Advanced Business Analytics
Exam Answer Key
Course Introduction
Advanced Business Analytics explores the application of quantitative and computational techniques to solve complex business problems and support data-driven decision-making. The course covers advanced topics such as predictive modeling, data mining, machine learning, optimization, and data visualization. Students will learn to leverage large datasets, implement analytical methods using industry-standard tools, and interpret results to guide strategic business actions. Emphasis is placed on hands-on experience with real-world business cases, enabling students to develop the technical proficiency and critical thinking skills necessary for leadership roles in analytics-driven organizations.
Recommended Textbook
Business Analytics Data Analysis and Decision Making 5th Edition by S. Christian Albright
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Chapter 1: Introduction to Data Analysis and Decision Making
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Sample Questions
Q1) Dealing with uncertainty includes measuring uncertainty and modeling uncertainty explicitly into the analysis.
A)True
B)False
Answer: True
Q2) When we use simulation models to help make decisions,we do not deal with uncertainty at all,since we often must make inferences from the simulated data.
A)True
B)False
Answer: False
Q3) Which of the following statements are false?
A) The modeling process discussed in Data Analysis & Decision Making book is five-step process.
B) Dealing with uncertainty requires a basic understanding of probability.
C) Uncertainty is a key aspect of most business problems.
D) Data description and data inference are included under data analysis.
Answer: A
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Chapter 2:
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Sample Questions
Q1) Data can be categorized as cross-sectional or time series.
A)True
B)False
Answer: True
Q2) A histogram is based on binning the variable,which means putting the variable into discrete categories.
A)True
B)False
Answer: True
Q3) As a measure of variability,what is defined as the maximum value minus the minimum value?
A) variance
B) standard deviation
C) mean
D) range
E) median
Answer: D
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Chapter 3: Finding Relationships Among Variables
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Sample Questions
Q1) Changing the location of fields in a pivot table is known as
A) slicing
B) dicing
C) sorting
D) pivoting
Answer: D
Q2) The four areas of a pivot table are
A) Crosstabs,Fields,Rows,Columns
B) Data,Count,Contingency,Percentage
C) Filters,Rows,Columns,Values
D) Sort,Rows,Columns,Count
Answer: C
Q3) The Excel function that allows you to count using more than one criterion is
A) COUNTIF
B) COUNTIFS
C) SUMPRODUCT
D) VLOOKUP
E) HLOOKUP
Answer: B
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Chapter 4: Probability and Probability Distributions
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Sample Questions
Q1) The law of large numbers states that subjective probabilities can be estimated based on the long run relative frequencies of events
A)True
B)False
Q2) If P(A)= 0.25 and P(B)= 0.65,then P(A and B)is:
A) 0.25
B) 0.40
C) 0.90
D) Cannot be determined from the information given
Q3) If A and B are two independent events with P(A)= 0.20 and P(B)= 0.60,then P(A and B)= 0.80
A)True
B)False
Q4) The probability that event A will not occur is denoted as \(P ( \bar { A } )\).
A)True B)False
Q5) If P(A and B)= 1,then A and B must be collectively exhaustive. A)True
B)False
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Chapter 5: Normal, Binomial, Poisson, and Exponential
Distributions
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Sample Questions
Q1) If we plot a continuous probability distribution f(x),the total probability under the curve is
A) -1
B) 0
C) 1
D) 100
Suppose that the number of customers arriving each hour at the only checkout counter at a local convenience store is approximately Poisson distributed with an expected arrival rate of 30 customers per hour.Let X represent the number of customers arriving per hour.The probabilities associated with X are shown below.
P(X < 5)= 0.0000,P(X < 10)= 0.0000,P(X < 15)= 0.0009,
P(X < 20)= 0.0219,P(X < 25)= 0.1572,P(X < 30)= 0.4757
P(X = 30)= 0.0726,P(X = 31)= 0.0703,P(X = 32)= 0.0659, P(X = 33)= 0.0599,P(X = 34)= 0.0529,P(X = 35)= 0.0453
Q2) The variance of a binomial distribution for which n = 50 and p = 0.20 is 8.0.
A)True
B)False
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Chapter 6: Decision Making Under Uncertainty
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Sample Questions
Q1) In making decisions,we choose the decision with the largest expected monetary value.
A)True
B)False
Q2) Which of these sensitivity analysis charts is most useful in determining whether the optimal decision changes over the range of the input variable?
A) Strategy region chart
B) Tornado chart
C) Spider chart
D) All of these options
E) None of these options
Q3) The sensitivity of the expected value to changes in the input variables can be inferred from a spider chart by observing:
A) The height of the line above the horizontal axis for each variable
B) The length of the line for each variable
C) The slope of the line for each variable
D) The color of the line for each variable
E) None of these options
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Chapter 7: Sampling and Sampling Distributions
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Sample Questions
Q1) Which of the following statements are correct?
A) A point estimate is an estimate of the range of a population parameter
B) A point estimate is a single value estimate of the value of a population parameter
C) A point estimate is an unbiased estimator if its standard deviation is the same as the actual value of the population standard deviation
D) All of these options
Q2) Which of the following statements correctly describe estimation?
A) It is the process of inferring the values of known population parameters from those of unknown sample statistics.
B) It is the process of inferring the values of unknown sample statistics from those of known population parameters.
C) It is the process of inferring the values of known sample statistics from those of unknown population parameters.
D) It is the process of inferring the values of unknown population parameters from those of known sample statistics.
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Chapter 8: Confidence Interval Estimation
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Sample Questions
Q1) If you decrease the confidence level,the confidence interval .
A) decreases
B) increases
C) stays the same
D) may increase or decrease,depending on the sample data
Q2) The confidence interval for the population standard deviation s is centered at the point estimate,the sample standard deviation s.
A)True
B)False
Q3) From a sample of 500 items,30 were found to be defective.The point estimate of the population proportion defective will be:
A) 0.06
B) 30.0
C) 16.667
D) None of the above
Q4) In general,increasing the confidence level will narrow the confidence interval,and decreasing the confidence level widens the interval.
A)True
B)False
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Chapter 9: Hypothesis Testing
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Sample Questions
Q1) The test statistic employed to test \(H _ { 0 } : \sigma _ { 1 } ^ { 2 } / \sigma _ { 2 } ^ { 2 } = 1 \text { is } F = s _ { 1 } ^ { 2 } / s _ { 2 } ^ { 2 }\) ,which is F distributed with \(n _ { 1 } - 1 \text { and } n _ { 2 } - 1\) degrees of freedom.
A)True
B)False
Q2) One-tailed alternatives are phrased in terms of: A) ?
B) < or >
C) =
D)
\(\leq \text { or } \geq\)
Q3) The power of a test is the probability that we
A) reject the null hypothesis when the alternative hypothesis is false
B) reject the null hypothesis when the alternative hypothesis is true
C) accept the null hypothesis when the alternative hypothesis is false
D) accept the null hypothesis when the alternative hypothesis is true
Q4) A Q-Q plot can be used to test for normality.
A)True
B)False
Page 11
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Chapter 10: Regression Analysis: Estimating Relationships
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Sample Questions
Q1) In a nonlinear transformation of data,the Y variable or the X variables may be transformed,but not both.
A)True
B)False
Q2) A correlation value of zero indicates.
A) a strong linear relationship
B) a weak linear relationship
C) no linear relationship
D) a perfect linear relationship
Q3) The weakness of scatterplots is that they:
A) do not help identify linear relationships
B) can be misleading about the types of relationships they indicate
C) only help identify outliers
D) do not actually quantify the relationships between variables
Q4) In linear regression,the fitted value is the:
A) predicted value of the dependent variable
B) predicted value of the independent value
C) predicted value of the slope
D) predicted value of the intercept
E) None of these options
Page 12
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Chapter 11: Regression Analysis: Statistical Inference
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Sample Questions
Q1) The ANOVA table splits the total variation into two parts.They are the
A) acceptable and unacceptable variation
B) adequate and inadequate variation
C) resolved and unresolved variation
D) explained and unexplained variation
Q2) Forward regression:
A) begins with all potential explanatory variables in the equation and deletes them one at a time until further deletion would do more harm than good.
B) adds and deletes variables until an optimal equation is achieved.
C) begins with no explanatory variables in the equation and successively adds one at a time until no remaining variables make a significant contribution.
D) randomly selects the optimal number of explanatory variables to be used
Q3) The term autocorrelation refers to:
A) analyzed data refers to itself
B) sample is related too closely to the population
C) data are in a loop (values repeat themselves)
D) time series variables are usually related to their own past values
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Chapter 12: Time Series Analysis and Forecasting
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Sample Questions
Q1) Holt's method is an exponential smoothing method,which is appropriate for a series with seasonality and possibly a trend.
A)True
B)False
Q2) The components of a time series include:
A) base series
B) trend
C) seasonal component
D) cyclic component
E) all of these options
Q3) Correlogram is a bar chart of autocorrelation at different lags.
A)True
B)False
Q4) When using the moving average method,you must select which represent(s)the number of terms in the moving average.
A) a smoothing constant
B) the explanatory variables
C) an alpha value
D) a span
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Chapter 13: Introduction to Optimization Modeling
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Sample Questions
Q1) Suppose a liquor store sells beer for a net profit of $1 per unit and wine for a net profit of $2 per unit.Let x equal the amount of beer sold and y equal the amount of wine sold.An algebraic formulation of the profit function is:
A)
\(\min ( x + 2 y )\)
B)
\(\min ( 2 x + y )\)
C)
\(\max ( x + 2 y )\)
D)
\(\max ( 2 x + y )\)
Q2) The solution of a linear programming problem using Microsoft Excel typically involves the following three stages:
A) formulating the problem,invoking Solver,and sensitivity analysis
B) formulating the problem,graphing the problem,and sensitivity analysis
C) the changing cells,the target cells,and the constraints
D) the inputs,the changing cells,and the outputs
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Chapter 14: Optimization Models
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Sample Questions
Q1) Which of the following is not a required input for a typical transportation problem?
A) Capacities (or supplies)
B) Demands
C) Unit shipping (and possibly production)costs
D) Distance from origins to destinations
Q2) In aggregate planning models,we can model backlogging of demand by allowing a month's inventory to be negative.
A)True
B)False
Q3) A minimum cost network flow model (MCNFM)has the following advantage relative to the special case of a simple transportation model:
A) a MCNFM does not require capacity restrictions on the arcs of the network
B) the flows in a general MCNFM don't all necessarily have to be from supply locations to demand locations
C) a MCNFM is generally easier to formulate and solve
D) All of these options
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Chapter 15: Introduction to Simulation Modeling
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Sample Questions
Q1) The "building blocks" of all spreadsheet simulation models are:
A) deterministic inputs
B) random numbers between 0 and 1
C) decision variables
D) probability distributions
Q2) Which of the following statements are true?
A) A probability distribution is symmetric (around some point)if the distribution to the left of the point is a mirror image of the distribution to the right of the point.
B) We say a distribution is skewed to the right (or positively skewed)if the "longer tail" is the right tail.
C) We say a distribution is skewed to the left (or negatively skewed)if the "longer tail" is the left tail.
D) All of the above
Q3) Excel's built-in functions,along with the RAND function,can be used to generate random numbers from many different types of probability distributions.
A)True
B)False
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Chapter 16: Simulation Models
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Sample Questions
Q1) In financial simulation models,the value at risk (VAR)is the 5<sup>th</sup> percentile of an output distribution,and it indicates nearly the worst possible outcome.
A)True
B)False
Q2) Does the answer to Question 72 match your intuition? Explain why or why not. In this example we are estimating the net present value of introducing a new drug to market.We have the following information about the market:
· The market size is 1,000,000 and is projected to grow at an average 5%,with a standard deviation of 1%,over the next ten years.
· The market share captured at entry is projected to be between 20% and 70%,with most likely value 40%.
· Three competitors may enter the market in the future,with each one having a 40% probability of entry per year.
· For each new competitor per year,the market share goes down by 20%.
· The marginal profit per unit is $1.80.
· We want to evaluate the project over ten years,using a discount rate of 10%.
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Chapter 17: Data Mining
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Sample Questions
Q1) Segmentation is also known as clustering,and involves trying to group entities into similar clusters.
A)True
B)False
Q2) Mya is investigating the factors that impact soda consumption.She examines a host of variables that help explain the amount consumed.Which type of data mining methodology is she most likely to use?
A) Market basket analysis
B) Prediction
C) Classification analysis
D) Forecasting
Q3) A facts table has:
A) few rows and many columns
B) many rows and many columns
C) many rows and few columns
D) few rows and few columns
Q4) Clustering is considered a supervised data mining technique.
A)True
B)False
Q5) What does the pivot table indicate about spending habits?
Page 19
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Chapter 18: Importing Data Into Excel
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Sample Questions
Q1) Text file extensions end with:
A) *·.prn,*·txt *·xls
B) *·prn,*·txt *·csv
C) *·prn,*·txt *·doc
D) *·prn,*·txt *·jpg
Q2) Megan is currently working in a text file that contains a space as a delimiter.She is concerned because proper names,such as Alice Brown,should be considered one value,not two.How should these values appear in the text file to avoid being separated into two values when imported into Excel?
A) They should be surrounded by double quotes,as in "Alice Brown."
B) There should be no space between proper names,as in "AliceBrown."
C) The import wizard automatically knows these proper names are one value.
D) They should be eliminated from the text file.
Q3) Real-world datasets usually do not require any cleansing because they do not contain missing data or typographical errors.
A)True
B)False
Q4) If you had imported the data using 'fixed width,' how would the output have changed?
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Chapter 19: Analysis of Variance and Experimental Design
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Sample Questions
Q1) In a one-way ANOVA test,we conclude there are differences across population means if the:
A) between variation is small relative to the within variation
B) between variation and within variation are equal
C) between variation is large relative to the within variation
D) between variation equals zero
Q2) What is one assumption of two-way ANOVA tests?
A) The distribution is not normal and the variances are different across combinations.
B) The distribution is normal and the variance at any particular combination is the same as any other combination.
C) The distribution is not normal and the variance at any particular combination is the same as any other combination.
D) The distribution is normal and the variances are different across combinations.
Q3) Suppose Mook Corp.was interested in running a two-way ANOVA.What other factors might you recommend they include in the test?
Q4) What does the ANOVA output in the accompanying figure indicate?
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Chapter 20: Statistical Process Control
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Sample Questions
Q1) The control limits for an R chart are set:
A) one mean distance from the average \(R\)
B) at -1 and +1
C) three standard deviations from the average \(R\)
D) at 0 and +1
Q2) The \(\bar { X }\) chart charts the averages of small subsamples through time.
A)True
B)False
Q3) Morgan decided the out-of-control behavior she observed might be due to the fact that she was using an extremely small sample.Therefore,she quadruples her sample size,and the sample is now much larger than even her original sample.Unfortunately,she forgets to adjust the upper and lower limits again to reflect the much larger sample size.What is likely to occur as she manually plots observations on the chart?
Q4) Common cause variation is the inherent variation in an in-control process.
A)True
B)False
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