Math 540 Strayer midterm quiz (3 different quizzes)

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Question 1 Deterministic techniques assume that no uncertainty exists in model parameters. Answer True False Question 2 A joint probability is the probability that two or more events that are mutually exclusive can occur simultaneously. Answer True False Question 3 A continuous random variable may assume only integer values within a given interval. Answer True False Question 4 A decision tree is a diagram consisting of circles decision nodes, square probability nodes, and branches. Answer True False Question 5 Excel can only be used to simulate systems that can be represented by continuous random variables. Answer True False Question 6 Starting conditions have no impact on the validity of a simulation model. Answer True False Question 7 Data cannot exhibit both trend and cyclical patterns. Answer True False Question 8 Qualitative methods are the least common type of forecasting method for the long-term strategic planning process. Answer True False Question 9 In Bayesian analysis, additional information is used to alter the __________ probability of the occurrence of an event. Answer marginal conditional binomial Revised Question 10 is a measure of dispersion of random variable values about the expected value. Answer Standard deviation Range The z-score (the standard score) All of the above

Question 11 The __________ is the maximum amount a decision maker would pay for additional information. Answer expected opportunity loss expected value expected value of perfect information none of the above Question 12 Random numbers generated by a __________ process instead of a __________ process are pseudorandom numbers. Answer physical / physical physical / mathematical mathematical / physical mathematical / mathematical Question 13 Two hundred simulation runs were completed using the probability of a machine breakdown from the table below. The average number of breakdowns from the simulation trials was 1.93 with a standard deviation of 0.20. No. of breakdowns per week Probability Cumulative probability 0 .10 .10 1 .25 .35 2 .36 .71 3 .22 .93 4 .07 1.00

What is the probability of 2 or fewer breakdowns? Answer .10 .25 .35 .71 Question 14 In the Monte Carlo process, values for a random variable are generated by __________ a probability distribution. Answer sampling from running integrating implementing Question 15 Developing the cumulative probability distribution helps to determine Answer the coefficient of variation data sets random number ranges all of the above Question 16 In exponential smoothing, the closer alpha is to __________, the greater the reaction to the most recent demand. Answer

-1 0 1 -1 or 1 Question 17 Consider the following graph of sales.

Which of the following characteristics is exhibited by the data? Answer Trend only Trend plus seasonal Seasonal only None of the above Question 18 __________ is a linear regression model relating demand to time. Answer Linear trend Linear regression Forecast demand Linear equation Question 19 Which of the following possible values of alpha would cause exponential smoothing to respond the most slowly to sudden changes in forecast errors? Answer .01 .10 .50 .90 Question 20 Consider the following demand and forecast. Period Demand Forecast 1 7 10 2 12 15 3 18 20 4 22

If , what is the forecast for period 4? Answer 21 22 23 none of the above Question 21 Consider the following graph of sales.

Which of the following characteristics is exhibited by the data? Answer Trend only Trend plus seasonal Cyclical only None of the above Question 22 __________ is the difference between the forecast and actual demand. Answer Forecast mistake Forecast error MAD Forecast accuracy Question 23 __________ is absolute error as a percentage of demand. Answer Cumulative error MAD MAPD Average error 5 points Question 24 Coefficient of determination is the percentage of the variation in the __________ variable that results from the __________ variable. Answer dependent, dependent independent, dependent dependent, independent independent, independent Question 25 A fair die is rolled 8 times. What is the probability that an even number (2,4, 6) will occur between 2 and 4 times? Round your answer to four places after the decimal. Answer Question 26 The drying rate in an industrial process is dependent on many factors and varies according to the following distribution. Compute the mean drying time. Use two places after the decimal. Answer Question 27 An online sweepstakes has the following payoffs and probabilities. Each person is limited to one entry.

The probability of winning at least $1,000.00 is ________. Answer Question 28 A life insurance company wants to estimate their annual payouts. Assume that the probability distribution of the lifetimes of the participants is approximately a normal distribution with a mean of 68 years and a standard deviation of 4 years. What proportion of the plan recipients would receive payments beyond age 75? Round your answer to four places after the decimal. Answer 0.0401 Question 29 Consider the following decision tree.

What is the expected value at node 4? Round your answer to the nearest whole number. Do not include the dollar sign $ in your answer.

Answer Question 30 The local operations manager for the IRS must decide whether to hire 1, 2, or 3 temporary workers. He estimates that net revenues will vary with how well taxpayers comply with the new tax code. The following payoff table is given in thousands of dollars (e.g. 50 = $50,000).

If he uses the maximin criterion, how many new workers will he hire? Answer Question 31 Given the following random number ranges and the following random number sequence: 62, 13, 25, 40, 86, 93, determine the average demand for the following distribution of demand. Demand Random Number Ranges 5 00-14 6 15-44 7 45-69 8 70-84 9 85-99 Correct answer: 7 Question 32 Given the following data, compute the MAD for the forecast. Year Demand Forecast 2001 16 18 2002 20 19 2003 18 24 Answer Question 33 Given the following data on the number of pints of ice cream sold at a local ice cream store for a 6-period time frame:

Compute a 3-period moving average for period 4. Use two places after the decimal. Answer Question 34 The following data summarizes the historical demand for a product. Month Actual Demand March 20 April 25 May 40 June 35 July 30

August 45

Use exponential smoothing with = .2 and the smoothed forecast for July is 32. Determine the smoothed forecast for August. Answer Question 35 Given the following data on the number of pints of ice cream sold at a local ice cream store for a 6-period time frame:

Compute a 3-period moving average for period 6. Use two places after the decimal. Answer Question 36 The following sales data are available for 2003-2008 : Year Sales Forecast 2003 7 9 2004 12 10 2005 14 15 2006 20 22 2007 16 18 2008 25 21

Calculate the absolute value of the average error. Use three significant digits after the decimal. Answer Question 37 The following data summarizes the historical demand for a product Month Actual Demand March 20 April 25 May 40 June 35 July 30 August 45

If the forecasted demand for June, July and August is 32, 38 and 42, respectively, what is MAPD? Write your answer in decimal form and not in percentages. For example, 15% should be written as 0.15. Use three significant digits after the decimal.

Answer Question 38 Consider the following annual sales data for 2001-2008. Year Sales 2001 2 2002 4 2003 10 2004 8 2005 14 2006 18 2007 17 Correct answer 0.9655 Question 39 Robert wants to know if there is a relation between money spent on gambling and winnings.

What is the coefficient of determination? Note: please report your answer with 2 places after the decimal point. Answer Question 40 The following sales data are available for 2003-2008.

Determine a 4-year weighted moving average forecast for 2009, where weights are W1 = 0.1, W2 = 0.2, W3 = 0.2 and W4 = 0.5. Answer