Deck 1: Business Analytics

Question 1

When data are classified by the type of measurement scale, which is the strongest form of measurement?

A) nominal
B) interval
C) ordinal
D) ratio

Answer 1

D

Question 2

What is a database?

A) a structured collection of related files and data
B) simply a collection of data
C) a data file holding a single file
D) flat files used to store data

Answer 2

A

Question 3

Nominal data:

A) are ranked according to some relationship to one another.
B) have constant differences between observations.
C) are continuous and have a natural zero.
D) are sorted into categories according to specified characteristics.

Answer 3

D

Question 4

A trader who wants to predict short-term movements in stock prices is likely to use analytics.

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

Question 5

Predictive analytics:

A) summarizes data into meaningful charts and reports that can be standardized or customized.
B) identifies the best alternatives to minimize or maximize an objective.
C) uses data to determine a course of action to be executed in a given situation.
D) detects patterns in historical data and extrapolates them forward in time.

Question 6

The total cost of reaching consumers (C) depends upon the number of consumers (N), advertising costs (A), and transportation costs (T). The linear cost prediction model is represented as: C = c - nN + aA + tT
Where c, n, a, and t are constants and c estimates the total cost when the remaining variables are zero. Which of the following interpretations is true about this model?

A) Change in variables N, A, and T will cause n, a, and t to change.
B) As n decreases, c will increase.
C) When variables N, A, and T are zero, C = c - n + a + t.
D) Change in variables N, A, and T will not reflect any changes in c.

Question 7

Decision variables:

A) cannot be directly controlled by the decision maker.
B) are assumed to be constant.
C) are always uncertain.
D) can be selected at the discretion of the decision maker.

Question 8

In a database, information is stored and maintained in .

A) fields
B) measurements
C) entities
D) attributes

Question 9

A manager at Gampco Inc. wishes to know the company's revenue and profit in its previous quarter. Which of the following business analytics will help the manager?

A) prescriptive analytics
B) normative analytics
C) descriptive analytics
D) predictive analytics

Question 10

Identify the uncontrollable variable from the following inputs of a decision model.

A) investment returns
B) machine capacities
C) staffing levels
D) intercity distances

Question 11

Following are the components of a data set containing purchase details of a shoe manufacturing company. Identify the ratio data.

A) Item Number
B) Rank of suppliers
C) Item cost
D) Arrival Date

Question 12

The demand for coffee beans over a period of three months has been represented in the form of an L-shaped curve. Which form of model was used here?

A) mathematical model
B) visual model
C) kinesthetic (tactile) model
D) verbal model

Question 13

Which of the following inputs of a decision model is an example of data?

A) estimated consumer demand
B) inflation rates
C) costs
D) investment allocations

Question 14

Descriptive analytics:

A) can predict risk and find relationships in data not readily apparent with traditional analyses.
B) helps companies classify their customers into segments to develop specific marketing campaigns.
C) helps detect hidden patterns in large quantities of data to group data into sets to predict behavior.
D) can use mathematical techniques with optimization to make decisions that take into account the uncertainty in the data.

Question 15

Which of the following questions will prescriptive analytics help a company address?

A) How many and what types of complaints did they resolve?
B) What is the best way of shipping goods from their factories to minimize costs?
C) What do they expect to pay for fuel over the next several months?
D) What will happen if demand falls by 10% or if supplier prices go up 5%?

Question 16

Descriptive decision models:

A) aim to predict what will happen in the future.
B) describe relationships but do not tell a manager what to do.
C) help analyze the risks associated with various decisions.
D) do not facilitate evaluation of different decisions.

Question 17

Which of the following is an example of a measure of continuous metrics?

A) four errors revealed in an invoice
B) a delivery delayed by seven days
C) weight and volume of a sheet of steel
D) three incomplete orders on a day

Question 18

Which of the following is the mathematical model for deriving total cost of only manufacturing?

A) TC = VC + (C × Q)
B) TC = F + (C × Q)
C) TC = F + C
D) TC = F + (V × Q)

Question 19

Which of the following allow meaningful comparison of ranges, averages and other statistics?

A) interval data
B) categorical data
C) ratio data
D) ordinal data

Question 20

Which of the following is a disadvantage of ordinal data?

A) They bear no relationship to one another.
B) They have no fixed units of measurement.
C) They have no natural zero.
D) They are not comparable with each other.

Question 21

The manager at Soul Walk Inc., a shoe manufacturing company, wants to set a new price (P) for a shoe model to maximize total profit. The demand (D) as a function of price is represented as: D = 1,500 - 2.5P
The total cost (C) as a function of demand is represented as:
C = 3,200 + 3.5D
Which of the following is a model for total profit as a function of price?

A) (1,508.75× price) - (2.5 × price²) - 8,450
B) (3.5 × price²) + 3,200 - (1925.50 × price)
C) (1,250 × price) + (5 × price²) - 8,320
D) [4521 + (4.5 × price)] × price - 9684.25

Question 22

Which decision model incorporates the process of optimization?

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

Question 23

During which phase in problem solving is a formal model often developed?

A) analyzing the problem
B) structuring the problem
C) defining the problem
D) implementing the solution

Question 24

The product mix is determined by the:

A) accounting staff.
B) middle managers.
C) finance managers.
D) top managers.

Question 25

Which of the following is true about problem solving?

A) Recognizing problems involves stating goals and objectives.
B) Analyzing the problem involves characterizing the possible decisions.
C) Decision making involves translating the results of the model in the organization.
D) Structuring the problem involves identifying constraints.

Question 26

Profit is computed as the difference between total revenue from sales and total cost of production. Revenue depends on the market share captured by a company and the size of the target market. Various marketing decisions taken by managers are reflected upon the market share. The decisions also have an impact on marketing costs which in turn will affect the total cost of production. Construct an influence diagram that relates these variables.

Question 27

Develop a linear model relating the demand for Goody Woods' units to the price.

Question 28

In a database file, which is organized in a two-dimensional table, the rows represent records of related data elements.

Question 29

Which decision model incorporates the uncertainty element?

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

Question 30

Describe the major tools and criteria for decision making. Use the chart below to answer the following two questions:
How many gallons will be sold if the price is increased to $4.75?

A) 833.26
B) 843
C) 798.72
D) 818

Question 31

Describe the major tools and criteria for decision making. Use the chart below to answer the following two questions:
What is the slope of the sales function D = a - bP?

A) 4
B) 9
C) 12
D) 17

Question 32

If D is demand, P is the unit price, and c and d are constants (where d > 0 is the price elasticity), which of the following is a nonlinear demand prediction model?

A) D = d + (c × P)
B) D = (d × P)^c
C) D = c^d × P
D) D = cP^-d

Question 33

Develop a prescriptive model that will help Goody Woods identify the price that maximizes the total revenue.

Question 34

Prescriptive decision models help:

A) make predictions of how demand is influenced by price.
B) make trade-offs between greater rewards and risks of potential losses.
C) decision makers identify the best solution to decision problems.
D) describe relationships and influence of various elements in the model.

Question 35

Middle managers in operations:

A) develop staffing plans.
B) determine product mix.
C) develop advertising plans.
D) make pricing decisions.

Question 36

Which of the following is the first phase in problem solving?

A) defining the problem
B) analyzing the problem
C) recognizing the problem
D) structuring the problem

Question 37

Find the range of volumes at which it is more economical for Nib 'N' Ink to produce the refills in-house or outsource them. (Hint: Use the break-even decision model).

Question 38

When will a company use a predictive decision model?

A) when it wishes to determine the best product pricing to maximize revenue
B) when it wishes to know how best to use advertising strategies to influence sales
C) when it wishes to know sales patterns to plan inventory levels
D) when it wishes to ensure that a specified level of customer service is achieved

Question 39

To meet consumer demand, Nib 'N' Ink must produce 800 gel-ink refills. Should the company produce them in-house or outsource them from the supplier? (Hint: Use the mathematical descriptive model).

Question 40

Decision support systems evolved from efforts to improve military operations prior to and during World War II.

Question 41

What are the three components of decision support systems (DSS)?

Question 42

Why do predictive decision models incorporate uncertainty?

Question 43

A goal of Korel & Marke, a dot-com company, is to gain strategic advantage over its rival
firms. How can Korel & Marke use analytics and exploit social media to accomplish this goal?

Question 44

The complexity of a problem increases when the problem belongs to an individual rather than a group.

Question 45

Measure is the act of obtaining data associated with a metric. Measurements are the numerical values associated with a metric.

Question 46

Explain how data are used by accountants, economists, and operations managers.

Question 47

Data used in business analytics need to be reliable and valid. Explain.

Question 48

A deterministic model is one in which all model input information is either known or assumed to be known with certainty.