Question 1

All of the following are the components of the multiple regression model EXCEPT:
A)slopes of trend lines
B)correlation coefficients
C)random error terms
D)intercept

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 2

What is the mean for the following expenditures? $79.84, $278.99, $342.16, $466.25, $111.39, $502.47, $98.12
A)$278.99
B)$268.46
C)$354.22
D)$317.54

Accepted Answer

The mean for the data set above is $268.46. The median or middle number when the numbers are in ascending order ($79.84, $98.12, $111.39, $278.99, $342.16, $466.25, $502.47) is $278.99.

Question 3

A significant limitation of regression analysis is:
A)an incomplete understanding of the relationship between the independent and dependent variable
B)an incomplete understanding of the relationship between the slope and the random error term
C)an incomplete understanding of the relationship between the slope and the intercept
D)an incomplete understanding of the relationship between the intercept and the random error term

Accepted Answer

A significant limitation of regression analysis is an incomplete understanding of the relationship between the slope and the random error term.
Key Takeaway: Regression analysis is the most common method for making accurate predictions about future outcomes. By using data collected about two variables, regression analysis allows a business manager to make a prediction about one variable from another variable. In a regression, there is a risk of an incomplete understanding of the relationship between the slope (rate of change of one variable against the other variable) and the random error term (which takes into account the deviation of individual data points from the mean of the data set).

Question 4

A Sprint Telecom executive believes customers in a market segment are in their late 20s. He chooses and studies a sample of cell phone users with a mean age of 28 years when in fact, the population mean is 38 years. The probability of a Type II error increases as you:
A)set the probability of the wrong population parameter higher
B)set the probability of the wrong population parameter lower
C)set the probability of a Type I error higher
D)set the probability of a Type I error lower

Accepted Answer

The probability of a Type II error increases as you set the probability of a Type I error lower.
Key Takeaway: A Type II error in hypothesis testing is the probability of accepting a null hypothesis when it should be rejected. In this example, the Sprint executive accepts the null hypothesis, which means that he believes the population is younger than it actually is. This has serious implications for business problems or needs as one cannot target a population for which they are missing basic demographic characteristics. The lower the chance of rejecting the null hypothesis in error, the higher the probability of committing a Type II error.

Question 5

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?
A)rejecting the alternative hypothesis when it is true
B)rejecting the null hypothesis when it is true
C)accepting the null hypothesis when it is true
D)accepting the alternative hypothesis when it is true

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 6

Quality control at a software production assembly line chooses samples for study from every 25 units produced within the day shift. At the end of a single production cycle, they are expected to analyze 200 units for defects. What is this type of sampling called?
A)probability
B)non-probability
C)convenience
D)judgment

Accepted Answer

Probability sampling is a sampling methodology whereby an item is chosen based on a known probability.
Key Takeaway: Probability sampling means that participants or items in a sample are chosen out of the population according to some known probability. These probabilities can range from simple to more complicated ways to choose sample participants or items out of a population. In this example, a product has a 1/25 chance of being chosen for quality control.

Question 7

Jason's company manufactures parts for large car producers such as Toyota and Honda. Management at his company is committed to continuous improvement in manufacturing standards and practices through rigorous training. What is the name of this practice?
A)Kaiser
B)error-proofing
C)Kaizen
D)teamwork

Accepted Answer

Kaizen is the commitment to continuous improvement in manufacturing standards and practices.
Key Takeaway: Kaizen is derived from a Japanese term for continuous improvement in manufacturing and business standards and practices. Kaizen is comprised of five main elements: teamwork, personal discipline, improved morale, quality circles, and improvement suggestions. The goal of Kaizen is to standardize and improve manufacturing and business activities continuously.

Question 8

Executives at a national mining company insist that their employees did not contract lung cancer from occupational pollutants. They develop a regression model that shows 67% of the lung cancers reported are due to other factors such as personal smoking and genetic predisposition. The random error term in the linear regression model indicates:
A)a numerical estimate of the relationship between the independent and dependent variables
B)a numerical estimate of factors outside the independent variable
C)a numerical estimate of factors outside the dependent variable
D)a numerical estimate of the relationship between the intercept and the slope

Accepted Answer

The random error term in the linear regression model indicates a numerical estimate of factors outside the independent variable.
Key Takeaway: The random error term in a linear regression model provides a numerical estimate of factors that are not study in a particular research study. In this example, the mining company executives are asserting that 67% of lung cancer causes are due to factors outside the independent variable, which in this case are the occupational pollutants.

Question 9

An Entertainment consulting agency wishes to study the effect of salary bonuses on employee performance. Specifically, they wish to find out if an annual bonus increases the number of signed clients. What does employee performance represent, in this case?
A)research question
B)independent variable
C)dependent variable
D)research design

Accepted Answer

When studying the effect of salary bonuses on employee performance, employee performance is considered the dependent variable.
Key Takeaway: A dependent variable is a variable of interest to researchers in how it responds to certain conditions, or independent variables. In this example, salary bonuses are independent variables that could cause one of three changes in the dependent variable, employee performance: no change, increased performance, or decreased performance.

Question 10

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?
A)histogram
B)run chart
C)CTQ tree
D)process map

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 11

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?
A)convenience sampling
B)stratified sampling
C)simple random sampling
D)judgment sampling

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 Krogerâ€™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 12

JC Penney is a large retailer with hundreds of outlets across the United States. An executive manager is interested in how promotional spending affects quarterly sales figures in North Carolina where sales have been dismal in a number of quarters. Her hypothesis is that promotional spending does not affect quarterly sales in North Carolina. What is a null hypothesis in a research study based upon?
A)educated guess about a population study
B)educated guess about a sample study
C)educated guess about a population parameter
D)educated guess about a sample statistic

Accepted Answer

A null hypothesis in a research study is based upon an educated guess about a population parameter
Key Takeaway: Null hypotheses are educated guesses about a population parameter. In this example, all JC Penney stores in North Carolina are the population parameter. Due to cost and time restrictions, this executive may choose about 20 stores from the state to study. The results from this study will be used to accept or reject the null hypothesis about stores in the entire state.

Question 13

Jackson's team is choosing participants for his marketing research from a list of customers. They decide to choose every 7^th name in a list of telephone numbers within the directory. What is this type of sampling referred to? A)stratified B)systematic C)simple random D)judgment

Accepted Answer

Systematic sampling is a sampling method that organizes data into schemes and chooses participants at regular intervals.
Key Takeaway: Systematic sampling is a method that arranges a target population into an ordered scheme from which participants or items at regular intervals are chosen. Systematic sampling is an example of probability sampling whereby the researchers choose a sample based on a known probability.

Question 14

Quantitative research methods involve the measurement and analysis of data. All of the following are examples of quantitative methods EXCEPT:
A)case study
B)survey
C)questionnaire
D)experiment

Accepted Answer

Surveys, questionnaires, and experiments are all examples of quantitative research methods.
Key Takeaway: Quantitative research methods involve the collection and analysis of numerical data such as the number of defective equipment produced or the average age of customers targeted in a marketing campaign. A case study is an in-depth examination of a single business problem and is considered a qualitative research method.

Question 15

In regression analysis, the following assumptions are made EXCEPT:
A)linearity
B)homoscedasticity
C)normality of errors
D)dependence of errors

Accepted Answer

In regression analysis, assumptions are based on the L.I.N.E principle as follows: linearity, independent of errors, normality of errors, and equal variance (or homoscedasticity)
Key Takeaway: In regression analysis, an assumption is made that error values are statistically independent. If the error values are dependent, they cause inaccurate results and conclusions as the variables being studied may be dependent. Regression analysis also assumes that errors are normally distributed for any independent variable, and that variance across the variables is equal.

Question 16

The given numbers are daily groundwater elevation readings from a monitoring well taken during a month experiencing snowmelt and extended rainfall events. 7.6, 7.7, 4.3, 5.9, 5.0, 10.5, 7.7, 9.5, 12.0, 12.6, 6.5, 8.3, 8.2, 13.2, 12.6, 13.6, 14.1, 13.5, 11.5, 12.0, 10.4, 10.8, 13.1, 12.5, 10.4, 13.0, 14.1, 15.1
What is the standard deviation of these groundwater elevation readings?
A) 3.01
B) 4.15
C) 9.08
D)None of the above.

Accepted Answer

The standard deviation of the groundwater elevation readings is 3.01. Use the standard deviation (s) equation s = square root [?(sample value - sample mean)2/(number of samples-1)] Where number of samples = 28 Sample mean = ?(sample values)/number of samples = 295.7/28 = 10.56 ?(sample value - sample mean)² = (7.6-10.56)²+(7.7-10.56) ² = 245.4 s² = 245.4/27 = 9.089 s = 3.01

Question 17

Kruger's grocery chain asks customer during their Saturday shopping if they would fill out surveys. In return, they offer them in-store savings. Customers are chosen randomly and the overall sample numbers depends on customer compliance. What is this type of sampling referred to?
A)stratified
B)judgment
C)cluster
D)convenience

Accepted Answer

Convenience sampling is an example of non-probability sampling whereby participants are not chosen according to a known probability.
Key Takeaway: Convenience sampling means that the researcher simply grabs the first available participants. Convenience sampling is widely used by business marketers and social science researchers interested in measuring consumer behaviors and attitudes. This sampling method can be useful as an initial step toward a larger study because it gives the researcher an idea about trends.

Question 18

What are the advantages of using the Least Squares Method rather than the Compass Rule adjustment to address traverse closure errors?
A)The least squares method results in a weighted means adjustment.
B)The least squares method may be used to adjust any type of data to meet geometric conditions and reflect statistical considerations.
C)Free computer software programs are readily available to solve complex equations.
D)All of the above

Accepted Answer

The advantages of using the Least Squares Method rather than the Compass Rule adjustment to address traverse closure errors include all of the listed reasons. Using the Compass Rule to adjust traverses results in an even distribution of the error closure throughout the entire traverse, rather than applying an adjustment at a point where the error may have more likely occurred. There are many sources of free software programs that perform least squares adjustment, including Adjust and Utilities (National Geodetic Survey) and Star*Net (MicroSurvey - demonstration software only).

Question 19

In linear regression, the total variation explained by the variation attributable to the relationship between X (the independent variable) and Y (the dependent variable). Unexplained variation is attributable to factors outside of X. What is this variation called?
A)total sum of squares
B)regression sum of squares
C)linear sum of squares
D)error sum of squares

Accepted Answer

The error sum of squares (SSE) is the unexplained variation in linear regression.
Key Takeaway: In linear regression, the effect of the independent variable on the dependent variable plus outside factors contribute to the development of a linear regression model. For example, if the effects of smoking on the development of lung cancer, outside factors could be environmental factors or radiation exposure.

Question 20

Given a data set of high performing sales numbers from a population of 2000 sales people across a national company, how is a sampling error calculated?
A)subtracting the sample statistic from the population parameter
B)subtracting the population parameter from the sample statistic
C)subtracting the sample mean from the data value
D)subtracting the data value from the sample mean

Accepted Answer

To calculate a sampling error, you must subtract the sample statistic from the population parameter.
Key Takeaway: A sampling error is calculated by subtracting a sample statistic. For example, a sampling error of means can be calculated by subtracting mean salesâ€™ figures for one sales person from the population parameter or mean salesâ€™ figures for all 2000 sales people.

Quiz 5: Statistics

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

What is the mean for the following expenditures? $79.84, $278.99, $342.16, $466.25, $111.39, $502.47, $98.12

A significant limitation of regression analysis is:

A Sprint Telecom executive believes customers in a market segment are in their late 20s. He chooses and studies a sample of cell phone users with a mean age of 28 years when in fact, the population mean is 38 years. The probability of a Type II error increases as you:

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?

Quality control at a software production assembly line chooses samples for study from every 25 units produced within the day shift. At the end of a single production cycle, they are expected to analyze 200 units for defects. What is this type of sampling called?

Jason's company manufactures parts for large car producers such as Toyota and Honda. Management at his company is committed to continuous improvement in manufacturing standards and practices through rigorous training. What is the name of this practice?

An Entertainment consulting agency wishes to study the effect of salary bonuses on employee performance. Specifically, they wish to find out if an annual bonus increases the number of signed clients. What does employee performance represent, in this case?

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?

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?

Jackson's team is choosing participants for his marketing research from a list of customers. They decide to choose every 7^th name in a list of telephone numbers within the directory. What is this type of sampling referred to?

Quantitative research methods involve the measurement and analysis of data. All of the following are examples of quantitative methods EXCEPT:

In regression analysis, the following assumptions are made EXCEPT:

Kruger's grocery chain asks customer during their Saturday shopping if they would fill out surveys. In return, they offer them in-store savings. Customers are chosen randomly and the overall sample numbers depends on customer compliance. What is this type of sampling referred to?

What are the advantages of using the Least Squares Method rather than the Compass Rule adjustment to address traverse closure errors?

In linear regression, the total variation explained by the variation attributable to the relationship between X (the independent variable) and Y (the dependent variable) . Unexplained variation is attributable to factors outside of X. What is this variation called?

Given a data set of high performing sales numbers from a population of 2000 sales people across a national company, how is a sampling error calculated?