Applied Business Analytics
Exam Solutions
Course Introduction
Applied Business Analytics explores the practical use of quantitative and qualitative data analysis techniques to solve real-world business problems and inform strategic decision-making. The course covers key topics such as data collection, data visualization, predictive modeling, and optimization. Students learn to leverage analytical tools and software to interpret complex data sets, generate actionable insights, and communicate findings effectively to stakeholders. Case studies and hands-on projects provide opportunities to apply analytical concepts to marketing, finance, operations, and other business domains, preparing students to become data-driven leaders in todays dynamic business environment.
Recommended Textbook
Business Analytics Data Analysis and Decision Making 5th Edition by S. Christian Albright
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Chapter 1: Introduction to Data Analysis and Decision Making
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Sample Questions
Q1) Algebraic models,by means of algebraic equations and inequalities,specify a set of relationships in a very precise way.Their main drawback is that they require an ability to work with abstract mathematical symbols.
A)True
B)False
Answer: True
Q2) The @Risk is an Excel add-in that can be used to run replications of a simulation,keep track of outputs,create useful charts,and perform sensitivity analyses.
A)True
B)False
Answer: True
Q3) The decision-making concepts covered in Data Analysis & Decision Making book include which of the following?
A) Optimization techniques
B) Decision analysis with uncertainty
C) Structured sensitivity analysis
D) All of these options
Answer: D
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Chapter
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Sample Questions
Q1) The interquartile range (IQR)represents what percent of the observations?
A) lower 25%
B) middle 50%
C) upper 75%
D) upper 90%
E) 100%
Answer: B
Q2) A distribution with a high kurtosis has almost all of its observations within three standard deviations of the mean.
A)True
B)False
Answer: False
Q3) The core purpose of time series graphs is to detect historical patterns in the data.
A)True
B)False
Answer: True
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Chapter 3: Finding Relationships Among Variables
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Sample Questions
Q1) Correlation can be affected by the measurement scales applied to X and Y variables.
A)True
B)False
Answer: False
Q2) The Excel function that allows you to count using more than one criterion is
A) COUNTIF
B) COUNTIFS
C) SUMPRODUCT
D) VLOOKUP
E) HLOOKUP
Answer: B
Q3) Changing the location of fields in a pivot table is known as
A) slicing
B) dicing
C) sorting
D) pivoting Answer: D
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Page 5
Chapter 4: Probability and Probability Distributions
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Sample Questions
Q1) Conditional probability is the probability that an event will occur,with no other events taken into consideration.
A)True
B)False
Q2) The probabilities shown in a table with two rows, \(A _ { 1 } \text { and } A _ { 2 }\)
And two columns, \(B _ { 1 } \text { and } B _ { 2 }\) ,are as follows: \(P \left( A _ { 1 } \text { and } B _ { 1 } \right) = 10\)
, \(P \left( A _ { 1 } \text { and } B _ { 2 } \right) = .30\)
, \(P \left( A _ { 2 } \text { and } B _ { 1 } \right) = .05\) ,and \(P \left( A _ { 2 } \text { and } B _ { 2 } \right) = .55\)
)Then \(P \left( A _ { 1 } \mid B _ { 1 } \right)\)
,calculated up to two decimals,is
A) .33
B) .35
C) .65
D) .67
Q3) The multiplication rule for two events A and B is: P(A and B)= P(A|B)P(A).
A)True
B)False
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Page 6
Chapter 5: Normal, Binomial, Poisson, and Exponential
Distributions
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Sample Questions
Q1) The Poisson and Exponential distributions are commonly used in which of the following applications
A) Inventory models
B) Financial models
C) Failure analysis models
D) All of these options
Q2) If the mean of an exponential distribution is 2,then the value of the parameter \(\lambda\) Is
A) 4
B) 2
C) 1
D) 0.5
Q3) An exponential distribution with parameter \(\lambda\) = 0.2 has mean and standard deviation both equal to 5.
A)True
B)False
Q4) The number of loan defaults per month at a bank is Poisson distributed.
A)True
B)False
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Chapter 6: Decision Making Under Uncertainty
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Sample Questions
Q1) Bayes' Rule is useful for?
A) Value of Sample Information
B) Value of Perfect Information
C) Sensitivity Analysis
D) All of these options
E) None of these options
Q2) In decision trees,a probability node (a circle)is a time when the decision maker makes a decision.
A)True
B)False
Q3) With regard to decision making,most individuals are __________________.
A) risk averse
B) risk seekers
C) risk maximizers
D) EMV maximizers
E) None of these options
Q4) Decision trees are composed of nodes (circles,squares,and triangles)and branches (lines).
A)True
B)False
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Chapter 7: Sampling and Sampling Distributions
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Sample Questions
Q1) The sampling distribution of the mean will have the same mean as the original population from which the samples were drawn.
A)True
B)False
Q2) There is approximately % chance that any particular \[\bar { X }\] Will be within two standard deviations of the population mean ( \(\mu\) ))
A) 90
B) 95
C) 99
D) 99.7
Q3) A list of all members of the population from which we can choose a sample is called a frame,and the potential sample members are called sampling units.
A)True
B)False
Q4) If the sample size is greater than 30,the Central Limit Theorem (CLT)will always apply.
A)True B)False
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Chapter 8: Confidence Interval Estimation
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Sample Questions
Q1) The confidence interval for the population standard deviation s is centered at the point estimate,the sample standard deviation s.
A)True
B)False
Q2) If two random samples of size 40 each are selected independently from two populations whose variances are 35 and 45,then the standard error of the sampling distribution of the sample mean difference, \(x _ { 1 } - x _ { 2 }\) ,equals 1.4142.
A)True
B)False
Q3) Samples of exam scores for employees before and after a training class would be examples of paired data
A)True
B)False
Q4) The general form of a confidence interval is:
A) Point Estimate = Multiple × Standard Error
B) Point Estimate = Multiple +Standard Error
C) Point Estimate ± Multiple × Standard Error
D) Point Estimate = Multiple ± Standard Error
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Chapter 9: Hypothesis Testing
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Sample Questions
Q1) If a null hypothesis about a population mean \(\mu\) is rejected at the 0.025 level of significance,then it must also be rejected at the 0.01 level.
A)True
B)False
Q2) An alternative hypothesis can have the signs >,<,or . A)True
B)False
Q3) A two-tailed test is one where:
A) results in only one direction can lead to rejection of the null hypothesis
B) negative sample means lead to rejection of the null hypothesis
C) results in either of two directions can lead to rejection of the null hypothesis
D) no results lead to the rejection of the null hypothesis
Q4) Which of the following values is not typically used for \(a\) ?
A) 0.01
B) 0.05
C) 0.10
D) 0.50
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Chapter 10: Regression Analysis: Estimating Relationships
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Sample Questions
Q1) In a nonlinear transformation of data,the Y variable or the X variables may be transformed,but not both.
A)True B)False
Q2) The percentage of variation explained \(R ^ { 2 }\) is the square of the correlation between the observed Y values and the fitted Y values.
A)True B)False
Q3) In a simple linear regression problem,suppose that \(\sum e _ { i } ^ { 2 } = 12.48 \text { and } \sum \left( Y _ { i } - Y \right) ^ { 2 } = 124.8\) .Then the percentage of variation explained \(R ^ { 2 }\) must be 0.90.
A)True B)False
Q4) Regression analysis can be applied equally well to cross-sectional and time series data.
A)True B)False
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Chapter 11: Regression Analysis: Statistical Inference
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Sample Questions
Q1) The ANOVA table splits the total variation into two parts.They are the A) acceptable and unacceptable variation
B) adequate and inadequate variation
C) resolved and unresolved variation
D) explained and unexplained variation
Q2) The residuals are observations of the error variable \(\varepsilon\) .Consequently,the minimized sum of squared deviations is called the sum of squared error,labeled SSE.
A)True
B)False
Q3) A backward procedure is a type of equation building procedure that begins with all potential explanatory variables in the regression equation and deletes them two at a time until further deletion would reduce the percentage of variation explained to a value less than 0.50.
A)True
B)False
Q4) One method of dealing with heteroscedasticity is to try a logarithmic transformation of the data.
A)True
B)False
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Chapter 12: Time Series Analysis and Forecasting
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Sample Questions
Q1) The time series component that reflects a wavelike pattern describing a long-term trend that is generally apparent over a number of years is called cyclical.
A)True
B)False
Q2) If the span of a moving average is large - say,12 months - then few observations go into each average,and extreme values have relatively large effect on the forecasts.
A)True
B)False
Q3) In a multiplicative seasonal model,we multiply a "base" forecast by an appropriate seasonal index.These indexes,one for each season,typically average to 1.
A)True
B)False
Q4) The moving average method can also be referred to as a (n)method.
A) causal
B) smoothing
C) exponential
D) econometric
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Chapter 13: Introduction to Optimization Modeling
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Sample Questions
Q1) Reduced costs indicate how much the objective coefficient of a decision variable that is currently 0 or at its upper bound must change before that the value of that variable changes.
A)True
B)False
Q2) The additivity property of LP models implies that the sum of the contributions from the various activities to a particular constraint equals the total contribution to that constraint.
A)True
B)False
Q3) When using the graphical solution method to solve linear programming problems,the set of points that satisfy all constraints is called the:
A) optimal region
B) feasible region
C) constrained region
D) logical region
Q4) There is often more than one objective in linear programming problems
A)True
B)False
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Chapter 14: Optimization Models
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Sample Questions
Q1) Which of the following statements are false?
A) Solver does not offer a sensitivity report for models with integer constraints
B) Solver's sensitivity report is not suited for questions about multiple input changes
C) Solver's sensitivity report is used primarily for questions about one-at-a time changes to input
D) None of these options
Q2) The binary variables in the fixed cost models correspond to:
A) the number of units or products produced
B) the total profit
C) the amount of labor hours
D) a process for which a fixed cost occurs
Q3) The problem which deals with the direct distribution of products from supply locations to demand locations is called a(n)
A) transportation problem
B) assignment problem
C) network problem
D) transshipment problem
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Chapter 15: Introduction to Simulation Modeling
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Sample Questions
Q1) A correlation matrix must always be symmetric,so that the correlations above the diagonal are a mirror image of those below it.
A)True
B)False
Q2) The triangular distribution is sometimes used in simulation models because it is more flexible and intuitive than the normal distribution.
A)True
B)False
Q3) The deterministic (non-simulation)approach,using best guesses for the uncertain inputs,is:
A) better to use in complicated real world applications.
B) a good estimate of what the answer will be using a simulation approach.
C) generally not the appropriate model.
D) the preferred approach when there is correlation between input variables.
Q4) It is usually not too difficult to predict the shape of the output distribution from the shape(s)of the input distribution(s).
A)True
B)False
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Chapter 16: Simulation Models
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Sample Questions
Q1) Uncertain timing and the events that follow in process modeling can be modeled using IF statements.
A)True
B)False
Q2) A @RISK output range allows us to obtain a summary chart that shows the entire simulated range at once.
A)True
B)False
Q3) Which of the following functions is often required in simulations where we must model a process over multiple time periods and must deal with uncertain timing of events?
A) RISKMIN
B) RISKMAX
C) NPV
D) IF
E) None of these options
Q4) In warranty cost models,the key input random variable is product lifetime.
A)True
B)False
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Chapter 17: Data Mining
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Sample Questions
Q1) Bridget has partitioned data into two subsets.The original file contains 300,000 observations.The subset she is currently working with has 60,000 observations.Which subset is she most likely to be using?
A) The training set
B) The original set
C) The testing set
D) The prediction set
Q2) If the regression coefficient estimate from a logistic regression is positive,the probability of the dependent variable taking on a value of 1:
A) decreases
B) approaches zero
C) increases
D) remains constant
Q3) Which methodology is used to group products that customers purchase together?
A) Market basket analysis
B) Prediction
C) Classification analysis
D) Forecasting
Q4) What does the pivot table indicate about spending habits?
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Chapter 18: Importing Data Into Excel
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Sample Questions
Q1) If you had imported the data using 'fixed width,' how would the output have changed?
Q2) Repetitive tasks are best handled by copying and pasting.
A)True
B)False
Q3) Delimiter characters include:
A) dollar signs and a hard return symbol
B) the word "delimiter"
C) a tab,space,or comma
D) a hard return symbol
Q4) Microsoft Query is used to:
A) delete missing observations from a spreadsheet
B) copy and paste data within a single spreadsheet
C) transfer data from a spreadsheet in the same workbook
D) import data from many database packages
Q5) Real-world datasets usually do not require any cleansing because they do not contain missing data or typographical errors.
A)True
B)False
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Chapter 19: Analysis of Variance and Experimental Design
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Sample Questions
Q1) What does the ANOVA output in the accompanying figure indicate?
Q2) Samples with large within variation have boxplots with:
A) wide boxes and long lines extending from them
B) wide boxes and no lines extending from them
C) short boxes and no lines extending from them
D) short boxes and short lines extending from them
Q3) Priti is wondering whether time of day impacts worker productivity.She randomly chooses 25 workers from each of the three shifts her company runs.The design of this study is
A) even
B) balanced
C) unbalanced
D) observational
Q4) Which p-value from a two-way ANOVA table indicates an effect that is not statistically significant?
A) 0.000
B) 0.011
C) 0.047
D) 0.110
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Chapter 20: Statistical Process Control
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Sample Questions
Q1) Which of the following is not one of Deming's 14 Points?
A) Use Lowest-Tender Contracts.
B) Have Constancy of Purpose.
C) Institute Leadership of People.
D) Break Down Barriers.
Q2) A p chart plots the proportions of items that are conforming.
A)True
B)False
Q3) "Tampering" can actually make a system worse.
A)True
B)False
Q4) Mohammed is monitoring the diameter of bolts being produced on one of his assigned production lines.During this process,he notices one,single measurement that jumped above the upper control limit.He immediately adjusts the alignment on several machines to address the problem.Mohammed has likely committed a(n):
A) type II error
B) average run length error
C) type I error
D) type I and type II error
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