Question 1

NEC launches a new TV set in Washington State in 2008 with a limited release. Company executives are interested in tracking sales' patterns in order to make production decisions for the following year. What graphical tool can display sales figures by month?

Accepted Answer

A histogram is a graphical tool that captures statistical frequencies.
Key Takeaway: Frequencies provide important statistical information such as the amount of sales, number of cars on the road, or the number of TV sets sold. A histogram is a graphical tool that captures statistical frequencies by displaying them as bars with heights corresponding to the frequency.

Question 2

Kroger's grocery stores in Houston are interested in gauging the response of weekend managers to door promotions. By selecting specific managers, what sampling method are executives using in their research?

Accepted Answer

Judgment sampling is a sampling methodology that targets pre-selected experts.
Key Takeaway: Judgment is a sampling method that selects a sample for research based on their expertise or knowledge. By selecting weekend managers at Kroger's stores, the company is wishing to gain information on response to door promotions of those specifically knowledgeable to weekend sales and customer traffic.

Question 3

A biomedical company is studying whether its knee joint replacement is causing nerve damage. After extensive tests, the researchers make an erroneous decision, concluding that the replacement does cause nerve damage. A Type I error is the probability of?

Accepted Answer

A Type I error is the probability of rejecting the null hypothesis when it is true.
Key Takeaway: A Type I error in hypothesis testing is the probability of rejecting the null hypothesis when it is true. In this example, it is the probability that research will show that the knee joint replacement is causing nerve damage when it is not. Instead of accepting the null hypothesis of no damage, the researchers make a mistake of rejecting it and concluding that the replacement does cause damage.

Question 4

All of the following are the components of the multiple regression model EXCEPT:

Accepted Answer

A correlation coefficient is not a component of a multiple regression model.
Key Takeaway: Multiple regression analysis is used to study the effect of two or more independent (or explanatory) variables on the dependent variable. A multiple regression model is comprised of slopes of trend lines (corresponding to the independent variables), random error terms, and an intercept. Correlation coefficients are not considered to be components of a multiple regression model.

Question 5

Executives at a software company are studying the differences between two groups of application users using Analysis of Variance (ANOVA). If they ACCEPT the null hypothesis in this study, the implication is that:

Accepted Answer

Accepting the null hypothesis in a study of two groups implies that there are no differences in the means between the two groups.
Key Takeaway: In the ANOVA, accepting the null hypothesis means that there are no significant differences between mean values of two groups. Conversely, rejecting the null hypothesis means that there is significant difference between means values of two groups.

Question 6

Using a Program Evaluation & Review Chart (PERT) model, fundraising managers at Smith College develop a plan to expand the reach of their capital gains campaign. What is the main purpose behind the use of a PERT model in project management?

Accepted Answer

Root The main goal behind the use of a Program Evaluation & Review Chart (PERT) model is to analyze tasks involved in completing a project.
Key Takeaway: A PERT is an analytical tool that graphically shows the tasks and time needed to complete a project. The model makes sure to elucidate milestones and activities that are necessary to bring about a successful completion of all project needs.

Question 7

Procom Systems uses a centralized system of gathering and analyzing feedback from customers through an online repository of surveys. What is this system called?

Accepted Answer

Enterprise Feedback Management (EBM) is a system of managing the use of surveys within an organization.
Key Takeaway: Feedback from clients through surveys is important to an organization's feedback management. EBM is a system that allows an organization to gather, analyze, and disseminate survey results within an organization.

Question 8

SWOT analysis is frequently used by companies to assess the viability of a new project or an existing one. The goal of this analysis is to provide __________ into the company's past performance and ___________ about its future performance.

Accepted Answer

SWOT analysis provides insight into past performance and foresight about future performance.
Key Takeaway: Strengths, Weaknesses, Opportunities, Threats (SWOT) analysis is a common tool that helps a company gain insight about why projects have succeeded or failed in the past. SWOT analysis also provides valuable information about future viability and performance.

Question 9

The Taguchi method for improving product quality of goods aims to eliminate variation in manufacturing. When is this method optimally used in the manufacturing life cycle?

Accepted Answer

The Taguchi method for improving product quality is optimally used during the design stage of the manufacturing life cycle.
Key Takeaway: The Taguchi method is a statistical method for improving product quality of manufactured goods. This method is optimally used during the design stage of the manufacturing life cycle, especially at the conceptual level.

Question 10

A manager of an 800-room hotel wishes to study the time it takes to deliver luggage to a room. For 10 days, he collects data on delivery times which can be up to 20 per day. What measure of dispersion can he use to analyze this data?

Accepted Answer

Standard deviation is a measure of dispersion that analyzes the spread of data around the mean.
Key Takeaway: Standard deviation is the most common measure of dispersion and provides information about the distribution of the data around the mean. When the data values are close together and the bell-shaped curve is steep, the standard deviation is expected to be small. When the data values are widely dispersed and the bell curve is relatively flat, that shows that you have a fairly large standard deviation.

Question 11

Weigh-It-Right is producing a new brand of scales that measures body fat in addition to weight. Under testing conditions, the scale shows a consistent weight of 0.25 lbs. What is this an example of?

Accepted Answer

Constant bias is a measure of accuracy whereby a machine is off its accurate reading by a constant value.
Key Takeaway: If a scale consistently shows weight to be off by 0.25lbs., this is an example of constant bias. Bias is a component of accuracy that is especially important in calibrating machines. Constant bias is often seen when machines are old or poorly calibrated.

Question 12

A national dairy farm is facing significant revenue losses due to customer returns and store rejections of their milk products. Executives wish to quantify the actual cost of poor quality on revenues. Cost of Poor Quality (COPQ) includes the following EXCEPT:

Accepted Answer

Cost of Poor Quality (COPQ) calculations do not include prevention or training programs.
Key Takeaway: COPQ contain the material, labor, utilities costs of producing and repairing defective materials and goods. They also include lost opportunities to collect revenues and potential market shares that could be replaced by competitors such as those in the same area as the dairy farm.

Question 13

A marketing company claims that its customer return 12% of promotional surveys they conduct on a quarterly basis. To test this claim, a random sample of 1000 customers are sent a promotional survey. The significance level (a) of this study is set at 0.05. What does a significance level imply?

Accepted Answer

The significance level in a research study is the probability of rejecting the null hypothesis when it is true.
Key Takeaway: The significance level (a) is a statistical hypothesis test of the probability of rejecting the null hypothesis when it is true. In this example, the researchers have set this level at 0.05 which means that there is a 5% chance that they will wrongly conclude that the customer return rate of 12% is not true.

Question 14

Researchers at a soap production company are interested in the purchasing differences amongst 3 of their products (Product 1, Product 2, and Product 3). They state a null hypothesis that there are no differences between mean sales of the 3 products. The alternate hypothesis is stated as:

Accepted Answer

In ANOVA analysis of the 3 soaps, the alternate hypothesis is stated as H1: Not all µ_x are the same (where x is a product). Key Takeaway: In ANOVA, the means of three samples are compared. The alternate hypothesis states that not all population means are equal. In this example, the alternate hypothesis is asserting that there are statistically significant differences in the mean sales of the 3 soap products.

Question 15

In the company's annual retreat, several members complain to the facilitators that some participants are not putting in an equal effort. What is this behavior referred to?

Accepted Answer

Social loafing is a behavior that develops in a group setting whereby some members do not achieve as well in a group setting as they would in an individual setting.
Key Takeaway: Teams often face the problem of unequal contributions by individual members. Social loafing is a behavior pattern whereby individuals do not achieve or contribute as much to a task in a group setting as they would in an individual setting. Social loafing is a cause of strife and conflict in team projects and needs active leadership intervention to define roles and responsibilities clearly.

Question 16

In a brainstorming session, an effective facilitator should NOT:

Accepted Answer

An effective facilitator should not dismiss ideas in the early stages of a brainstorming session.
Key Takeaway: An effective facilitator understands that a successful brainstorming session is one where ideas flow freely within an agreed upon structure, and all members are encouraged to participate fully. Such a facilitator also understands that it is important to welcome all ideas, especially in the early stages of the session and not dismiss any. The goal of welcoming all ideas is to exchange solutions freely and to open the discussion for creative input.

Question 17

Jackie's communication firm is asked to provide a training session to a medical supplies' sales force. The session emphasizes the importance of involving the intended audience when making sales presentations. In order of importance, rank the level of involvement of the audience in bringing about effective results:

Accepted Answer

The level of audience involvement in a presentation follows an order of importance as such: tell < show < consult < engage.
Key Takeaway: Engaging an audience in the product that you are selling them is the most effective communication tool in a presentation. Less effective is consulting them such as asking them to provide written comments or opinions. Finally, the least effective methods of audience involvement are telling and showing of products. These make the audience too passive to become involved.

Question 18

Jeffrey is a real estate agent who wishes to study the relationship between the selling price of a house and its size (measured in feet) in Manhattan. He develops a simple linear regression model as seen below. What is the slope of the model? Houseprice = 95.5 + 0.25 (square feet) + 13

Accepted Answer

The slope of the above model is 0.25.
Key Takeaway: A simple linear regression model contains three components: intercept, slope, and error term. The slope of the model is multiplied by the independent variable (size of the house) in the equation in order to calculate the dependent variable (house price).

Question 19

Managers at an oil and gas company are interested in improving current safety procedures in their plants in the Gulf Coast. Six Sigma certified professionals are consulted on how to improve these processes. In Six Sigma's DMAIC methodology, what does the 'M' represent?

Accepted Answer

In Six Sigma's DMAIC methodology, 'M' represents measure.
Key Takeaway: Six Sigma's DMAIC is a quality improvement methodology that is used to improve current/existing processes and products. The acronym stands for sequential steps as follows: Define, Measure, Analyze, Improve, and Control. Data on current processes is measured in order to assess their performance and capabilities.

Question 20

Process variation is a natural phenomenon in business as no two products or service experiences offered to customers can be identical. What two components make up process variation?

Accepted Answer

Common cause variation and special cause variation make up overall process variation.
Key Takeaway: In business, no two products or service experiences are identical. Process variation (due to people, machines, environment, and methods) attempts to explain how those variations come to pass. Common cause special cause variations are both implicated in the overall process variation.

Quiz 2: Six Sigma Green Belt