Quantitative Methods for Business Study Guide Questions
Course Introduction
Quantitative Methods for Business introduces students to the essential quantitative techniques used in business decision-making and problem-solving. The course covers topics such as data analysis, probability, statistical inference, regression analysis, optimization, and decision analysis. By applying mathematical models and statistical tools, students learn how to analyze business problems, interpret quantitative data, and make informed decisions in areas such as operations, finance, marketing, and management. Practical applications and case studies are integrated to develop proficiency in using software tools and interpreting results within a business context.
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) Decision-making includes optimization techniques for problems with certainty,decision analysis for problems with certainty,and structured sensitivity analysis.
A)True
B)False
Answer: False
Q2) Dealing with uncertainty includes measuring uncertainty and modeling uncertainty explicitly into the analysis.
A)True
B)False
Answer: True
Q3) Which of the following is not one of the steps in the modeling process?
A) Select scale for model.
B) Collect and summarize data.
C) Verify the model.
D) Present the results to the organization.
E) Implement the model and update it over time.
Answer: A
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Chapter 2: Describing the Distribution of a Single Variable
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Sample Questions
Q1) Both ordinal and nominal variables are categorical.
A)True
B)False
Answer: True
Q2) As a measure of variability,what is defined as the maximum value minus the minimum value?
A) variance
B) standard deviation
C) mean
D) range
E) median
Answer: D
Q3) Data can be categorized as cross-sectional or time series.
A)True
B)False
Answer: True
Q4) A distribution of a numerical variable with no skewness is said to be symmetric.
A)True
B)False
Answer: True
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Chapter 3: Finding Relationships Among Variables
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Sample Questions
Q1) The most common data format is
A) long
B) short
C) stacked
D) unstacked
Answer: C
Q2) The tool that provides useful information about a data set by breaking it down into categories is the
A) histogram
B) scatterplot
C) pivot table
D) spreadsheet
Answer: C
Q3) We study relationships among numerical variables using A) correlation
B) covariance
C) scatterplot charts
D) all of these options
E) none of these options
Answer: D
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Chapter 4: Probability and Probability Distributions
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Sample Questions
Q1) If A and B are two independent events with P(A)= 0.20 and P(B)= 0.60,then P(A and B)= 0.80
A)True
B)False
Q2) When we wish to determine the probability that at least one of several events will occur,we would use the addition rule.
A)True
B)False
Q3) The law of large numbers states that subjective probabilities can be estimated based on the long run relative frequencies of events
A)True
B)False
Q4) The law of large numbers is relevant to the estimation of A) objective probabilities
B) subjective probabilities
C) both objective and subjective probabilities
D) neither objective nor subjective probabilities
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Chapter 5: Normal, Binomial, Poisson, and Exponential
Distributions
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Sample Questions
Q1) We assume that the outcomes of successive trials in a binomial experiment are:
A) probabilistically independent
B) probabilistically dependent
C) identical from trial to trial
D) random number between 0 and 1
Q2) For a given probability of success p that is not too close to 0 or 1,the binomial distribution tends to take on more of a symmetric bell shape as the number of trials n increases.
A)True
B)False
Q3) Much of the study of probabilistic inventory models,queuing models,and reliability models relies heavily on the Poisson and Exponential distributions.
A)True
B)False
Q4) The binomial random variable represents the number of successes that occur in a specific period of time.
A)True
B)False
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Chapter 6: Decision Making Under Uncertainty
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Sample Questions
Q1) A strategy region chart is useful for seeing whether the decision changes over the range of the input variable.
A)True B)False
Q2) Rational decision makers are never willing to violate the expected monetary value (EMV)maximization criterion when large amounts of money are at stake.
A)True B)False
Q3) Bayes' is useful in determining the value of perfect information (EVPI).
A)True
B)False
Q4) There are three types of nodes that are used with the decision trees.They are the:
A) mean nodes,variance nodes,and the standard deviation nodes
B) probability nodes,risk nodes,and the expected value nodes
C) supply nodes,demand nodes,and the expected value nodes
D) decision nodes,probability nodes,and end nodes.
E) horizontal nodes,vertical nodes,and the diagonal nodes
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Chapter 7: Sampling and Sampling Distributions
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Sample Questions
Q1) The mean of the sampling distribution of \[\bar { X }\]
Always equals
A) the population mean \(\mu\)
B) \(\mu\) / n
C) the population standard deviation
\(\sigma\)
D)
\(\sigma\) / n
Q2) Estimation is the process of inferring the value of an unknown population parameter using data from a random sample
A)True
B)False
Q3) A sampling error is the result of:
A) measurement error
B) nonresponse bias
C) nontruthful responses
D) bad luck
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Chapter 8: Confidence Interval Estimation
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Sample Questions
Q1) If you are constructing a confidence interval for a single mean,the confidence interval will with a decrease in the sample size.
A) decrease
B) increase
C) stay the same
D) increase or decrease,depending on the sample data
Q2) The lower limit of the 95% confidence interval for the population proportion p,given that n = 300;and \(\hat { p }\) = 0.10 is 0.1339.
A)True
B)False
Q3) As the sample size increases,the t-distribution becomes more similar to the ________ distribution.
A) normal
B) exponential
C) multinominal
D) chi-square
E) binomial
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Chapter 9: Hypothesis Testing
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Sample Questions
Q1) Which of the following values is not typically used for \(a\) ?
A) 0.01
B) 0.05
C) 0.10
D) 0.50
Q2) The test statistic in a hypothesis test for a population proportion is
A) t-value calculated from the sample
B) z-value calculated from the sample
C) F-value calculated from the sample
D) the sample proportion
Q3) The chi-square goodness-of-fit test can be used to test for:
A) significance of sample statistics
B) difference between population means
C) normality
D) difference between population variances
Q4) The rejection region is the set of sample data that leads to the rejection of the alternative hypothesis.
A)True
B)False
Page 11
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Chapter 10: Regression Analysis: Estimating Relationships
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Sample Questions
Q1) In choosing the "best-fitting" line through a set of points in linear regression,we choose the one with the:
A) smallest sum of squared residuals
B) largest sum of squared residuals
C) smallest number of outliers
D) largest number of points on the line
E) None of these options
Q2) For the multiple regression model \(\bar { Y } =
3 }\)
,if \(X _ { 2 }\) were to increase by 5 units,holding \(X _ { 1 }\) and \(X _ { 3 }\)
constant,the value of Y would be expected to decrease by 50 units.
A)True
B)False
Q3) The covariance is not used as much as the correlation because
A) is not always a valid predictor of linear relationships
B) it is difficult to calculate
C) it is difficult to interpret
D) all of these options
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Chapter 11: Regression Analysis: Statistical Inference
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Sample Questions
Q1) A researcher can check whether the errors are normally distributed by using:
A) a t-test or an F-test
B) the Durbin-Watson statistic
C) a frequency distribution or the value of the regression coefficient
D) a histogram or a Q-Q plot
Q2) Which of the following definitions best describes parsimony?
A) Explaining the most with the least
B) Explaining the least with the most
C) Being able to explain all of the change in the response variable
D) Being able to predict the value of the response variable far into the future
Q3) Multicollinearity is a situation in which two or more of the explanatory variables are highly correlated with each other.
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 smoothing constants in exponential smoothing models are effectively a way to assign different weights to past levels,trends and cycles in the data.
A)True
B)False
Q2) The smoothing constant used in simple exponential smoothing is analogous to the span in moving averages.
A)True
B)False
Q3) If a random series has too few runs,then it is zigzagging too often.
A)True
B)False
Q4) If the observations of a time series increase or decrease regularly through time,we say that the time series has a random (or noise)component.
A)True
B)False
Q5) A time series is any variable that is measured over time in sequential order.
A)True
B)False
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Chapter 13: Introduction to Optimization Modeling
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Sample Questions
Q1) The equation of the line representing the constraint \(20 x + 10 y \leq 1000\) Is:
A)
\(y \leq - 20 x + 1000\)
B)
\(y \leq 2 x + 100\)
C)
\(- y \leq 2 x + 100\)
D)
\(y \leq - 2 x + 100\)
Q2) The prototype linear programming problem is to select an optimal mix of products to produce to maximize profit.This type of problem is referred to as the:
A) product mix problem
B) production problem
C) product/process problem
D) product scheduling problem
Q3) 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) In blending problems,if a quality constraint involves a quotient,then the problem will be nonlinear.
A)True B)False
Q2) Any integer program involving 0 - 1 variables with constraint(s)is called a knapsack problem.
A) three
B) two C) one D) zero
Q3) Aggregate planning models are usually implemented through a rolling planning horizon.
A)True B)False
Q4) In aggregate planning models,the number of workers available influences the possible production levels.
A)True B)False
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Chapter 15: Introduction to Simulation Modeling
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Sample Questions
Q1) Which of the following statements is true regarding the Triangular distribution?
A) It is a discrete distribution with a minimum,maximum and most likely value
B) It is more flexible and intuitive than the normal distribution
C) It is a symmetric distribution
D) All of these options
Q2) The "building blocks" of all spreadsheet simulation models are:
A) deterministic inputs
B) random numbers between 0 and 1
C) decision variables
D) probability distributions
Q3) A common guideline in constructing confidence intervals for the mean is to place upper and lower bounds one standard error on either side of the average to obtain an approximate 95% confidence interval.
A)True
B)False
Q4) 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
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Chapter 16: Simulation Models
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Sample Questions
Q1) Suppose we compare the difference between the NPV of a financial model in which the means are entered for all input random variables and the NPV of a financial model in which the most likely values are entered for all input random variables.If we see a large difference between the NPV's,this illustrates:
A) the value at risk (VAR)
B) the effect of randomness
C) the flaw of averages
D) the bias of the analyst
E) None of these options
Q2) What is the standard deviation of the ending balance? What does the distribution look like now? What should Amanda infer from this?
Q3) Develop an @Risk model to estimate the NPV given an assumed capacity.What are the variable inputs and outputs?
Q4) A marketing simulation model can be used to determine the expected profit under uncertain customer loyalty,and then we can use an optimization model to determine the optimal amount to spend on increasing customer loyalty.
A)True
B)False
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Chapter 17: Data Mining
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Sample Questions
Q1) Suppose the odds of Team A winning are 5 to 1.Then,the odds ratio is:
A) 5/1
B) 1/5
C) 6/1
D) 1/6
Q2) A facts table has:
A) few rows and many columns
B) many rows and many columns
C) many rows and few columns
D) few rows and few columns
Q3) 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
Q4) If the estimate on the female variable is positive,what does this indicate about credit card usage?
Q5) 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) Structure query language (SQL):
A) is the "language of databases"
B) was developed in 2010
C) is the "language of Excel"
D) is used to differentiate queries across packages
Q2) Real-world datasets usually do not require any cleansing because they do not contain missing data or typographical errors.
A)True
B)False
Q3) Repetitive tasks are best handled by copying and pasting.
A)True
B)False
Q4) The data in the accompanying figure was imported using "Text Import Wizard." How did the first three rows of text data appear in the text file prior to importing?
Q5) If you had imported the data using 'fixed width,' how would the output have changed?
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20
Chapter 19: Analysis of Variance and Experimental Design
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Sample Questions
Q1) An observational study:
A) analyzes data already available
B) makes it possible to rule out factors over which the researcher has no control for the observed effects
C) examines individuals that have been selected by the researchers
D) allows researchers to control for all extraneous factors
\[\begin{array} { | l | c | c | c | c | c | c | }
\hline \text { ANOVA } \\
\hline \text { Source of Variation } & \text { SS } & \boldsymbol { d f } & \boldsymbol { M S } & \boldsymbol { F } & \boldsymbol { P } \text {-value } & \boldsymbol { F } \text { crit } \\
\hline \text { Between Groups } & & 1 & 44082.89 & 263.86 & 0.00 & 4.23 \\
\hline \text { Within Groups } & 4343.79 & 26 & 167.07 & & & \\
\hline \text { Total } & 48426.68 & 27 & & & & \\
\hline \end{array}\]
Q2) Suppose Mook Corp.was interested in running a two-way ANOVA.What other factors might you recommend they include in the test?
Q3) What does the ANOVA output in the accompanying figure indicate?
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Chapter 20: Statistical Process Control
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Sample Questions
Q1) Common cause variation is the inherent variation in an in-control process.
A)True
B)False
Q2) 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.
Q3) The \(\bar { X }\) chart charts the averages of small subsamples through time.
A)True
B)False
Q4) A p chart plots the proportions of items that are conforming.
A)True
B)False
Q5) Morgan is now using a smaller sample size,but she has forgotten to adjust the upper and lower limits to reflect the smaller sample size.What is likely to occur as she manually plots observations on the chart?
Q6) "Tampering" can actually make a system worse.
A)True
B)False
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