Data Analysis for Business Pre-Test Questions
Course Introduction
Data Analysis for Business introduces students to the fundamental concepts and practical techniques used to analyze business data and drive data-informed decision-making. The course covers the collection, cleaning, and interpretation of data; application of statistical methods; and use of analytical tools such as spreadsheets, visualization software, and basic programming. Students explore real-world business problems, learn to generate actionable insights, and develop skills in presenting findings to stakeholders. Emphasis is placed on critical thinking, ethical considerations, and the strategic value of data in operations, marketing, finance, and management.
Recommended Textbook
Quantitative Methods for Business 12th Edition by David R. Anderson
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2
Chapter 1: Introduction
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Sample Questions
Q1) The relationship d = 5000 F1F1F1S1 F1F1F10 25p describes what happens to demand (d)as price (p)varies.Here,price can vary between $10 and $50.
A)How many units can be sold at the $10 price? How many can be sold at the $50 price?
B)Model the expression for total revenue.
C)Consider prices of $20, $30, and $40. Which price alternative will maximize total revenue? What are the values for demand and revenue at this price?
Answer: A.FOR P = 10,D = 4750
For p = 50,d = 3750
b.TR = p(5000 F1F1F1S1 F1F1F10 25p)
c.For p = 20,TR = $90,000
For p = 30,TR = $127,500
For p = 40,TR = $160,000
Best price is p = 40.Demand = 4000
Q2) The quantitative analysis approach requires
A)the manager's prior experience with a similar problem.
B)a relatively uncomplicated problem.
C)mathematical expressions for the relationships.
Answer: C
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Chapter 2: Introduction to Probability
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Sample Questions
Q1) When assigning subjective probabilities,use experience,intuition,and any available data.
A)True
B)False
Answer: True
Q2) Which of the following is not a proper sample space when all undergraduates at a university are considered?
A)S = {in-state, out-of-state}
B)S = {freshmen, sophomores}
C)S = {age under 21, age 21 or over}
D)S = {a major within business, no business major}
Answer: B
Q3) A joint probability can have a value greater than 1.
A)True
B)False
Answer: False
Q4) Two events that are independent cannot be mutually exclusive.
A)True
B)False
Answer: False
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Chapter 3: Probability Distributions
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Sample Questions
Q1) Scores on an endurance test for cardiac patients are normally distributed with F1F1F1S1 F1F1F10 = 182 and F1F1F1S1 F1F1F10 = 24.
a.What is the probability a patient will score above 190?
b.What percentage of patients score below 170?
c.What score does a patient at the 75th percentile receive?
Answer: a..3707
b..3085
c.198
Q2) A statement that matches the values of a random variable with the probabilities of those values is
A)the expected value.
B)the variation of the random variable.
C)an experiment.
D)a probability distribution.
Answer: D
Q3) Assume that the time required to download a file from the Internet is exponentially distributed with mean equal to 4 minutes.What is the probability that a download will require at least 2 but not more than 4 minutes?
Answer: .23865
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Page 5
Chapter 4: Decision Analysis
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Sample Questions
Q1) A manufacturing company is considering expanding its production capacity to meet a growing demand for its product line of air fresheners.The alternatives are to build a new plant,expand the old plant,or do nothing.The marketing department estimates a 35 percent probability of a market upturn,a 40 percent probability of a stable market,and a 25 percent probability of a market downturn.Georgia Swain,the firm's capital appropriations analyst,estimates the following annual returns for these alternatives: \[\begin{array} { l c c c }
\hline \hline
& \text { Market } & \text { Stable } & \text { Market } \\ & \underline { \text { Upturn } } & \underline { \text { Market } } & \underline { \text { Downturn } } \\
\text { Build new plant } & \$ 690,000 & \$ ( 130,000 ) & \$ ( 150,000 ) \\
\text { Expand old plant } & 490,000 & ( 45,000 ) & ( 65,000 ) \\
\text { Do nothing } & 50,000 & 0 & ( 20,000 ) \\
\hline \hline
\end{array}\]
a. Use a decision tree analysis to analyze these decision alternatives.
b. What should the company do?
c. What returns will accrue to the company if your recommendation is followed?
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Chapter 5: Utility and Game Theory
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Sample Questions
Q1) The purchase of insurance and lottery tickets shows that people make decisions based on
A)expected value.
B)sample information.
C)utility.
D)maximum likelihood.
Q2) Values of utility
A)must be between 0 and 1.
B)must be between 0 and 10.
C)must be nonnegative.
D)must increase as the payoff improves.
Q3) Any 2 X 2 two-person,zero-sum,mixed-strategy game can be solved algebraically.
A)True
B)False
Q4) When the payoffs become extreme,most decision makers are satisfied with the decision that provides the best expected monetary value.
A)True
B)False
Q5) When and why should a utility approach be followed?
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Chapter 6: Times Series Analysis and Forecasting
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Sample Questions
Q1) Time series data can exhibit seasonal patterns of less than one month in duration.
A)True
B)False
Q2) Use a four-period moving average to forecast attendance at baseball games.Historical records show 5346,7812,6513,5783,5982,6519,6283,5577,6712,7345
Q3) All of the following are true about a stationary time series except A)Its statistical properties are independent of time.
B)A plot of the series will always exhibit a horizontal pattern.
C)The process generating the data has a constant mean
D)There is no variability in the time series over time.
Q4) Discuss the effects of using a small smoothing constant value and when it is most appropriate to use.Then,do the same for a large smoothing constant value.
Q5) Exponential smoothing with F1F1F1S1 F1F1F10 = .2 and a moving average with n = 5 put the same weight on the actual value for the current period.
A)True
B)False
Q6) Explain what conditions make quantitative forecasting methods appropriate.
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Chapter 7: Introduction to Linear Programming
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Sample Questions
Q1) In a feasible problem,an equal-to constraint cannot be nonbinding.
A)True
B)False
Q2) Whenever all the constraints in a linear program are expressed as equalities,the linear program is said to be written in
A)standard form.
B)bounded form.
C)feasible form.
D)alternative form.
Q3) A solution that satisfies all the constraints of a linear programming problem except the nonnegativity constraints is called
A)optimal.
B)feasible.
C)infeasible.
D)semi-feasible.
Q4) Solve the following system of simultaneous equations.
6x + 2y = 50
2x + 4y = 20
Q5) Explain what to look for in problems that are infeasible or unbounded.
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Chapter 8: Linear Programming: Sensitivity Analysis and Interpretation of Solution
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Sample Questions
Q1) A section of output from The Management Scientist is shown here. \[\begin{array} { c c c c }
\text { Constraint } & \text { Lower Limit } & \text { Current Value } & \text { Upper Limit }
\\
\hline 2 & 240 & 300 & 420
\end{array}\] What will happen if the right-hand-side for constraint 2 increases by 200?
A)Nothing. The values of the decision variables, the dual prices, and the objective function will all remain the same.
B)The value of the objective function will change, but the values of the decision variables and the dual prices will remain the same.
C)The same decision variables will be positive, but their values, the objective function value, and the dual prices will change.
D)The problem will need to be resolved to find the new optimal solution and dual price.
Q2) The reduced cost for a positive decision variable is 0.
A)True
B)False
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10
Chapter 9: Linear Programming Applications in Marketing, Finance, and
Operations
Management
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Sample Questions
Q1) Portfolio selection problems should acknowledge both risk and return.
A)True
B)False
Q2) Island Water Sports is a business that provides rental equipment and instruction for a variety of water sports in a resort town.On one particular morning,a decision must be made of how many Wildlife Raft Trips and how many Group Sailing Lessons should be scheduled.Each Wildlife Raft Trip requires one captain and one crew person,and can accommodate six passengers.The revenue per raft trip is $120.Ten rafts are available,and at least 30 people are on the list for reservations this morning.Each Group Sailing Lesson requires one captain and two crew people for instruction.Two boats are needed for each group.Four students form each group.There are 12 sailboats available,and at least 20 people are on the list for sailing instruction this morning.The revenue per group sailing lesson is $160.The company has 12 captains and 18 crew available this morning.The company would like to maximize the number of customers served while generating at least $1800 in revenue and honoring all reservations.
Q3) Describe some common feature of multiperiod financial planning models.
Q4) Discuss the need for the use of judgment or other subjective methods in mathematical modeling.
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Chapter 10: Distribution and Network Models
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Q1) When a route in a transportation problem is unacceptable,the corresponding variable can be removed from the LP formulation.
A)True
B)False
Q2) The capacitated transportation problem includes constraints which reflect limited capacity on a route.
A)True
B)False
Q3) The number of units shipped from origin i to destination j is represented by
A)x<sub>ij</sub>
B)x<sub>ji</sub>
C)c<sub>ij</sub>
D)c<sub>ji</sub>
Q4) A dummy origin in a transportation problem is used when supply exceeds demand.
A)True
B)False
Q5) Define the variables and constraints necessary in the LP formulation of the transshipment problem.
Q6) How is the shortest-route problem like the transshipment problem?
Page 12
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Chapter 11: Integer Linear Programming
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Sample Questions
Q1) The product design and market share optimization problem presented in the textbook is formulated as a 0-1 integer linear programming model.
A)True
B)False
Q2) The solution to the LP Relaxation of a maximization integer linear program provides
A)an upper bound for the value of the objective function.
B)a lower bound for the value of the objective function.
C)an upper bound for the value of the decision variables
D)a lower bound for the value of the decision variables
Q3) Integer linear programs are harder to solve than linear programs.
A)True
B)False
Q4) Rounded solutions to linear programs must be evaluated for A)feasibility and optimality.
B)sensitivity and duality.
C)relaxation and boundedness.
D)each of these choices are true.
Q5) Explain how integer and 0-1 variables can be used in a constraint to enable production.
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Chapter 12: Advanced Optimization Applications
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Q1) In the case of functions with multiple local optima,most nonlinear optimization software methods can get stuck and terminate at a local optimum.
A)True
B)False
Q2) Portfolio manager Max Gaines needs to develop an investment portfolio for his conservative clients.His task is to determine the proportion of the portfolio to invest in each of the five mutual funds listed below so that the portfolio provides the best return possible with a minimum risk.Formulate the maximin linear program. \[\begin{array} { c | r r r r }
& { \text { Annual Returns (Planning Scenarios) } } \\
\text { Mutual Fund } & \text { Year 1 } & \text { Year 2 } & \text { Year 3 } & \text { Year 4 } \\
\hline \text { International Stock } & 22.37 & 26.73 & 6.46 & - 3.19 \\
\text { Large-Cap Blend } & 14.88 & 18.61 & 10.52 & 5.25 \\
\text { Mid-Cap Blend } & 19.45 & 18.04 & 5.91 & - 1.94 \\
\text { Small-Cap Blend } & 13.79 & 11.33 & - 2.07 & 6.85 \\
\text { Intermediate Bond } & 7.29 & 8.05 & 9.18 & 3.92 \end{array}\]
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Chapter 13: Project Scheduling: Pertcpm
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Sample Questions
Q1) Three paths of a PERT network have these mean durations and variances in weeks:
\[\begin{array} { c c c }
\hline \text { Path } & \begin{array} { c }
\text { Mean } \\
\text { Duration }
\end{array} & \text { Variance } \\
\hline 1 & 45 & 2.75 \\
2 & 44 & 5.50 \\
3 & 46 & 1.20 \\
\hline \hline
\end{array}\] Which path offers the greatest risk of overrunning a contract deadline of 48 weeks?
Q2) Explain how and why all predecessor activities must be considered when finding the earliest start time.
Q3) Which of the following is a general rule for crashing activities?
A)Crash only non-critical activities.
B)Crash activities with zero slack.
C)Crash activities with the greatest number of predecessors.
D)Crash the path with the fewest activities.
Q4) Why should projects be monitored after the critical path is found?
Page 15
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Chapter 14: Inventory Models
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Q1) Constant demand is a key assumption of the EOQ model.
A)True
B)False
Q2) What could be meant by service level? Why is a clear understanding of this term important?
Q3) If an item's per-unit backorder cost is greater than its per-unit holding cost,no intentional shortage should be planned.
A)True
B)False
Q4) The definition of service level used in this chapter is
A)the percentage of all demand that can be satisfied from inventory.
B)the percentage of all order cycles that do not experience a stockout.
C)the percentage of demand during the lead-time period that can be satisfied from inventory
D)None of the alternatives is correct.
Q5) At the optimal order quantity for the quantity discount model,the sum of the annual holding and ordering costs is minimized.
A)True
B)False
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Chapter 15: Waiting Line Models
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Q1) For an M/M/1 queuing system,if the service rate,µ,is doubled,the average wait in the system,W,is cut in half.
A)True
B)False
Q2) Queue discipline refers to the manner in which waiting units are arranged for service.
A)True
B)False
Q3) For an M/G/1 system with F1F1F1S1 F1F1F10 = 6 and F1F1F1S1 F1F1F10 = 9,with
F1F1F1S1 F1F1F10F1F1F1S1 F1F1F10 = .03,find
a.the probability the system is idle.
b.the average length of the queue.
c.the average number in the system.
Q4) The equations provided in the textbook for computing operating characteristics apply to a waiting line operating
A)at start-up
B)at steady-state
C)under optimal conditions
D)in transition
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Chapter 16: Simulation
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Q1) The degree of risk is associated with the probability or magnitude of loss.
A)True
B)False
Q2) In a Monte Carlo simulation,each simulation trial is dependent upon the result of a previous trial.
A)True
B)False
Q3) On a visit to an amusement park you pass someone who has just ridden a roller coaster and asks you for directions to the First Aid Station.Realizing that traffic at the First Aid Station would be something to study with simulation,you gather some information.Two EMTs staff the station,and patients wait and go to the first one available.People coming there can be divided into two groups: those who need something minor (e.g.Tylenol,a band-aid)or those who need more help.Assume those in the first group constitute 25% of the patients and take 5 minutes to have their problem solved.Those in the second group need an uncertain amount of time,as given by a probability distribution.Develop a flowchart for this simulation problem.
Q4) Simulation is a trial-and-error approach to problem solving.
A)True
B)False
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Chapter 17: Markov Processes
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Q1) A state,i,is an absorbing state if,when i = j,p<sub>ij</sub> = 1.
A)True
B)False
Q2) If the probability of making a transition from a state is 0,then that state is called a(n)
A)steady state.
B)final state.
C)origin state.
D)absorbing state.
Q3) Accounts receivable have been grouped into the following states:
State 1: Paid
State 2: Bad debt
State 3: 0-30 days old
State 4: 31-60 days old
Sixty percent of all new bills are paid before they are 30 days old.The remainder of these go to state 4.Seventy percent of all 30 day old bills are paid before they become 60 days old.If not paid,they are permanently classified as bad debts.
a.Set up the one month Markov transition matrix.
b.What is the probability that an account in state 3 will be paid?
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