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Question1)A bakery buys sugar in 15-pound bags

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Question1)A bakery buys sugar in 15-pound bags. The bakery uses 5000 bags of sugar each year. Carrying costs are $20 per bag per year. Ordering costs are estimated at $5 per order. Assume that the bakery is open 250 days a year and its daily demand is estimated at 20 bags. It takes 5 days for each order of sugar to be filled. What are the total annual holding costs?

	$500
	$1000
	$750
	$250
	$20
Question 2

In a scatter diagram, the dependent variable is typically plotted on the horizontal axis.

		True
		False
Question 3

A plant manager is considering buying additional stamping machines to accommodate increasing demand. The alternatives are to buy 1 machine, 2 machines, or 3 machines. The profits realized under each alternative are a function of whether their bid for a recent defense contract is accepted or not. The payoff table below illustrates the profits realized (in $000's) based on the different scenarios faced by the manager.
 
Alternative           Bid Accepted           Bid Rejected
Buy 1 machine              $10                           $5
Buy 2 machines            $30                           $4
Buy 3 machines            $40                           $2

Using the information above, which alternative should be chosen based on the minimax regret criterion?

	Buy 1 machine
	Buy 2 machines
	Buy 3 machines
Question 4

A plant manager is considering buying additional stamping machines to accommodate increasing demand. The alternatives are to buy 1 machine, 2 machines, or 3 machines. The profits realized under each alternative are a function of whether their bid for a recent defense contract is accepted or not. The payoff table below illustrates the profits realized (in $000's) based on the different scenarios faced by the manager.
 
Alternative           Bid Accepted           Bid Rejected
Buy 1 machine              $10                           $5
Buy 2 machines            $30                           $4
Buy 3 machines            $40                           $2

Using the information above, which alternative should be chosen based on the maximin criterion?

	Buy 1 machine
	Buy 3 machines
	Buy 2 machines
Question 5

Stating that two events are statistically independent means that the probability of one event occurring is independent of the probability of the other event having occurred.

		True
		False
Question 6

Consider the following gasoline data:
 

Referring to the information above, suppose we expect year 3 to have annual demand of 800. What is the forecast value for the second quarter in year 3?

 

	182.64
	175.00
	175.34
	186.00
Question 7

A __________ is a numerical statement about the likelihood that an event will occur.

	variance
	collectively exhaustive construct
	standard deviation
	probability
	mutually exclusive construct
Question 8

Consider the following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature S1, S2, and S3.
                  S1        S2        S3
       A         $60      $145     $120          
       B         $75      $125     $110
       C         $95      $85       $130
 
Refer to the payoff table. Using the maximax criterion, what would be the highest expected payoff?

	$120
	$124
	$145
	$110
	$100
Question 9

Which of the following terms is interchangeable with quantitative analysis?

	Financial analysis
	Statistics
	None of the above
	Economics
	Management science
Question 10

A bakery buys sugar in 15-pound bags. The bakery uses 5000 bags of sugar each year. Carrying costs are $20 per bag per year. Ordering costs are estimated at $5 per order. Assume that the bakery is open 250 days a year and its daily demand is estimated at 20 bags. It takes 5 days for each order of sugar to be filled. What is the average inventory held in a given cycle?

	0
	25
	50
	75
	100
Question 11

A controllable variable is also called:

	a mathematical model.
	a measurable quantity.
	a decision variable.
	none of the above.
	a parameter.
Question 12

Arrivals in a university advising office during the week of registration are known to follow a Poisson distribution with an average of four people arriving each hour. What is the probability that exactly five people will arrive in the next hour?

	0.1563
	0.1509
	0.1633
	0.1688
Question 13

If a bucket has three black balls and seven green balls, and we draw balls without replacement, the probability of drawing a green ball is independent of the number of balls previously drawn.

		True
		False
Question 14

Assume that you have tried three different forecasting models. For the first, the MAD = 2.5, for the second, the MSE = 10.5, and for the third, the MAPE = 2.7. We can then say:

	the second method is the best.
	None of the above
	methods one and three are preferable to method two.
	method two is least preferred.
	the third method is the best.
Question 15

If the assumptions of regression have been met, errors plotted against the independent variable will typically show patterns.

		True
		False
Question 16

Which of the following is not a common pitfall of regression?

	Concluding that a statistically significant relationship implies practical value.
	Nonlinear relationships cannot be incorporated.
	Using a regression equation beyond the range of X is very questionable.
	If the assumptions are not met, the statistical tests may not be valid.
	Two variables may be highly correlated to one another but one is not causing the other to change.
Question 17

A local ice cream shop sells 10,000 cones of vanilla-flavored ice cream each year. The cones are ordered from an outside supplier and it takes 5 days for each shipment of cones to arrive. Ordering costs are estimated at $15 per order. Carrying costs are $5 per cone per year. Assume that the ice cream shop is open 250 days a year. What is the optimal EOQ for ice cream cones?

	186.75
	81.65
	122..47
	244.95
Question 18

A scatter diagram is useful to determine if a relationship exists between two variables.

		True
		False
Question 19

Data for a particular subdivision near downtown Houston indicate that the average price per square foot for a home is $100 with a standard deviation of $5 (normally distributed). What is the probability that the average price per square foot for a home is less than $85?

	0.618
	0.382
	0.999
	0.001
	None of the above
Question 20

Consider the following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature S1, S2, and S3.
                  S1        S2        S3
       A         $60      $145     $120          
       B         $75      $125     $110
       C         $95      $85       $130
 
Refer to the payoff table. Using the maximin criterion, what would be the highest expected payoff?

	$75
	$60
	$85
	$145
	$125
Question 21

Daily demand for newspapers for the last 10 days has been as follows: 12, 13, 16, 15, 12, 18, 14, 12, 13, 15 (listed from oldest to most recent). Forecast sales for the next day using a two-day weighted moving average where the weights are 3 and 1 are:

	14
	13.5
	12.25
	12.75
	14.5
Question 22

A bakery buys sugar in 15-pound bags. The bakery uses 5000 bags of sugar each year. Carrying costs are $20 per bag per year. Ordering costs are estimated at $5 per order. Assume that the bakery is open 250 days a year and its daily demand is estimated at 20 bags. It takes 5 days for each order of sugar to be filled. What is the minimum inventory held in a given EOQ cycle?

	25 bags
	0 bags
	2500 bags
	50 bags
	100 bags
Question 23

The regression model assumes the errors are normally distributed.

		True
		False
Question 24

An urn contains seven blue and three yellow chips. If the drawing of chips is done with replacement, what is the probability of drawing a blue chip on the second draw given that a yellow chip was drawn on the first draw?

	0.300
	0.700
	0.210
	0.027
Question 25

Which of the following is not classified as a qualitative forecasting model?

	Sales force composite
	Jury of executive opinion
	Delphi method
	Consumer market survey
	Exponential smoothing