales over the past four years would result from which type of analytics?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

554)

Financial statements are an example of which kind of accounting data?

A) Financial accounting B) Managerial accounting C) Auditing D) Tax accounting

555)

Which form is a required submission to the Securities and Exchange Commission on an annual basis?

A) 10-Q B) 10-K C) 8-K D) Press release

556)

What type of analytics would address the question of whether a bank should extend a loan to a potential borrower?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

557)

Determining why a company’s performance differs from its competitors is an example of what type of analytics?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

558)

What prescriptive analytics technique would be used to determine if a similar decision should be made under varying assumptions?

A) Sensitivity analysis B) Scenario analysis C) Cash flow analysis D) Optimization

559)

Which type of analytics includes time-series analysis techniques?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

560)

A heat map like that used in sensitivity analysis is an example of what type of visualization?

A) Conditional highlighting B) Conditional formatting C) A temperature gauge D) Horizontal analysis

561)

What kind of predictive analytics is generally used to forecast future sales, using its past sales?

A) Time-series analysis B) Classification C) Regression D) Goal-seek analysis

562)

What type of analytics technique evaluates the percentage change in performance from one period to the next?

A) Vertical analysis B) What-if analysis C) Classification D) Horizontal analysis

563)

Which type of analytics would encompass compiling the financial statements?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

564)

Descriptive quantitative analytic measures of financial statements to help evaluate liquidity, solvency, profitability, and efficiency are called: A) vertical analysis.

B) horizontal analysis.

C) ratio analysis.

D) pivot tables.

565)

Which type of analytics will summarize how much the company paid in federal taxes last year?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

566)

Which type of analytics will work to explain why the average amount of taxes paid changed from last year?

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

567)

Determining the best course of action under nine possible tax rate scenarios is an example

of: A) B) C) D) 568)

marginal analysis. scenario analysis. sensitivity analysis. goal-seek analysis.

Which prescriptive analytics technique determines the change in profit associated with the cost or benefit of the next, or marginal unit?

A) Cash-flow analysis B) Marginal analysis C) Sensitivity analysis D) Goal-seek analysis

569)

Changes in consumer preferences, tax laws, interest rates, levels of risk, exchange rates, demand for employees and their expertise, etc. are all conditions a company regularly faces.

Predicting and addressing these changing conditions requires what kind of analytics?

A) Descriptive B) Diagnostic C) Predictive D) Prescriptive

570)

Which prescriptive analytics technique predicts how changing one input will affect an outcome variable?

A) Cash-flow analysis B) Sensitivity analysis C) Marginal analysis D) Goal-seek analysis

571)

This exhibit provides an example of a sensitivity analysis that might be performed by management accountants, evaluating the changing profitability based on two important inputs, the variable cost per unit and the number of units sold.

To perform sensitivity analysis, the analysis varies the variable cost per unit from $4 to $40 (as shown in the columns) and the number of units sold from 50 to 550 (as shown in the rows). The colored columns are the total profits based on the changing input parameters.

When combined with conditional formatting, the estimated profitability can be evaluated.

All other things equal, as variable cost increases, what happens to the estimated profitability?

A) Estimated profitability does not change.

B) Estimated profitability increases.

C) The change in estimated profitability cannot be determined.

D) Estimated profitability decreases.

572)

This exhibit provides an example of a sensitivity analysis that might be performed by management accountants, evaluating the changing profitability based on two important inputs, the level of total fixed costs, and the sales price.

To perform sensitivity analysis, the analysis varies the sales price from $35 to $53 (as shown in the columns) and the fixed costs from $500 to $3,000 (as shown in the rows). The colored columns are the total profits based on the changing input parameters. When combined with conditional formatting, the estimated profitability can be evaluated.

All other things equal, as fixed costs decrease, what happens to the estimated profitability?

A) Estimated profitability does not change.

B) Estimated profitability decreases.

C) The change in estimated profitability cannot be determined.

D) Estimated profitability increases.

573)

This exhibit provides an example of a sensitivity analysis that might be performed by management accountants, evaluating the changing profitability based on two important inputs, the level of total fixed costs, and the sales price.

To perform sensitivity analysis, the analysis varies the sales price from $35 to $53 (as shown in the columns) and the fixed costs from $500 to $3,000 (as shown in the rows). The colored columns are the total profits based on the changing input parameters. When combined with conditional formatting, the estimated profitability can be evaluated.

Which is more impactful on profitability, a $4 increase in sales price per unit or a $500 decrease in total fixed costs?

A) A $4 increase in sales price per unit B) A $500 decrease in total fixed costs

574)

This exhibit provides an example of a sensitivity analysis that might be performed by management accountants, evaluating the changing profitability based on two important inputs, the level of total fixed costs, and the sales price.

To perform sensitivity analysis, the analysis varies the sales price from $35 to $53 (as shown in the columns) and the fixed costs from $500 to $3,000 (as shown in the rows). The colored columns are the total profits based on the changing input parameters. When combined with conditional formatting, the estimated profitability can be evaluated.

All other things equal, a $6 increase in sales price per unit is associated with how big of a change in estimated profitability?

A) An $1,800 increase in estimated profitability B) A $1,200 decrease in estimated profitability C) A $1,200 increase in estimated profitability D) A $600 increase in estimated profitability

575)

This exhibit provides an example of a sensitivity analysis that might be performed by management accountants, evaluating the changing profitability based on two important inputs, the level of total fixed costs, and the sales price.

To perform sensitivity analysis, the analysis varies the sales price from $35 to $53 (as shown in the columns) and the fixed costs from $500 to $3,000 (as shown in the rows). The colored columns are the total profits based on the changing input parameters. When combined with conditional formatting, the estimated profitability can be evaluated.

What would you call this type of visualization?

A) Heat Map B) Rainbow Map C) Conditional Highlighting D) Horizontal Analysis 576)

What is used as the record-keeping system to summarize individual transactions and journal entries to form the basis of financial statements?

A) General ledger B) Transaction entries C) Journal entries D) Income statement

577)

Common-size financial statements are most similar to what type of descriptive analytics?

A) Ratio analysis B) Horizontal analysis C) Vertical analysis D) Pivot tables

578)

Which accountant role evaluates if generally accepted accounting principles (GAAP) is applied correctly?

A) Management accountant B) Tax accountant C) External auditor D) Budget officer

579)

Which diagnostic analytics technique is used by management accounting to assess why amount spent on factory labor is different than the amount expected (or budgeted)?

A) Benford’s Law B) Duplicate transactions C) Variance analysis D) Internal controls testing

580)

Based on Lab 8.1 Excel, Descriptive Analytics: Using Horizontal Analysis to Assess the Financial Performance of Apple and Google. What is the Excel formula to determine the 34.7% percentage change in product sales from 2020 to 2021?

A) =B6÷D6 B) =D6÷B6 C) =D6÷C6 D) =B6÷C6

581)

Based on Lab 8.2 Excel Descriptive Analytics: Applying Vertical Analysis to Assess the Financial Performance of Apple and Google. What is the Excel formula to determine the 5.66% cost of services as a percent of net sales in 2021?

A) =C10÷C7 B) =C10÷C8 C) =C10÷B7 D) =B10÷B7 582)

Based on Lab 8.3 Excel, Diagnostic Analytics: Using Fuzzy Matching to Look for Fraud. In fuzzy matching, if the tolerance for a match is set to 100%, what is the likely consequence for finding potential matches?

A) Too many potential matches B) Only exact matches, no potential matches C) Good mix between exact and potential matches D) Too few potential matches

583)

Based on Lab 8.4 Excel, Diagnostic Analytics: Estimating Fixed and Variable Costs, given the regression results, which variables would be considered to be significant predictors of total costs.

A) B) C) D)

Production and Busy Production Busy Season Cannot be determined

584)

Based on Lab 8.5 Excel, Predictive Analytics: Forecasting Future Performance of IBM, what is the red line above the forecast of IBM sales called?

A) B) C) D)

Lower Confidence Bound Upper Confidence Bound Optimistic Sales Expected Sales

585)

Based on Lab 8.8 Excel, Using Goal-Seek Analysis to Determine the Break-even Point, for January which cell will be changed to get a value of zero net income (or breakeven)?

A) B) C) D)

Cell B9 Cell B3 Cell B7 Cell B8

ESSAY. Write your answer in the space provided or on a separate sheet of paper.

586) Describe the role of a managerial accountant.

587)

What are some questions associated with financial accounting that might be addressed with analytics?

588)

Explain sensitivity analysis. Why is a business analyst interested in the change in the output if the input changes?

589)

What type of analytics evaluates why performance is different from expectations? Why is that an important type of analytics to perform in accounting?

590)

How would goal-seek analysis be used to determine how many units of product should be sold to not lose money (or achieve a net income of exactly zero)?

Answer Key Test name: chapter 8 1) TRUE 2) TRUE 3) TRUE 4) TRUE 5) TRUE 6) FALSE 7) FALSE 8) B 9) A 10) C 11) B 12) A 13) A 14) B 15) C 16) B 17) A 18) C 19) B 20) A 21) D 22) A 23) C 24) A 25) B 26) B 27) B 28) D 29) B 30) D 31) D 32) A 33) A 34) A 35) A 36) C 37) C

38) C 39) B 40) B 41) B 42) B 43) B 44) B 45) Essay

Management accountants help to address performance-related questions by applying the SOAR (or related) model. They provide data-driven insights for management use.

46) Essay

Financial accounting questions addressable by business analytics may include the following: 1) How much inventory does the company have on hand? 2) Is advertising expenditure related to future sales? 3) Why is the percent spent on R&D expenditures different than that spent by competitors? 4) Can we forecast future sales and earnings?

47) Essay

Many estimates and assumptions are made when performing business analytics. As those changes are made in the inputs, the related outputs also change. Analysts are interested in knowing the sensitivity of outputs to those inputs, and for that reason use sensitivity analysis.

48) Essay

By definition, diagnostic analytics uses differences from expectations to identify anomalies and outliers. Investigating why actual performance is different from expectations is an important component of understanding performance. Accounting uses diagnostic analytics to determine why performance is different than expected in all aspects of financial, management, audit, and tax accounting.

49) Essay

By definition, goal-seek analysis determines the amount of input needed to achieve a goal or desired output. In breakeven analysis used in accounting, analysts are trying to determine the amount of sales needed to exactly breakeven (where costs incurred exactly meet revenues earned).

Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.

591) Using three different possible interest rates at a bank to evaluate their possible impact on the outcomes of investments is called sensitivity analysis. ⊚ true ⊚ false 592)

The higher the expected risk, the lower the expected return. ⊚ true ⊚ false

593)

Whether the investment returns arrive in year 1 versus year 2 will not make a difference on the calculation of net present value. ⊚ true ⊚ false

594)

Whether the investment returns arrive in year 1 versus year 2 will make a difference on the calculation of internal rate of return. ⊚ true ⊚ false

595)

Dupont analysis allows an analysis of profit margins, asset turnover and liquidity. ⊚ true ⊚ false

596)

Forecasting the level of future earnings for a company would be considered prescriptive analytics. ⊚ true ⊚ false

597)

To the extent that financial statements provide summaries of past performance, they would be considered descriptive analytics. ⊚ true ⊚ false

598)

This is the correct calculation of the net present value for a new piece of equipment that is expected to cost $200,000 at the time of purchase (Year 0) and returns $150,000 per year for three years, and a cost of capital of 10%.

Year 0 Year 1 Year 2 Year 3

Present value = −$200,000/(1.100) Present value = $150,000/(1.101) Present value = $150,000/(1.102) Present value = $150,000/(1.103)

Sum of present values, or NPV

= −$ 200,000 = $ 136,364 = $ 123,967 = $ 112,697 = $ 173,028

⊚ true ⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

599) The past three years of income statements in the financial statements would be an example of what type of analytics?

A) Predictive analytics B) Diagnostic analytics C) Descriptive analytics D) Prescriptive analytics 600)

According to Altman’s Z, the greater amount of long-term profitability generally leads to __________ risk of bankruptcy.

A) a greater B) a lower C) no change in

601)

If a company has an Altman Z-score of 1.7, the company would be classified in the: A) distress zone, or at significant risk of bankruptcy.

B) gray zone, or at risk of bankruptcy.

C) safe zone, not currently at risk of bankruptcy.

D) green zone, no risk of bankruptcy.

602)

If a company has an Altman Z-score of 3.1, the company would be classified in the: A) distress zone, or at significant risk of bankruptcy.

B) gray zone, or at risk of bankruptcy.

C) safe zone, not currently at risk of bankruptcy.

D) green zone, no risk of bankruptcy.

603)

All of the following are factors used by Altman’s Z in predicting bankruptcy except: A) Working capital/Total assets.

B) Market value of stockholders’ equity/Book value of total debt owed.

C) Retained Earnings/Total assets.

D) Income/Total equity.

604)

What is the term for the interest rate that makes the present value of cash inflows exactly equal to the present value of cash outflows?

A) Net present value B) Internal rate of return C) Capital budget D) Marginal analysis

605)

The decision of which major expenditures and projects a company will invest in is traditionally called: A) cash flow analysis.

B) net present value analysis.

C) internal rate of return.

D) capital budgeting.

606)

What is the internal rate of return for a $33,000 investment (−33,000 at year zero) and cash inflows of $10,000 per year for years 1 through 4?

A) 8.16% B) 21.21% C) 7.18% D) 2.39%

607)

What is the net present value for a $33,000 investment (−33,000 at year zero) and cash inflows of $10,000 per year for years 1 through 4, using a 4% discount rate?

A) $3,298.95 B) −$3,298.95 C) $1,312.66 D) −$1,411.54

608)

What is the Excel formula to compute the internal rate of return for a $33,000 investment and cash inflows of $10,000 per year for years 1 through 4?

A) =IRR(33000,−10000,−10000,−10000,−10000) B) =IRR(−33000,10000,10000,10000,10000) C) =IRR(−10000,−10000,−10000,−10000,−33000) D) =IRR(10000,10000,10000,10000,−33000)

609)

What is the Excel formula to compute the net present value for an initial $53,000 investment and cash inflows of $17,000 per year for years 1 through 4 with a 10% cost of capital?

A) =NPV(0.1,53000,−17000,−17000,−17000,−17000) B) =NPV(0.1, 17000,17000,17000,17000,−53000) C) =NPV(−53000,17000,17000,17000,17000) D) =NPV(0.1, 17000,17000,17000,17000)−53000

610)

The interest rate calculated to the point where the present value of cash inflows is equal to the present value of cash outflows is called __________.

A) net present value B) internal rate of return C) capital budgeting D) marginal analysis

611)

An objective of financial accounting is to help investors and other users in assessing the amounts, A) timing, and risk of future cash flows.

B) totals, and timing of future cash flows.

C) timing, and uncertainty of future cash flows.

D) totals, and risk of future cash flows.

612)

Optimizing transportation logistics due to changing cost of fuel is an example of which type of financial analytics?

A) Descriptive analytics B) Diagnostic analytics C) Prescriptive analytics D) Predictive analytics

613)

One of the three primary branches of finance is: A) wall street.

B) cash management.

C) financial markets and institutions.

D) banking.

614)

Determining how well a company performed relative to its competitors is an example of which type of financial analytics?

A) Descriptive analytics B) Prescriptive analytics C) Diagnostic analytics D) Predictive analytics

615)

XBRL, the source for financial information in a computer-readable format, stands for: A) eXtensible Behavioral Reporting Language.

B) eXtensible Book Reporting Language.

C) eXtensible Business Reporting Language.

D) eXtensible Basic Reporting Language.

616)

The DuPont ratio analysis decomposes which ratio into three component parts?

A) Return on sales B) Return on assets C) Return on equity D) Return on investment

617)

EDGAR, automatically collects, validates, indexes, and serves as a repository for all forms submitted to the Securities and Exchange Commission, stands for: A) Electronic Data Gathering, Analysis, and Repository.

B) Electronic Database for Gathering, Analysis, and Retrieval.

C) Electronic Data Gathering, Analysis, and Retrieval.

D) Electronic Database Gathering, Analysis, and Retrieval.

618)

The ratio of the average return earned in excess of the risk-free rate to a unit of volatility or total risk to assess the relationship between risk and return is known as: A) Volatility Ratio.

B) Return on asset (ROA).

C) Sharpe Ratio.

D) Stock Volatility.

619)

Which of the following has a higher risk and higher return than a corporate bond?

A) Treasury Bond B) Checking account C) Lottery ticket D) Bank Savings

620)

DuPont ratio analysis is an example of what type of analytics technique?

A) Finding anomalies/outliers B) Classification C) Drill-down analysis D) Sensitivity analysis

621)

A visualization using a line graph that shows forecasts relative to past performance is an example of: A) prescriptive analytics.

B) descriptive analytics.

C) diagnostic analytics.

D) predictive analytics.

622)

According to Altman, firms in which zone are not at significant risk of bankruptcy?

A) Distress B) Gray C) Benign D) Green

623)

According to the text, Apple Computer was in the which zone in 1997 according to Altman’s Z? A) Distress B) Gray C) Safe D) Green

624)

Bank savings accounts will have very low risk because they are generally insured by the government. In comparison, however, which investment has a much higher risk and, thus, a much higher expected return?

A) Treasury bills B) Stocks C) Treasury bonds D) Certificates of deposit

625)

Which would have a higher expected profit margin (profit per dollar of sales) than the others?

A) Jewelry B) Shaving cream C) Bananas D) Ice cream

626)

The calculation for return on equity using Dupont Analysis is: A) Profit margin × Asset turnover × Financial leverage.

B) Profit margin × Asset turnover.

C) Asset turnover × Financial leverage.

D) Gross profit margin × Asset turnover × Financial leverage.

627)

Profit margin is computed as follows: A) Net profit (net income) ÷ Sales.

B) Gross profit ÷ Sales.

C) Net profit (net income) ÷ Assets.

D) Gross profit ÷ Assets.

628)

Asset turnover is computed as follows: A) Sales ÷ Assets.

B) Assets ÷ Sales.

C) Net profit (net income) ÷ Assets.

D) Gross profit ÷ Assets.

629)

If the profit margin is 0.1142, asset turnover is 0.5619 and financial leverage is 1.2937, what is the return on asset?

A) 0.0830 B) 0.0642 C) 0.1142 D) 0.7269

630)

If the profit margin is 0.1142, asset turnover is 0.5619 and financial leverage is 1.2937, what is the return on equity?

A) 0.0830 B) 0.0642 C) 0.1142 D) 0.7269

631)

If the profit margin is 0.2158, asset turnover is 0.5389 and financial leverage is 1.2047, what is the return on asset?

A) 0.1401 B) 0.6492 C) 0.1163 D) 0.5389

632)

If the profit margin is 0.2158, asset turnover is 0.5389 and financial leverage is 1.2047, what is the return on equity?

A) 0.1401 B) 0.6492 C) 0.1163 D) 0.5389

633)

The Dupont Analysis measures which of these financial performance categories?

A) Profitability, Liquidity, and Solvency B) Profitability, Activity, and Solvency C) Activity, Liquidity, and Solvency D) Activity, Liquidity, and Profitability

634)

If the profit margin is 0.0891, asset turnover is 0.4732 and financial leverage is 1.1957, what is the return on equity?

A) 0.0504 B) 0.0421 C) 0.5658 D) 0.5623

635)

Of the following measures, the best measure for evaluating firm efficiency in handling and using assets is __________.

A) asset turnover B) return on assets C) profit margin D) return on equity

636)

What is the internal rate of return for a $55,000 investment (−$55,000 in year zero) and cash inflows of $20,000 per year for years 1 through 4?

A) 16.88% B) −16.88% C) 45.4% D) −45.4%

637)

What is the net present value for a $55,000 investment (−$55,000 in year zero) and cash inflows of $20,000 per year for years 1 through 4, using a 4% discount rate?

A) $17,597.90 B) $25,000 C) −$25,000 D) −$17,597.90

638)

Calculate the annual car payment for a car loan of $20,000 at 5% interest rate over five years.

A) $4,619.50 B) $4,000.00 C) $4,520.50 D) $419.32

639)

The Excel formula to compute the annual payment for a car loan of $30,000 at 5% interest rate over five years is: A) =PMT(5,0.05,30000) B) =PMT(30000,0.05,5) C) =PMT(0.05,60,30000) D) =PMT(0.05,5,30000)

640)

Which of the following incorporates the time value of money in its analysis?

A) Payback period B) Return on assets C) Internal rate of return D) Accounting rate of return

641)

In any Excel function that uses an interest rate (e.g. PMT, IRR, NPV), the correct way to enter a monthly rate when the annual interest rate is 4 percent is: A) 0.04.

B) 0.04÷12.

C) 4.

D) 4÷12.

642)

In any Excel function that uses NPER for term, (e.g. PMT functions is =PMT(rate, NPER, FV, PV), the correct way to enter a 30 year term to compute monthly payments is: A) 30.

B) 30×12.

C) (30÷12)÷365.

D) (30÷12)×365.

643)

Based on Lab 9.1 Excel, Descriptive and Diagnostic Analytics: Calculating Returns to Investments Using the Sharpe Ratio, using the results of the descriptive statistics below, which statistic would you use to identify the investment with the highest risk?

A) B) C) D)

Mean Range Standard Deviation Count

644)

Based on Lab 9.1 Excel, Descriptive and Diagnostic Analytics: Calculating Returns to Investments Using the Sharpe Ratio, using the results of the descriptive statistics below, which statistic would you use to identify the investment with the highest average return?

A) B) C) D)

Sum Range Mean Count

645)

Based on Lab 9.2 Excel, Diagnostic Analytics: Applying Dupont Analysis of Financial Performance, using the results of the analysis below, which company consistently has greater asset turnover and financial leverage, Hershey (HSY) or J.M. Smucker (SJM)?

A) J.M. Smucker (SJM) B) Hershey (HSY)

646)

Based on Lab 9.3 Excel, Predictive Analytics: Evaluating Loan Acceptance, using the regression results, identify the independent variable that is positively and statistically related to loan acceptance?

A) B) C) D)

Loan_amnt (amount of the loan) Emp Length (length of current employment) DTI Bucket (debt-to-income ratio) Credit score

647)

Based on Lab 9.4 Excel, Predictive Analytics: Predicting Bankruptcy, using the factors calculated below, what zone would the company in row 2 be with respect to Altman’s Z and bankruptcy prediction?

A) Distress zone B) Safe zone C) Gray zone

648)

Based on Lab 9.5 Excel, Prescriptive Analytics: Evaluating Investments Using NPV, given the results below, which investment should the company make if they use NPV to evaluate expected performance of each investment?

A) B) C) D)

Investment 1 Investment 2 Investment 3 Investment 4

649)

Based on Lab 9.6 Excel, Prescriptive Analytics: Evaluating Investments Using IRR, given the results below, which investment should the company make if they use IRR to evaluate expected performance of each investment?

A) B) C) D)

Investment 1 Investment 2 Investment 3 Investment 4

ESSAY. Write your answer in the space provided or on a separate sheet of paper.

650) A histogram is used to show the classification of bankruptcy prediction into safe, distress and gray zones. Why is that an effective way to visualize the frequency?

651)

Explain a few ways that financial analysts evaluate investments to find the best one for their needs.

652)

Altman’s first factor in predicting bankruptcy (X1) is working capital (cash and other short-term assets) divided by total assets. The greater the liquidity, the greater the possibility of not going bankrupt. Why?

653)

Describe two sources of financial statement data.

654)

How does bankruptcy prediction qualify as predictive analytics?

Answer Key Test name: chapter 9 1) TRUE 2) FALSE 3) FALSE 4) TRUE 5) FALSE 6) FALSE 7) TRUE 8) TRUE 9) C 10) B 11) A 12) C 13) D 14) B 15) D 16) A 17) A 18) B 19) D 20) B 21) C 22) C 23) C 24) C 25) C 26) C 27) C 28) C 29) C 30) C 31) C 32) B 33) B 34) B 35) A 36) A 37) A

38) A 39) B 40) A 41) C 42) A 43) B 44) A 45) A 46) A 47) A 48) A 49) D 50) C 51) B 52) B 53) C 54) C 55) B 56) B 57) B 58) A 59) A 60) Essay

By its derivation, Altman’s Z uses these buckets to show the different levels of bankruptcy risk.

Using a histogram to evaluate the relative numbers of firms in each bucket then is used to visualize and evaluate the bankruptcy probabilities for a sample of firms.

61) Essay

Evaluating both risk and return are important ways to evaluate investments, including the use of net present value and internal rate of return.

62) Essay

The first factor evaluates liquidity, or how much short-term assets there are to pay debts as they come due. The greater the amount of liquidity available, the less likely the firm will be to go bankrupt in the short term.

63) Essay

Examples include the SEC EDGAR website, the company’s investor relations site and Yahoo!

Finance are all sources of financial statement data.

64) Essay

Bankruptcy prediction forecasts whether a company is expected to go bankrupt, consistent with predictive analytics.

Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.

655) Obtaining raw materials is not a component of the supply chain. ⊚ true ⊚ false 656)

Service companies do not have a supply chain. ⊚ true ⊚ false

657)

Analytics should be designed to create data-based, actionable insights to help companies optimize their decision outcomes. ⊚ true ⊚ false

658)

A service-level agreement is a contract between the company and its employees. ⊚ true ⊚ false

659)

Up-to-date weather conditions are helpful to a supply chain. ⊚ true ⊚ false

660)

KPIs are numerical metrics used to gauge company performance. ⊚ true ⊚ false

661)

A root cause is the factor that initiated the chain of events. ⊚ true ⊚ false

662)

Classification uses predefined “like” groups. ⊚ true ⊚ false

663)

As more data becomes available, forecasts usually become more accurate. ⊚ true ⊚ false

664)

Analytics that recommend buying instead of leasing trucks is an example of prescriptive analytics. ⊚ true ⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

665) Which branch of operations is in charge of IOT devices used by employees?

A) Human resources B) IT operations C) Marketing D) Supply chain 666)

Which branch of operations is in charge of training employees for their job?

A) Human resources B) IT operations C) Marketing D) Supply chain

667)

Which branch of operations is in charge of transforming materials into finished goods?

A) Cost accounting B) Human resources C) IT operations D) Supply chain

668)

A________ is the network of entities that are involved in executing the production process, including vendors, transportation companies, warehouses, distribution centers, and retailers.

A) blockchain B) net product line C) production line D) supply chain

Which type of business analytics answers the question: “How and why did the website crash?”

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

669)

Which type of business analytics answers the question: “How many employees worked for the company in the fourth quarter?”

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

670)

Which type of business analytics answers the question: “What will raw materials cost in two years?”

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

671)

Which type of business analytics answers the question: “Which vendor should we purchase raw materials from to meet quality standards and to minimize transportation costs?”

A) Descriptive analytics B) Diagnostic analytics C) Predictive analytics D) Prescriptive analytics

672)

673)

Assume that a company, UGrowIt, helps people grow vegetables. Its services are targeted at people who are new to growing vegetables or have not been successful at growing vegetables in the past. UGrowIt travels to people’s gardens and provides gardening advice on how to get started, eliminate pests, or troubleshoot other gardening problems. UGrowIt is concerned that its employees are overreporting time spent at customers’ homes and goofing off between appointments. What could UGrowIt use to confirm employees’ locations and how much time employees are spending at customers’ homes?

A) Hand-written activity logs B) Keylogging software C) Service-level agreement D) Telemetry

674)

A company has just realized that its employees on the production assembly line are not properly trained. Which of the following systems would help ensure that employees all receive proper training for their jobs?

A) Customer resource management system B) Help desk management system C) Human resource management system D) Supply chain management system

675)

Which of the following is NOT considered a component of IT operations system performance data?

A) Network breakdowns B) Number of data breaches in the month C) System response time D) Time to resolve a problem with the IT help desk

676)

Which of the following is NOT considered a component of IT operations service performance data?

A) Employee satisfaction with the service desk B) ERP response time C) Time to respond to a service desk inquiry D) Time to resolve a problem with the IT help desk

677)

Which of the following items is typically NOT associated with an IT operations servicelevel agreement (SLA)?

A) An agreement between the company and its supply chain partners for on-time delivery of raw materials B) An agreement between the company and the vendor providing outsourced IT services C) Penalties if the agreed-on service levels are not attained by the vendor D) The level of expected service from the vendor

678)

Destination, a (fictitious) company that has huge warehouses of household products and food, used KeepUCool to maintain its air-conditioning systems. KeepUCool monitored the air-conditioning systems at different warehouses using Destination’s IT network. KeepUCool experienced an undetected data breach. The hackers used KeepUCool’s access to Destination’s network to infiltrate the cash registers (which were also on the network). The hackers stole customers names, credit card numbers, debit card numbers, and pins from the cash registers. What may have helped prevent this data breach?

A) A control chart B) A service-level agreement between Destination and KeepUCool C) A supply chain management system D) Telemetry

679)

A(n)________ is the complete depletion of inventory.

A) callout B) stockout C) stockpile D) overstock

680)

Which of the following processes is NOT part of the supply chain?

A) Forecast demand B) Order raw materials C) Ship to customers D) Train assembly line workers

681)

Which is the correct order of the product life cycle phases?

A) Maintenance, Customer Service; Production, Distribution, Research & Development, Design B) Production, Distribution; Research & Development, Design, Maintenance, Customer Service C) Design, Research & Development; Distribution, Production, Customer Service, Maintenance D) Research & Development, Design; Production, Distribution, Maintenance, Customer Service

682)

A(n)________ is a series of steps/phases that all products go through.

A) ERP B) product life cycle C) product oscillation D) product rhythm

683)

If a product is no longer being manufactured by a company, but the company is still supporting the use of the product, which product life cycle phase is a product in?

A) Customer Service B) Research & Design C) Production D) Distribution

684)

________ is the percent of customer orders satisfied by inventory on hand.

A) Completion rate B) Fill rate C) Inhouse rate D) Satisfy rate

685)

________ is governmental data available on the internet.

A) Frank data B) Open data C) Overt data D) Transparency data

686)

Of the statistical techniques listed below, which technique provides the most flexible way to summarize large amounts of data?

A) Averages B) Counts C) Maximums D) Pivot tables

687)

688)

A(n)________ is a visual representation of a variable over time.

A) bar chart B) box plot C) histogram D) time series

________ is the length of time between the company paying its vendors and the company receiving cash from its customers.

A) Accounts payable cycle B) Accounts receivable cycle C) Cash-to-cash cycle D) Vendor-to-customer cycle

689)

In general, which type of cash-to-cash cycle KPI would a company prefer?

A) A higher ratio, which indicates cash is recovered more quickly B) A lower ratio, which indicates cash is recovered more quickly C) A higher ratio, which indicates cash is recovered less quickly D) A lower ratio, which indicates cash is recovered less quickly

690)

What is the formula for the cash-to-cash cycle ratio?

A) Days of Inventory + Days of Accounts Receivable − Days of Accounts Payable B) Days of Inventory + Days of Accounts Receivable + Days of Accounts Payable C) Days of Inventory − Days of Accounts Receivable − Days of Accounts Payable D) Days of Inventory − Days of Accounts Receivable + Days of Accounts Payable

691)

Using the information below, calculate the cash-to-cash ratio.

Days of inventory = 15 Days of accounts receivable = 10 Days of accounts payable = 20 A) 5 days B) 20 days C) 25 days D) 45 days

692)

Which ratio is depicted below?

A) B) C) D)

Asset turnover Cash-to-cash cycle Inventory-to-sales Inventory turnover

693)

What is the definition of Days of Accounts Receivable?

A) The number of days that it takes a customer to pay for an item B) The number of days that it takes for the company to pay the vendor for an item C) The number of days a company holds the item in inventory before it is sold D) The number of days that it takes for the customer to pay the vendor for an item

694)

In general, which of the following KPIs would a company prefer to be longer?

A) Days of Inventory B) Days of Receivable C) Days of Payable D) A company would want all three KPIs (Days of Inventory, Days of Receivable, and Days of Payable) to be long.

695)

A new business, CoolIT, sells items to keep you cool when outside. Its products include coolers, generators, floats, and other water accessories designed to beat the heat. Its Days of Inventory equals 15 and its Days of Payables equals 5. If a company only lets customers pay with cash at the time of purchase, what is the cash-to-cash cycle for CoolIT? A) 0 days B) 10 days C) 20 days D) Unable to determine without more information

696)

A new business, CoolIT, sells items to keep you cool when outside. Its products include coolers, generators, floats, and other water accessories designed to beat the heat. Its Days of Inventory equals 15 and its Days of Payables equals 5. If a company only lets customers pay with cash at the time of purchase, what is the Days of Receivables?

A) 0 days B) 5 days C) 10 days D) 20 days

697)

________ measures the sales revenue generated by the company’s assets.

A) Asset turnover B) Cash-to-cash cycle C) Inventory-to-sales D) Inventory turnover

698)

What is the formula for asset turnover?

A) Sales revenue ÷ Total assets B) Accounts receivable ÷ Total assets C) Cost of goods sold ÷ Total assets D) Inventory ÷ Total assets

699)

A new business, CoolIT, sells items to keep you cool when outside. Its products include coolers, generators, floats, and other water accessories designed to beat the heat. Using the information below, calculate CoolIT’s asset turnover ratio.

Accounts Receivable = 10 M Cost of Goods Sold = 5 M Inventory = 2 M Sales Revenue = 25 M Total Assets = 100 M A) 0.02 B) 0.05 C) 0.10 D) 0.25

700)

In general, which type of asset turnover KPI would a company prefer?

A) A lower ratio, which indicates assets are being used more efficiently B) A higher ratio, which indicates assets are being used less efficiently C) A lower ratio, which indicates assets are being used less efficiently D) A higher ratio, which indicates assets are being used more efficiently

701)

In general, which type of inventory-to-sales KPI would a company prefer?

A) A lower ratio, which indicates more inventory is being stored to fulfill sales B) A higher ratio, which indicates more inventory is being stored to fulfill sales C) A lower ratio, which indicates less inventory is being stored to fulfill sales D) A higher ratio, which indicates less inventory is being stored to fulfill sales

702)

What is the formula for inventory turnover?

A) Sales revenue ÷ Inventory B) Accounts receivable ÷ Inventory C) Cost of goods sold ÷ Inventory D) Inventory ÷ Total assets

703)

Which KPI indicates the number of times that inventory is sold during the year?

A) Asset turnover B) Cash-to-cash cycle C) Inventory-to-sales D) Inventory turnover

704)

In general, which type of inventory turnover KPI would a company prefer?

A) A lower ratio, which indicates reduced storage and handling costs for inventory B) A higher ratio, which indicates reduced storage and handling costs for inventory C) A lower ratio, which indicates higher storage and handling costs for inventory D) A higher ratio, which indicates higher storage and handling costs for inventory

705)

A company is having difficulty with its cash flow. It has determined that its cash-to-cash cycle is much longer than other companies in the industry. How can the company improve its cash-to-cash cycle KPI? A) Increase the Days of Accounts Payable B) Increase the Days of Inventory C) Increase the Days of Accounts Receivable D) Decrease the Days of Accounts Payable

706)

A company has determined that its asset turnover KPI is much lower than other companies in the industry. Which of the following actions would improve its asset turnover KPI? 1. Increase Sales Revenue 2. Decrease Sales Revenue 3. Increase Total Assets 4. Decrease Total Assets A) I and/or IV B) II and/or III C) I and/or III D) II and/or IV

707)

A company has determined that its inventory turnover KPI is much lower than other companies in the industry. Which of the following actions would improve its asset turnover KPI? 1. Increase Cost of Goods Sold 2. Decrease Cost of Goods Sold 3. Increase Inventory 4. Decrease Inventory A) I and/or IV B) II and/or III C) I and/or III D) II and/or IV Which is the appropriate statistical technique to answer the question: “To what extent is on-time delivery rate related to the weather?”

A) Control chart B) Correlation C) Hypothesis testing D) Summarization

708)

Which is the appropriate statistical technique to answer the question: “When and how frequently is system response time greater than 3 seconds?”

A) Control chart B) Correlation C) Hypothesis testing D) Summarization

709)

Which is the appropriate statistical technique to answer the question: “Has the percentage of on-time deliveries to customers significantly changed?”

A) Control chart B) Correlation C) Hypothesis testing D) Summarization

710)

Which is the appropriate statistical technique to answer the question: “Has employee headcount decreased across the company or is it a regional issue?”

A) Control chart B) Correlation C) Hypothesis testing D) Summarization

711)

712)

________ are graphs that plot data about a process in a time-ordered sequence.

A) Control charts B) Bar charts C) Pie charts D) Histograms

713)

Identify the chart shown in the exhibit.

A) B) C) D)

Compliance chart Control chart Limit chart Regulate chart

714)

In the control chart, what does the blue line represent?

A) B) C) D)

Average Lower control limit Median Upper control limit

715)

________ uses techniques and tools for continual process improvement almost to the point of zero defects.

A) Excel's Analysis Toolpak B) Six Sigma C) SLA D) Telemetry

716)

Which of the following techniques is used by Six Sigma to identify and reduce variation?

A) Control chart B) Correlation C) Pivot table D) Summarization

717)

Six Sigma is named for the________.

A) six standard deviations on either side of the mean of a normally distributed variable B) three standard deviations on either side of the mean of a normally distributed variable C) six percentiles on either side of the mean of a normally distributed variable D) three percentiles on either side of the mean of a normally distributed variable

718)

A(n)________ is computer instructions on how to combine data.

A) algorithm B) KPIs C) SLA D) telemetry

Which is the appropriate statistical technique to answer the question: “Which employees are more likely to be good managers?”

A) Classification B) Decision tree C) Forecasting D) Regression

719)

Which is the appropriate statistical technique to answer the question: “With the goal of cost minimization, should we build a plant to make the product or outsource production?”

A) Classification B) Decision tree C) Forecasting D) Regression

720)

Which is the appropriate statistical technique to answer the question: “Which factors matter the most in predicting total transportation cost?”

A) Classification B) Decision tree C) Forecasting D) Regression

721)

722)

A business analyst ran a (linear) regression to understand the relationship between sales revenue and new customers (which require more work) and the total salary expense (in thousands). Regression estimated the equation to be: SalaryExpense = 10 + 0.0005 SalesRevenue + 0.03 NewCustomers Using the following information, calculate the total salary expense.

Projected Sales Revenue: $1,000,000 Projected NewCustomers: 500 A) $15 B) $500 C) $515 D) $525

Which is the appropriate statistical technique to answer the question: “What is expected demand in North America in three years?”

A) Classification B) Decision tree C) Forecasting D) Regression

723)

Which is the appropriate statistical technique to answer the question: “How many units of product need to be sold to make $1,000,000?”

A) Goal-seek analysis B) Optimization C) Scenario analysis D) Sensitivity analysis

724)

Which is the appropriate statistical technique to answer the question: “What is the best location for a new warehouse to minimize costs?”

A) Goal-seek analysis B) Optimization C) Scenario analysis D) Sensitivity analysis

725)

Which is the appropriate statistical technique to answer the question: “What is the best location for a retail store to maximize revenues?”

A) Goal-seek analysis B) Optimization C) Scenario analysis D) Sensitivity analysis

726)

727)

Which is the appropriate statistical technique to answer the question: "What is the total product cost if the labor expenses are $20, $25, or $30 an hour and raw materials costs are $50, $75, or $100?"

A) Goal-seek analysis B) Optimization C) Scenario analysis D) Sensitivity analysis

Which is the appropriate statistical technique to answer the question: “What will be the stockout rate if a specific inventory policy is implemented?”

A) Goal-seek analysis B) Optimization C) Scenario analysis D) Sensitivity analysis

728)

Which is the appropriate statistical technique to answer the question: “Should we rent or buy the company trucks?”

A) Cash flow analysis B) Optimization C) Scenario analysis D) Sensitivity analysis

729)

730)

In Lab 10.1 Excel, Descriptive Analytics / Supply Chain: Calculating KPIs for Walmart and Amazon (or Bed, Bath, and Beyond and Target), we used Excel to calculate Descriptive Statistics for Walmart and Amazon. Based on the results shown below, which company appears to pay its vendors more promptly?

Amazon Cash-to-Cash Cycle Mean Standard Error Median Mode Standard Deviation Sample Variance Kurtosis Skewness Range Minimum Maximum Sum Count Walmart Cash-to-Cash Cycle Mean Standard Error Median Mode Standard Deviation Sample Variance Kurtosis Skewness Range Minimum Maximum Sum Count A) B) C) D)

−52.01 1.57 −51.95 #N/A 7.54 56.80 −0.23 −0.54 27.85 −67.41 −39.56 −1196.32 23.00

9.35 1.13 9.84 #N/A 5.44 29.62 −0.89 −0.19 17.89 0.30 18.19 214.94 23.00

Amazon Walmart Amazon and Walmart both pay the vendors quickly.

It is impossible to tell based on the information provided.

731)

In Lab 10.2 Tableau, Diagnostic Analytics / Human Resources: Analyzing Employee Turnover Using a Bar Chart, we created a bar chart showing employee turnover. What is the denominator for the percentages?

A) B) C) D)

Total number of employees in a bar Total number of employees in a department Total number of employees in the company Total number of employees who quit

732)

Based on the results of the hypothesis test conducted in Lab 10.3 Excel, Diagnostic Analytics / Supply Chain: Analyzing KPI Differences Between Walmart and Amazon, are the inventory turnover ratios different for Walmart and Amazon? Assume that alpha is set at 0.05.

A) B) C) D)

No, the inventory turnover ratios are not different.

Yes, the inventory turnover ratios are different.

No, the inventory turnover ratios are the same.

A conclusion cannot be made based on the presented information.

733)

Based on the control chart created in Lab 10.4 Tableau, Diagnostic Analytics / IT Operations: Analyzing Website Response Time Using a Control Chart, which of the following statements is true from a Six Sigma viewpoint?

A) B) C) D)

Beginning in week 11, the process is out of control.

Beginning in week 50, the process is out of control.

The process is in control the entire time.

The process is not in control the entire time.

734)

Based on the forecast generated in Lab 10.5 Tableau, Predictive Analytics / Supply Chain: Forecasting Unit Demand, does demand show a seasonal pattern? Note the first data point is Quarter 1 of 2021.

A) B) C) D)

No, there is no seasonal pattern in demand.

Yes, demand drops in quarter 1 and increases in quarters 2, 3, and 4.

Yes, demand drops in quarter 4, and increases in quarters 1, 2, and 3.

Yes, demand drops in quarter 2, and increases in quarters 1, 3, and 4.

735)

Based on results generated by Excel’s Solver Add-in in Lab 10.6 Excel, Prescriptive Analytics / Human Resources: Optimizing Employee Assignment, what are the constraints?

A) B) C) D)

None, there are no constraints.

Demand must equal Supply.

The number of Stations.

The number of Employees.

ESSAY. Write your answer in the space provided or on a separate sheet of paper.

736) Define telemetry and identify several ways that an employer can use the technology. Do you believe it is ethical for an employer to use telemetry? Explain your position.

737)

Assume that a company wanted to evaluate the efficiency and effectiveness of its IT service performance data, specifically, its IT help desk. How could the company evaluate the efficiency and effectiveness of the IT help desk? Provide specific recommendations.

738)

Assume that a company wanted to see how employee satisfaction and employee turnover are related. How could the company evaluate the relationship? Provide specific examples.

What relationship would you predict?

739)

What is Six Sigma? How do companies use Six Sigma? What statistical technique is frequently used with Six Sigma? What type of analytics (descriptive, diagnostic, predictive, prescriptive) is the statistical technique?

740)

Assume that a resort located on the beach in south Florida wants to answer the following question: “How many employees are needed during Spring Break (the peak tourist season)”?

The resort has prepared three different estimates of the number of guests: low, most likely, and high. Which statistical technique(s) could help answer this? What type of analytics (descriptive, diagnostic, predictive, prescriptive) is the statistical technique?

741)

Assume that a company has operations in Bolivia, France, India, and the United States.

What KPIs would you recommend in a HR dashboard? How would you recommend showing the KPIs in the dashboard?

Answer Key Test name: chapter 10 1) FALSE 2) FALSE 3) TRUE 4) FALSE 5) TRUE 6) TRUE 7) TRUE 8) TRUE 9) TRUE 10) TRUE 11) B 12) A 13) D 14) D 15) B 16) A 17) C 18) D 19) D 20) C 21) D 22) B 23) A 24) B 25) B 26) D 27) D 28) B 29) A 30) B 31) B 32) D 33) D 34) C 35) B 36) A 37) A

38) B 39) A 40) C 41) B 42) A 43) A 44) A 45) D 46) D 47) C 48) C 49) D 50) B 51) A 52) A 53) A 54) B 55) A 56) C 57) D 58) A 59) B 60) A 61) B 62) A 63) B 64) A 65) A 66) B 67) D 68) D 69) C 70) A 71) B 72) B 73) C 74) D 75) A 76) B 77) C

78) B 79) B 80) C 81) B 82) Essay

Telemetry is technology that collects data about an employee’s location. The data are automatically transmitted to monitoring equipment. The data allow companies to understand where employees spend their time, where they go, what they do, and how long they interact with other employees and customers. Companies can use this information in a variety of ways including whether to fire employees that spend too much of their time on non-work things.

83) Essay

The company could use KPIs to evaluate the efficiency and effectiveness of its IT help desk. The following KPIs could be used to evaluate the IT help desk’s efficiency: open help-desk tickets versus resolved tickets, unsolved tickets per help desk employee, average response time, and average resolution time. The following KPIs could be used to evaluate the IT help desk’s effectiveness: number/percentage of reopened tickets, employee satisfaction with the solution, and time until issue reoccurs. The company could measure the KPIs multiple times (weekly or monthly) and see how the KPIs change over time. In addition, the KPIs may need to be tracked by a help desk employee to monitor the efficiency and effectiveness of individual employees.

84) Essay

The company could use correlation and regression. Correlation measures the linear association, or the relationship, between two variables by examining how the variables change with respect to each other. Variables can have no relationship, a positive relationship, or a negative relationship measured by the correlation coefficient, which has a value between -1 and 1. A negative relationship should be expected as higher employee satisfaction should be associated with lower employee turnover and vice versa.

Once the company finds a linear relationship between variables (using the correlation coefficient), the next step is to use regression analysis, which measures the relationship between one output variable and one or more input variables. If a relationship does exist, then we can use the regression model to help predict a given output variable. Regression determines whether variables move together (or have a relationship), produces an equation of the line, and predicts expected outcomes based on the relationship. Employee turnover would be the dependent variable and employee satisfaction would be the independent variable, as one would expect employee satisfaction to help determine whether an employee stays or leaves the company.

85) Essay

Six Sigma uses techniques and tools for continual process improvement almost to the point of zero defects. Six Sigma utilizes control charts to identify and reduce variation in processes. Six Sigma is named for the three standard deviations on either side of the mean of a normally distributed variable. By comparing data to the UCL and LCL, companies can determine if a process is in control or out of control (i.e., outside the UCL and LCL). In addition to identifying outliers, control charts also identify trends and shifts. If a process is out of control, then the company must determine what should be changed in the process to make the process remain in control. Companies typically start with three standard deviations for the UCL and LCL and then slowly move the UCL and LCL closer together as the process gets more “in control”.

Control charts are a type of diagnostic analytics because the technique helps identify outliers.

86) Essay

What-if analysis would be appropriate to answer this question. Because there are different estimates of the number of customers, scenario analysis would be appropriate. Scenario analysis is a type of prescriptive analytics as it provides recommendations.

87) Essay

Suggested KPIs for a HR dashboard include: headcount, turnover, absenteeism, employee salary and benefit costs, employee satisfaction survey results, new hires, and terminated employees.

The company may choose to show some of the KPIs over time, for example, employee salary and benefit costs to understand the trend in the KPI. The company may also want to break down the KPIs by country to see if the measures differ. This could be accomplished on the dashboard itself or including drill down functionality.

Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.

742) The different types of analytics are typically interrelated and build on each other. ⊚ true ⊚ false 743)

Adaptive/autonomous analytics creates a reiterative SOAR model. ⊚ true ⊚ false

744)

Robocars and robotrucks depend on Big Data to operate. ⊚ true ⊚ false

745)

AI refers to one type of technology. ⊚ true ⊚ false

746)

ML and ANN are forms of AI. ⊚ true ⊚ false

747)

Adaptive/autonomous analytics does not work in the SOAR model. ⊚ true ⊚ false

748)

Adaptive/autonomous analytics is also called cognitive analytics. ⊚ true ⊚ false

749)

All AI systems learn from their environment. ⊚ true ⊚ false

750)

Deep learning is an application of artificial neural networks. ⊚ true ⊚ false

751)

Bitcoin is a type of fintech. ⊚ true ⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

752) Which type of analytics provides hindsight?

A) Descriptive B) Diagnostic C) Predictive D) Prescriptive

753)

Which type of analytics provides insight?

A) Descriptive B) Diagnostic C) Predictive D) Prescriptive

754)

Which type(s) of analytics provide(s) foresight?

A) Descriptive B) Diagnostic C) Predictive D) Predictive and prescriptive

755)

Which type of analytics provides rightsight?

A) Diagnostic B) Predictive C) Prescriptive D) Adaptive/autonomous

756)

Which type of analytics mimics human capabilities, such as judgment and reasoning, creating insights from structured and unstructured data?

A) Diagnostic B) Predictive C) Prescriptive D) Adaptive/autonomous

757)

Which type of analytics consists of algorithms that continuously learn and rapidly modify themselves to optimize performance as new data and outcomes are created?

A) Diagnostic B) Predictive C) Prescriptive D) Adaptive/autonomous

758)

The________ shows that as the difficulty of the analysis increases, the value of actionable intelligence increases.

A) analytics ascendency model B) autonomy model C) business analytics model D) business intelligence model

759)

________ is information gleaned through business analytics to help companies make or execute the correct decisions.

A) Analytics ascendency B) Actionable intelligence C) Cognitive insight D) Hindsight intellect

760)

A company collected product sales data about their products as well as other competitors.

The company then analyzed the data to determine where the company should advertise more and place additional products. As a result of implementing the recommendations, the company’s profits increased. This is an example of________.

A) analytics ascendency B) actionable intelligence C) cognitive insight D) hindsight intellect

761)

________ is a collective term for computer systems that can sense their environment, think, learn, and take action in response to what they’re sensing and their objectives.

A) Artificial intelligence B) Blockchain C) Business analytics D) Robotic process automation

762)

Which type of artificial intelligence is a hardwired system that does not learn, but assists humans with decision-making?

A) Assisted intelligence B) Augmented intelligence C) Automation of existing tasks D) Autonomous intelligence

763)

Heart monitoring equipment that alerts a nurse that a patient’s heart is not beating properly is an example of which type of AI? A) Assisted intelligence B) Augmented intelligence C) Automation of existing tasks D) Autonomous intelligence

764)

Which type of artificial intelligence is an adaptive system that learns and assists humans with decision-making?

A) Assisted intelligence B) Augmented intelligence C) Automation of existing tasks D) Autonomous intelligence

765)

McDonald’s drive through windows making suggestions based on your past orders (at different temperatures and time of day) is an example of________.

A) assisted intelligence B) augmented intelligence C) automation of existing tasks D) autonomous intelligence

766)

Which type of artificial intelligence are systems that do not learn and make decisions without human intervention?

A) Assisted intelligence B) Augmented intelligence C) Automation of existing tasks D) Autonomous intelligence

767)

Using robotic process automation (RPA) to (completely and) automatically process credit card applications is an example of________.

A) assisted intelligence B) augmented intelligence C) automation of existing tasks D) autonomous intelligence

768)

Which type of artificial intelligence are systems that learn and make decisions without human intervention?

A) Assisted intelligence B) Augmented intelligence C) Automation of existing tasks D) Autonomous intelligence

769)

Using chatbots to answer customer questions online about a company’s products is an example of________.

A) assisted intelligence B) augmented intelligence C) automation of existing tasks D) autonomous intelligence

770)

Using chatbots to answer customer questions online about a company’s products is an example of________.

A) general purpose autonomous intelligence B) human-level autonomous intelligence C) narrow autonomous intelligence D) strong autonomous intelligence

771)

AI that has a mind of its own and can accomplish any task that it undertakes is an example of________.

A) applied autonomous intelligence B) narrow autonomous intelligence C) strong autonomous intelligence D) task-specific autonomous intelligence ________ uses statistical techniques that allow the computer to “learn” from large datasets, identifying patterns in the data, and then independently making decisions.

A) Blockchain B) Correlation C) Machine learning D) Regression

772)

773)

________ is the process of analyzing large amounts of data to identify patterns, anomalies, and relationships.

A) Blockchain B) Correlation C) Data mining D) Regression

774)

________ consists of thousands or millions of interconnected processing nodes organized into input, middle, and output layers.

A) Artificial neural networks B) Blockchain C) Correlation D) Regression

775)

Which layer of an artificial neural network transforms the data based on weights and thresholds derived from training data?

A) Bottom B) Middle C) Top D) Bottom, middle, and top

776)

Which layer of an artificial neural network is the input layer?

A) Bottom B) Middle C) Top D) Bottom, middle, and top

777)

Which layer of an artificial neural network is the output layer?

A) Bottom B) Middle C) Top D) Bottom, middle, and top

778)

Which technology is being used to attain general AI? A) Artificial neural network B) Blockchain C) Data mining D) Machine learning

779)

Which technology mimics the human brain?

A) Artificial neural network B) Blockchain C) Data mining D) Machine learning

780)

________ are artificial neural networks with more than three neural network layers.

A) Blockchains B) Data mining C) Deep learning D) Robotic process automations

781)

Deep learning are________ with more than three layers.

A) artificial neural networks B) blockchains C) data mining networks D) robotic process automations

782)

Which of the following terms is the broadest? (Hint: the other terms are techniques to implement) A) Artificial intelligence B) Artificial neural networks C) Deep learning D) Machine learning

783)

________ use(s) AI to help recommend products and services to customers based on historical customer behavior.

A) Blockchain B) Key-logging software C) Recommendation engines D) Telemetry

784)

Every week Spotify provides users with a new customized playlist of 30 songs based on a user’s musical preferences. This is an example of a________.

A) blockchain B) recommendation engine C) robo-advisor D) telemetry

785)

________ use(s) AI to set flexible prices for products or services based on current market demand, customer purchasing patterns, and competitor prices.

A) Blockchain B) Dynamic pricing C) Recommendation engines D) Robo-advisors

786)

Uber uses surge pricing when demand for rides increases. The surge pricing applies a multiple to fares to increase the supply of drivers and decrease the demand for rides. This is an example of (a)________.

A) blockchain B) dynamic pricing C) recommendation engine D) robo-advisor

787)

________ are (small) groups of customers who share specific characteristics over time.

A) Cohorts B) Customer segments C) Customer slices D) Customer strata

788)

Assume that H-E-B., a Texas grocery store, groups customers using the initial date that customers used the company’s home delivery service. H-E-B then analyzes the repurchase rate (for home delivery) over the next two years using a heat map. This is an example of (a)________.

A) cohorts B) customer segments C) customer slices D) customer strata

789)

________ is the process of analyzing events, transactions, or other items that may negatively impact the company.

A) Peril assessment B) Peril defense C) Risk assessment D) Risk defense

790)

Assume that Royal Caribbean International, a cruise company headquartered in Miami, FL, determines the likelihood of a hurricane and its potential impact on the company. This is an example of (a)________.

A) peril assessment B) peril defense C) risk assessment D) risk management

791)

________ suggest customized investment solutions for everyday consumers by dynamically building and optimizing investments to match investor goals, mimicking the customized investment advice that high-net-worth clients get from their broker. This form of AI can also automate the process of buying or selling stocks as well as analyzing company information.

A) Auto-advisers B) Auto-consultants C) Robo-advisers D) Robo-consultants Betterment is an app that helps “people turn everyday investments, no matter how small, into their dreams, no matter how big”. Customers begin by stating how much they want to invest, why they are investing, and preferred timing as well as risk preferences. Technology then recommends a portfolio, buys the investments, and continually monitors and managers the portfolio. This is an example of________.

A) auto-advisers B) auto-consultants C) robo-advisers D) robo-consultants

792)

793)

Which of the following technologies are fintech?

A) Robo-advisers B) Bitcoins C) Bankruptcy prediction D) Bankruptcy prediction, bitcoins, and robo-advisers are all examples of fintech.

794)

A________ is software that simulates the conversation of a real person.

A) babblebot B) chatbot C) gabblebot D) jabberbot

795)

________ is a branch of AI that helps computers understand, interpret, and generate human language.

A) Human language processing B) Natural language processing C) Voice processing D) Words processing

796)

When you call CVS, you are given the options to press 1 for photo processing, press 2 for the pharmacy, and press three for anything else. This is an example of a(n)________.

A) AI-based chatbot B) blockchain C) rules-based chatbot D) robo-adviser

797)

When you interact with Kuki, the world’s best conversational bot, you can ask Kuki questions which get answered. This is an example of a(n)________.

A) AI-based chatbot B) blockchain C) rules-based chatbot D) robo-adviser

798)

________ is a visualization for presenting text analysis.

A) Language cloud B) Text cloud C) Unveiling cloud D) Word cloud

799)

Identify the visualization below.

A) B) C) D)

3D stacked column Heat map Pie chart Word cloud

800)

Which word is used the most frequently?

A) B) C) D)

Identity Security Stealing Theft

801)

________ is an advanced predictive analytics technique that estimates the probability of an event occurring over time.

A) Blockchain B) Monte Carlo simulation C) Survival analysis D) Telemetry What technique is appropriate to answer the question: “How long until a production machine breaks down?”

A) Blockchain B) Monte Carlo simulation C) Survival analysis D) Telemetry

802)

803)

________ uses random sampling in conjunction with statistics to estimate mathematical functions to estimate the probabilities of uncertain events.

A) Blockchain B) Monte Carlo simulation C) Survival analysis D) Telemetry

804)

Estimating project duration when there is uncertainty about how long each phase will take to complete is an example of a(n)________.

A) blockchain B) Monte Carlo simulation C) survival analysis D) telemetry

805)

________ are completely automated production facilities requiring infrequent/little human interaction.

A) Assembly lines B) Cold storage factories C) Lights-out factories D) Manufacturing hubs

806)

Lights-out factories are________.

A) factories that quickly produce products B) factories that produce products that cannot tolerate light C) completely automated production facilities requiring infrequent/little human interaction D) factories that only operate at night

807)

________ is software capable of performing repetitive, routine tasks that do not require insight or understanding—in other words, rule-based tasks.

A) Blockchain B) Robotic process automation (RPA) C) Natural language processing D) Telemetry

808)

A company has software that automatically pull information from yahoo finance website about its stock price as well as other companies in the industry each day at the close of the market. This is an application of________.

A) blockchain B) robotic process automation (RPA) C) natural language processing D) telemetry

809)

________ presents and interlinks multiple dashboards to provide a clear picture of the entire company and thus allows managers to engage with advanced business analytics to effectively plan strategies, resources, and operations.

A) Blockchain B) Cockpit C) Robotic process automation (RPA) D) Telemetry

810)

________ is technology that converts speech to text, analyzes the content, and identifies the speaker’s emotion, stress level, and truthfulness based on audio patterns.

A) Blockchain B) Robotic process automation (RPA) C) Telemetry D) Voice analytics

811)

________ creates a unique digital print for a person based on voice characteristics, including pitch, pace, tone, and vocal cord length, allowing the computer to answer the question “Who is calling?”

A) Blockchain B) Robotic process automation (RPA) C) Telemetry D) Voice biometrics

812)

________ is the process of extracting information from images or videos using AI to train the computer via deep learning to “understand” the visual world.

A) Blockchain B) Computer vision C) Robotic process automation (RPA) D) Telemetry

813)

________ is a distributed ledger based on peer-to-peer networking technology and cryptography that automatically confirms and records transactions, virtually in real time, and is very difficult to change.

A) Blockchain B) Computer vision C) Robotic process automation (RPA) D) Telemetry

814)

How are bitcoin and blockchain related?

A) Bitcoin is an application of blockchain.

B) Blockchain is an application of bitcoin.

C) Bitcoin and blockchain are both applications of robotic process automation.

D) Bitcoin and blockchain are both applications of Monte Carlo simulation.

815)

In a blockchain, a transaction is stored as a________.

A) bitcoin B) block C) miner D) proof-of-work

816)

Companies that base decisions on evidence or information gleaned by analyzing huge amounts of data are called________.

A) data-driven organizations B) lights-out organizations C) smart organizations D) the level of expected service from the vendor

817)

In Lab 11.1 Excel, Advanced Analytics / Marketing: Analyzing Customer Repurchase Rates Using Cohorts, you used Excel to create cohorts (customers who made their first sale transaction in the same month) for Eagle Golf Company to analyze repurchase rates over time. Based on the results shown below, what percent of customers repurchased from Eagle Golf Company during the first month of purchase?

A) B) C) D)

3.18% 10.02% 17.28% 100%

818)

In Lab 11.2 Tableau, Advanced Analytics / Marketing: Analyzing Text Using a Word Cloud, you recreated a word cloud to analyze posts on social media about Outdoor Adventures, a magazine for outdoor enthusiasts, to understand what readers would like to see in upcoming issues. Based on the results below, which adventure would readers like to read about?

A) B) C) D)

Backpacking Fishing Hiking RV

819)

In Lab 11.3 Excel, Excel: Advanced Analytics / Human Resources: Visualizing Survival Analysis, you created a survival curve to analyze employee turnover data for Eat-itFast, a (fictitious) local restaurant. Based on the survival curve below, what proportion of employees are still employed after 11 months?

A) B) C) D)

20% 30% 60% 70%

820)

InLab 11.4 Excel, Advanced Analytics / Supply Chain: Estimating Demand Using Monte Carlo Simulation, you used simulation to calculate the expected total contribution margin for Eagle Golf Company’s MYOB golf balls. How is contribution margin calculated?

A) Net income per unit − total cost per unit B) Net income per unit − variable cost per unit C) Sales price per unit − total cost per unit D) Sales price per unit − variable cost per unit

821)

InLab 11.5, Advanced Analytics: Understanding Blockchain, you learned about blockchain. What is the nonce?

A) A digital resource that a user controls and can reassign to someone else B) A wallet for digital currencies C) The number indicating the order of the blocks D) The (seeded) value needed to obtain a specific hash value

ESSAY. Write your answer in the space provided or on a separate sheet of paper.

822) Describe the Analytics Ascendency Model. What are its stages? What does “sight” mean in each stage? How are the stages related?

823)

What is artificial intelligence (AI)? Identify four categories of AI being used today providing an example for each category.

824)

Describe different techniques currently being used to implement artificial intelligence (AI).

825)

826)

What is fintech? Provide three examples of fintech and describe how they work.

What is blockchain? Describe the components of a blockchain, how new items are added, how items are shared, and what makes a blockchain possess immutability.

827)

Assume that a company has two IT projects in mind. The first project is an internal system to track all of the company’s IT projects, including progress towards completion. The second project is to create a system that will be shared by all supply chain partners and vendors. The goal of the second project is for all participants to share information/transactions between the companies to help keep track of what is going on with the raw materials and goods. Are either one of these projects a good candidate for a blockchain? Identify and use EY’s criteria to assess the appropriateness of a blockchain.

Answer Key Test name: chapter 11 1) TRUE 2) TRUE 3) TRUE 4) FALSE 5) TRUE 6) FALSE 7) TRUE 8) FALSE 9) TRUE 10) TRUE 11) A 12) B 13) D 14) D 15) D 16) D 17) A 18) B 19) B 20) A 21) A 22) A 23) B 24) B 25) C 26) C 27) D 28) D 29) C 30) C 31) C 32) C 33) A 34) B 35) A 36) C 37) A

38) A 39) C 40) A 41) A 42) C 43) B 44) B 45) B 46) A 47) A 48) C 49) C 50) C 51) C 52) D 53) B 54) B 55) C 56) A 57) D 58) D 59) D 60) C 61) C 62) B 63) B 64) C 65) C 66) B 67) B 68) B 69) D 70) D 71) B 72) A 73) A 74) B 75) A 76) B 77) C

78) B 79) D 80) D 81) Essay

“Sight” refers to the different types of business intelligence that different stages, or analytics, provide. The stages of the Analytics Ascendency Model are: Descriptive analytics, which provides hindsight or answers “What happened in the past?” using historical data Diagnostic analytics, which provides insight or answers “Why did it happen in the past?” using historical data Predictive and prescriptive analytics provide foresight by answering “What is likely to happen in the future?” and “What actions should be taken?”, respectively.

Adaptive/autonomous analytics, which provides rightsight by learning the right question to ask your data, at the right time, at the right place, for the right object (or event), in the right context.

The first four types of analytics are interrelated and typically build on each other. In other words, to generate actionable intelligence with prescriptive analytics, you must understand the organizational data, which means that you must be able to understand the results from lower levels of analytics—that is, descriptive, diagnostic, and predictive analytics. Adaptive or autonomous analytics builds on the first four types of analytics, often incorporating data from the first four types. Adaptive or autonomous analytics consists of algorithms that continuously learn and rapidly modify themselves to optimize performance as new data and outcomes are created.

82) Essay

Artificial intelligence, or AI, is “a collective term for computer systems that can sense their environment, think, learn, and take action in response to what they’re sensing and their objectives.”* AI systems accomplish tasks in a way that appears smart or “intelligent” to us as they appear to mimic human decision processes.

There are four types of AI being used today: 1. Assisted intelligence helps humans with decision-making and does not learn. Google’s email sorting into primary, social, and promotion categories is an example.

2. Automation accomplishes tasks independently and does not learn. Automating inventory re-ordering or automatically approving credit are examples.

3. Augmented intelligence helps humans with decision-making and does learn. Netfilx’s movie recommendations is an example.

4. Autonomous intelligence accomplishes tasks independently and does learn. It includes task-specific or weak AI as well as generalized or strong AI. Robocars and robotrucks are examples of task-specific AI. * PwC. 2017: Sizing the Price: What’s the Real Value of AI for Your Business and How Can You Capitalise? Available online at https://www.pwc.com/gx/en/issues/data-andanalytics/publications/artificial-intelligence-study.html. Accessed 11/15/2021.

83) Essay

While early applications of AI focused on solving complex calculations, many AI applications now focus on machine learning. Machine learning (ML) uses statistical techniques that allow the computer to “learn” from data without being explicitly programmed. Essentially, machine learning automates analytical model building by learning from large datasets, identifying patterns in the data, and then independently making decisions.

To achieve human-level, general, or strong AI, scientists are using artificial neural networks (ANNs) to mimic human intelligence. ANNs are one way to implement machine learning. An ANN consists of thousands or millions of interconnected processing nodes. The nodes are organized into different layers. The bottom layer is the input layer. The middle layers transform the data based on weights and thresholds that are derived from training data. The top layer is the output layer.

84) Essay

Fintech stands for financial technology. Fintech is technology used in personal and commercial financial applications. Examples of fintech include: 5. robo-advisers, which suggest customized investment solutions for everyday consumers by dynamically building and optimizing investments to match investor goals. This form of AI can also automate the process of buying or selling stocks and analyzing company information. Thus, robo-advisers mimick the customized investment advice that high-networth clients get from their brokers.

6. Bitcoin, which is a type of electronic cash, digital currency, or cryptocurrency (a virtual currency that operates independent of governments and banks) that can be used in financial transactions. Bitcoin is the most well-known application of a public blockchain.

7. Banking smartphone apps, which allow customers to pay bills, deposit checks, send money to friends, and track expenses.

85) Essay

Blockchain creates a distributed ledger based on peer-to-peer networking technology and cryptography that automatically confirms and records transactions, virtually in real time, and is very difficult to change. Blockchain consists of records or blocks in which records or blocks are stored in a continuous linked chain. Blocks contain data about something. The collection of blocks is sometimes called a digital ledger.

To get access to the blockchain, the blockchain members interact via a computer network connection to share information. All of the blockchain members, who are called peers, have access to the entire blockchain, and each peer stores its own copy of the blockchain, which makes the ledger both “distributed” and decentralized because one party is not in charge. The blockchain can be public so that everyone can join and participate in the network. Or, if privacy and security are concerns, the blockchain can be private, requiring an invitation or permission to join as defined by the network starter.

To add additional blocks, blockchain outsiders, called miners, solve complex math problems to verify that the block is valid in exchange for some form of compensation, such as cryptocurrency or information. This mining process is called proof-of-work. (Some blockchains use a different approach than mining, but with the same verification purpose.) Once the block is verified, it is added to the blockchain using a cryptographic hash. Cryptography uses complex mathematical codes to store and transmit data between entities with the goal of ensuring that the data can be read only by authorized participants. A hash is a function that turns data into a digital fingerprint of data of a standard length. Each block has a unique 256-bit hash that is a combination of letters and numbers that is 64 characters in length. So, if you change any of the data in a block, the hash changes.

In addition to having its own hash, each block contains the hash of the prior block, creating a chain. If information is changed in a block, the hash changes make it not match the original hash, breaking the chain. The use of hashes makes it difficult to change the data because any data changes break the blockchain hashes. This property of blockchains is often called immutability.

86) Essay

It is important to remember that not all transactions belong on a blockchain. EY has identified five questions to ask to determine if a blockchain is the right solution for a business problem.

Those who want to implement a blockchain should answer “Yes” to at least three of these following questions:* 8. Are multiple parties involved?

9. Is trust between parties an issue?

10. Is it critical to have a detailed, tamper-proof transactional record?

11. Is the group securing the ownership or management of a finite source?

12. Does the network benefit from transparency?

The table below evaluates each project based on these criteria.

EY Criteria

1. Are multiple parties involved?

2. Is trust between parties an issue?

3. Is it critical to have a detailed, tamper-proof transactional record?

4. Is the group securing the ownership or management of a finite source?

5. Does the network benefit from transparency?

Project 1: Internal IT Project Tracking System No N/A No

Project 2: Supply Chain System Yes Yes Yes

No

Yes

N/A

Yes

Based on the EY criteria, project 1 is not a candidate for blockchain, rather a database should work just fine. Project 2, however, is a good candidate for a blockchain. * Source: EY. 2017. “Overview of Blockchain for Energy and Commodity Trading”.

Available online at https://inperu.pe/boletin/2018/mayo/EY-overview-of-blockchain-forenergy-and-commodity-training.pdf. Accessed 11/21/2021.