Statistics for Management
Textbook Exam Questions
Course Introduction
Statistics for Management is designed to equip students with the fundamental statistical tools and techniques essential for effective business decision-making. The course covers topics such as data collection, descriptive statistics, probability distributions, sampling, hypothesis testing, regression analysis, and inferential statistics, with a focus on real-world managerial applications. Through case studies and practical exercises, students learn to analyze business data, interpret statistical results, and make evidence-based decisions, preparing them to confidently address complex problems in contemporary management environments.
Recommended Textbook
Introduction to Business Statistics 7th Edition by Ronald M. Weiers
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Page 2
Chapter 1: A Preview of Business Statistics
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Sample Questions
Q1) A customer service survey asks respondents for their birthdates,which are used to calculate their ages.Which scale of measurement does age represent?
A) nominal
B) ordinal
C) interval
D) ratio
Answer: D
Q2) A summary measure that is computed using the entire population is called:
A) a parameter
B) a statistic
C) a sample
D) inferential statistics
Answer: A
Q3) The temperature of the room in which you are taking this test is a ____________________ quantitative variable.
Answer: continuous
Q4) The distinguishing feature of discrete variables is that ____________________ exist between the possible values.
Answer: gaps
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Chapter 2: Visual Description of Data
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Sample Questions
Q1) Define and give a real or hypothetical example of cross-tabulation.
Answer: In cross-tabulation,we express a count of how many people or items are in combinations of categories.Example: we may express a count of how many students in a class are males majoring in accounting and how many are females majoring in finance.
Q2) ____________________ is also known as marginal or one-way tabulation.
Answer: Simple tabulation
Q3) The simple tabulation and cross-tabulation are tabular methods that can be extended to include the mean or other measures of a selected quantitative variable for persons or items within a category or combination of categories.
A)True
B)False
Answer: True
Q4) Raw data are converted to frequency distributions and visual displays that provide us with a "big picture" of the information collected.
A)True
B)False
Answer: True
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Chapter 3: Statistical Description of Data
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Sample Questions
Q1) The measure of central tendency that is most affected by extreme values is the: A) range.
B) mean.
C) median.
D) mode.
E) coefficient of variation.
Answer: B
Q2) ____________________ divide the values into 10 parts of equal size,each comprising 10% of the observations.
Answer: Deciles
Q3) Compute the variance of the salaries.
Answer: 7.097
Q4) A data sample has a mean of 107,a median of 122,and a mode of 134.What type of distribution does it have? Why?
Answer: Negative skewed distribution; since mean < median < mode
Q5) A student scores 89,72,93,and 84 on four exams during the semester and 96 on the final exam.If the final is weighted double and the four others weighted equally,what would the student's final average be?
Answer: 88.33
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Chapter 4: Data Collection and Sampling Methods
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Sample Questions
Q1) Which of the following statements is not true?
A) Extraneous variables refer to outside variables that are not part of the experiment.
B) Persons or objects receiving a treatment are said to be in an experimental group.
C) Persons or objects not exposed to a treatment are said to be in a control group.
D) Internal validity refers to whether the treatment really made the difference in the measurements obtained.
E) All of these are true.
Q2) ____________________ helps us become familiar with the problem situation,identify important variables,and use these variables to form hypotheses that can be tested in subsequent research.
Q3) External validity refers to whether the experimental treatment really made the difference in the measurements obtained.
A)True
B)False
Q4) In experiments,the purpose is to identify ____________________ and ____________________ relationships between variables.
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Chapter 5: Probability: Review of Basic Concepts
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Sample Questions
Q1) What is the probability of tacos being selected at a low profit store?
Q2) Determine the probability of event B.
Q3) A Gulf Coast travel park has the following accommodations:
\[\begin{array}{l}
\quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \text { Number of Gedrams }\\
\begin{array} { | l | c | c | c }
\hline \text { Location } & \text { 3 Gedranm } & \text { 4 Gedranm } & \text { Tatal } \\
\hline \text { Beach Frant } & 17 & 24 & 41 \\
\hline \text { Nan Beach Frant } & 6 & 210 & 216 \\
\hline \text { Tatal } & 23 & 234 & 257 \\
\hline
\end{array}
\end{array}\] Is the event of selecting a beach front site independent of the event of selecting a 3 bedroom facility? Explain.
Q4) Compute P(B and A<sub>3</sub>).
Q5) Compute P(S).
Q6) Define contingency table.
Q7) Define conditional probability.
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Chapter 6: Discrete Probability Distributions
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Sample Questions
Q1) List the four characteristics of a Bernoulli process.
Q2) The driving time between Big Rapids and Grand Rapids is an example of a discrete random variable.
A)True
B)False
Q3) What is the probability that no stockholders are homemakers?
Q4) Which of the following is not a characteristic of a binomial experiment?
A) There is a sequence of identical trials.
B) Each trial results in two or more outcomes.
C) The trials are independent of each other.
D) Probability of success p is the same from one trial to another.
Q5) What is the probability that thirty or more fans arrive between 7:15 and 7:16 P.M.?
Q6) The expected value,E(x),of a binomial probability distribution is:
A) \(n + \pi\)
B) \(n \pi ( 1 - \pi )\)
C) \(n \pi\)
D) \(n + \pi - 1\)
Q7) What is the probability that three of the five canoes will capsize?
Q8) What is the probability that only one of the five canoes will capsize?
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Chapter 7: Continuous Probability Distributions
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Sample Questions
Q1) The mean of the exponential distribution equals the mean of the Poisson distribution only when the former distribution has a mean equals:
A) 1.00.
B) 0.50.
C) 0.25.
D) 2.00.
Q2) Describe the method of finding the area under the standard normal curve between z = 0 and z =- 1.33.
Q3) A coin is flipped 14 times.Using the normal distribution,calculate the probability of observing either 4,5,or 6 heads.
Q4) What does it mean when we say a random variable is standardized?
Q5) The z-score representing the 75th percentile of the standard normal distribution is:
A) 0.67.
B) -0.67.
C) 1.28.
D) -1.28.
E) 1.645.
Q6) Find the z-score that determines that the area to the left of z is 0.9292.
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Chapter 8: Sampling Distributions
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Sample Questions
Q1) The sample proportion can be considered a random variable that will take on different values as the procedure leading to the sample proportion is repeated a great many times.
A)True
B)False
Q2) The number of all possible simple random samples of size 2 that can be taken from a population of 5 elements is 6.
A)True
B)False
Q3) Assume that all possible simple random samples of size two are taken from this population,and that the original population is normally distributed.Apply the Central Limit Theorem to find the mean of the sampling distribution of sample means.
Q4) Calculate the mean of the sample means.
Q5) Find the mean and standard deviation of the sampling distribution of the mean. Mean = ____________________
SD = ____________________
Q6) A Poisson probability distribution with a mean of 4 must have a standard deviation of ____________________.
Q7) Why is the central limit theorem basic to the concept of statistical inference?
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Chapter 9: Estimation From Sample Data
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Q1) Interval limits refer to the upper and lower values of the ____________________.
Q2) Texas passed a law requiring drivers and passengers in the front seat to wear seat belts.In order to estimate the compliance with the law an unmarked car will operate in a selected county and the officer will observe whether or not seat belts are in use.The proportion complying, \(\pi\) ,in the county is to be estimated by randomly selecting the cars to examine.A confidence coefficient of 0.98 is desired with the estimate,p,to be within 0.05 of the true proportion.How many cars are needed in this sample?
Q3) The lower limit of a confidence interval at the 95% level of confidence for the population proportion if a sample of size 200 had 40 successes is:
A) 0.2554.
B) 0.1446. C) 0.2465. D) 0.1535.
Q4) A 0.95 confidence coefficient is equivalent to a 5% confidence level.
A)True B)False
Q5) The use of sample information to draw conclusions about the population is known as ____________________.
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Chapter 10: Hypothesis Tests Involving a Sample Mean or Proportion
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Sample Questions
Q1) If we reject the null hypothesis,we conclude that:
A) there is enough statistical evidence to infer that the alternative hypothesis is true. B) there is not enough statistical evidence to infer that the alternative hypothesis is true. C) there is enough statistical evidence to infer that the null hypothesis is true. D) the test is statistically insignificant at whatever level of significance the test was conducted.
Q2) In testing H0: \(\mu \leq\) 120; H1: \(\mu\) > 120 at the \(\alpha\) = .05 level of significance,the null hypothesis is rejected.We must reach the same conclusion based on a confidence interval at the 95% confidence level.
A)True
B)False
Q3) Use the given information to calculate the p-value and interpret the result: H<sub>0</sub>: \(\mu\) = 60,H<sub>1</sub>: \(\mu\) < 60 \(\text { }\) = 5,n = 100, \(\bar { x }\) = 59, \(\alpha\) = 0.05
p-value = ____________________
Interpretation: ____________________
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Chapter 11: Hypothesis Tests Involving Two Sample Means
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Sample Questions
Q1) What is the decision rule?
Q2) The pooled-variances t-test requires the assumption that the two population ___________________________________ are equal,and that the populations are at least ___________________________________ distributed.
Q3) Can the inspector infer at the 5% significance level that production line 1 is doing a better job than production line 2?
Hypotheses: ___________________________________
Test statistic = ________
Conclusion: ________________
Interpretation: __________________________________________________
Q4) What is the conclusion?
Q5) What is the value of the test statistic?
Appropriate test: ____________________
Test statistic = ____________________
Q6) ____________________ samples are those for which the selection process for one is not related to the selection process for the other.
Q7) What is the test statistic?
Appropriate test: ____________________
Test statistic = ____________________
13
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Chapter 12: Analysis of Variance Tests
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Sample Questions
Q1) Total amount of variation
A)SST
B)SSTR
C)SSE
D)MSTR
E)MSE
Q2) What is the computed value for Factor A (assembly method)sum of squares (SSA)?
Q3) Develop a randomized block design to test for the difference between the average number of customers per day between four different stores using \(\alpha\) = 0.05 and using the days as the blocking variable. Calculate the test statistic.
Q4) What is the computed value for the error sum of squares (SSE)?
Q5) Using \(\alpha\) = 0.05,state the conclusion.
Q6) How is two-way ANOVA similar to the randomized block design? How does it differ?
Q7) In a two-way analysis of variance,there are "a" levels for factor A,"b" levels for factor B,and "r" replications within each of the factor-level combinations,or cells.What are the degrees of freedom for the interaction between factors A and B?
Q8) Using \(\alpha\) = 0.05,state the decision rule in terms of the critical value.
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Q9) What is the computed value for Factor A (assembly method)mean square (MSA)?
Chapter 13: Chi-Square Applications
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Sample Questions
Q1) What is the expected frequency of the 18 or more category?
Q2) Test the equality of proportions at the 0.05 level the hypotheses. Compute the test statistic.
Q3) A test for independence is applied to a contingency table with 4 rows and 5 columns for two nominal variables.Calculate the degrees of freedom for this test.
Q4) These data provide the information for testing the hypothesis that the proportion of unacceptable is the same for the four employees.What is the expected frequency for Acceptable and employee 3?
Q5) The null hypothesis states that the sample data came from a normally distributed population.The researcher calculates the sample mean and the sample standard deviation from the data.The data arrangement consisted of six categories.Using a 0.01 significance level,what is the appropriate critical value for this chi-square test?
Q6) The goodness-of-fit chi-square test is a two-tailed test.
A)True
B)False
Q7) The number of degrees of freedom in a test of a contingency table with r rows and c columns is _________________________.
Q8) What is the critical value for a 0.01 significance level?
Page 15
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Chapter 14: Nonparametric Methods
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Sample Questions
Q1) Explain how to use the p-value to reach a conclusion when testing at the 0.025 level of significance.
Q2) In testing the hypotheses H<sub>0</sub>: m<sub>d</sub> = 0,H<sub>1</sub>: m<sub>d</sub>
0,data are drawn from a matched pairs experiment,and the following statistics are calculated: n = number of nonzero differences = 40; R+ = 238; R- = 582.Assume that the 5% level of significance is used.Which test is used for testing the hypotheses above?
Q3) In general,when should a nonparametric technique be used instead of its parameter counterpart?
Q4) What is the parametric counterpart to the Wilcoxon signed rank test for one sample? Compare the assumptions involved in using the respective tests.
Q5) The z-test approximation to the Wilcoxon rank sum test for comparing two independent samples is used whenever both sample sizes are at least
Q6) The test question is: Do the three airlines have the same median number of complaints? What is the calculated test statistic H?
Q7) What is the rank assigned to the three observations of value 1.8?
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Chapter 15: Simple Linear Regression and Correlation
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Sample Questions
Q1) The number of degrees of freedom associated with the standard error of estimate is
A) n-1 since only the slope is estimated from sample data.
B) n-1 since only the intercept is estimated from sample data.
C) n-1 since only the predicted value of y is estimated from sample data.
D) n-2 since the slope and the intercept are estimated from sample data.
Q2) If the regression equation is \(\hat { y } = 8.63 + 1.0817 x\) ,plot the residuals against the predicted values of y.Does the variance appear to be constant?
Q3) Determine the standard error of estimate.
Q4) Identify the dependent and independent variable.
Q5) The divisor of the standard error of estimate in simple linear regression is:
Q6) Consider the following data values of variables x and y
\[\begin{array} { | l | l | l | l | l | l | }
\hline \mathbf { x } & 4 & 2 & 6 & 4 & 3 \\
\hline \mathbf { y } & 5 & 3 & 7 & 6 & 5 \\
\hline
\end{array}\] Use Excel or Minitab to construct a scatter diagram of the data points
Q7) Differentiate between a confidence interval and a prediction interval.
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Chapter 16: Multiple Regression and Correlation
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Sample Questions
Q1) In testing the significance of a multiple regression model in which there are three independent variables,the null hypothesis is:
A)\(H _ { 0 } : \beta _ { 1 } = \beta _ { 2 } = \beta _ { 3 } = 1\)
B) \(H _ { 0 } : \beta _ { 0 } = \beta _ { 1 } = \beta _ { 2 } = \beta _ { 3 }\)
C) \(H _ { 0 } : \beta _ { 1 } = \beta _ { 2 } = \beta _ { 3 } = 0\)
D) \(H _ { 0 } : \beta _ { 0 } = \beta _ { 1 } = \beta _ { 2 } = \beta _ { 3 } \neq 0\)
Q2) In reference to the equation: \(\hat{ Y }\) = -0.25 + 0.08x<sub>1</sub> + 0.10x<sub>2</sub>,the value 0.08 is the:
A) predicted value of y.
B) estimated change in y when x<sub>1</sub> increases by one unit.
C) estimated change in y when x<sub>2</sub> increases by one unit.
D) predicted value of y when x<sub>1</sub> = 0 and x<sub>2</sub> = 0.
E) predicted value of y when x<sub>1</sub>= 2 and x<sub>2</sub> = 1.
Q3) Use the values in the analysis of variance table to compute the multiple standard error of the estimate.
Q4) For y = annual household expenditure for appliances maintenance and repair,what independent variables could help explain the amount of money a household spends per year for this purpose?
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Chapter 17: Model Building
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Sample Questions
Q1) The coefficient of determination R<sup>2</sup> for the third-order polynomial model is always larger than R<sup>2</sup> for the second-order polynomial model.
A)True
B)False
Q2) Stepwise regression is an iterative procedure that:
A) adds one independent variable at a time.
B) deletes one independent variable at a time.
C) adds one dependent variable at a time.
D) deletes one dependent variable at a time.
E) Both A and B are correct.
Q3) Suppose that the estimated regression equation of a College of Business graduates is given by: \(\hat{ Y }\) = 20,000 + 2000x + 1500D,where y is the starting salary,x is the grade point average and D is a dummy variable which takes the value of 1 if the student is a finance major and 0 if not.A hotel management major graduate with a 3.5 grade point average would have an average starting salary of:
A) $22,000.
B) $27,000.
C) $28,500.
D) $20,000.
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Chapter 18: Models for Time Series and Forecasting
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Sample Questions
Q1) What is the Producer Price Index?
Q2) At the 0.01 significance level with n = 15,k = 2,test the hypothesis that there is positive autocorrelation present.What is the appropriate conclusion?
Q3) What is the linear trend equation?
Q4) In autoregressive forecasting,each independent variable represents the value of the dependent variable for a previous time period.
A)True
B)False
Q5) The trend component of a time series can be examined (1)by using regression techniques to fit a trend line to the data,or (2)by using smoothing techniques to moderate the peaks and valleys within the series.
A)True
B)False
Q6) In forecasting,we use data from the ____________________ in predicting the ____________________ value of the variable of interest,such as automobile sales.
Q7) How do the MAD and MSE criteria differ in their approach to evaluating the fit of an estimation equation to a time series?
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Chapter 19: Decision Theory
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Sample Questions
Q1) Define payoff table.
Q2) Bayesian decision making takes into account the probabilities for the respective states of nature.
A)True
B)False
Q3) Calculate the expected value of perfect information (EVPI)in thousands of dollars. ____________________ thousand
Q4) What decision will be made using the minimax regret criterion?
Q5) In what way are the minimax regret criterion and the expected opportunity loss (EOL)criterion similar? In what ways do they differ?
Q6) The expected value of perfect information is the same as:
A) maximin payoff.
B) maximax payoff.
C) the expected opportunity loss for the best alternative.
D) the expected payoff.
E) the expected payoff with perfect information.
Q7) Which decision has the minimum expected opportunity loss?
Q8) Another term for regret is ______________________________.
Q9) Define the Expected Value of Perfect Information.
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Chapter 20: Total Quality Management
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Q1) Given that a production process may experience both random and assignable variation,for which type of variation is the source generally easier to identify and determine? Why?
Q2) In statistical process control (SPC),a Type I error occurs if we conclude that the process is:
A) in control when in fact it is not.
B) out of control when in fact it is not.
C) in control when this is really true.
D) out of control when this is really true.
E) None of these.
Q3) The Pareto diagram,also known as the Juran diagram,is a bar chart describing the relative frequencies with which various kinds of defects,or nonconformities,have occurred.
A)True
B)False
Q4) What assumptions are made in the mean chart about the distribution of individual measurements for the process that is being monitored?
Q5) What is process capability,and how can its presence be ascertained?
Q6) What function is performed by a control chart's upper and lower limits?
Page 22
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