Business Analytics Exam Bank
Course Introduction
Business Analytics focuses on the systematic exploration of data to drive business decision-making and performance improvement. The course covers essential concepts including data collection, data management, statistical analysis, predictive modeling, and the use of specialized software tools. Students learn how to interpret complex data sets, identify trends, and transform insights into actionable strategies. Through case studies and real-world examples, the course demonstrates how business analytics supports decision-making in areas such as marketing, finance, operations, and human resources.
Recommended Textbook
Quantitative Methods for Business 12th Edition by David R. Anderson
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Page 2
Chapter 1: Introduction
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Q1) Frederick Taylor is credited with forming the first MS/OR interdisciplinary teams in the 1940's.
A)True
B)False
Answer: False
Q2) Uncontrollable inputs are the decision variables for a model.
A)True
B)False
Answer: False
Q3) Which of the following is not one of the commonly used names for the body of knowledge involving quantitative approaches to decision-making?
A)management science
B)business analytics
C)operations research
D)efficiency studies
Answer: D
Q4) The feasible solution is the best solution possible for a mathematical model.
A)True
B)False
Answer: False
Page 3
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Chapter 2: Introduction to Probability
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Q1) A mail order company tracks the number of returns it receives each day.Information for the last 50 days shows \[\begin{array} { c c }
\text { Number of returns } & \text { Number of days } \\ \hline 0 - 99 & 6 \\
100 - 199 & 20 \\
200 - 299 & 15 \\
300 \text { or more } & 9 \end{array}\]
a.How many sample points are there?
b.List and assign probabilities to sample points.
c.What procedure was used to assign these probabilities? Answer: a.4
b.P(0 - 99 returns)= .12
P(100 - 199 returns)= .40
P(200 - 299 returns)= .30
P(300 or more returns)= .18
c.Relative frequency method
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Chapter 3: Probability Distributions
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Q1) The weight of a .5 cubic yard bag of landscape mulch in uniformly distributed over the interval from 38.5 to 41.5 pounds.
a.Give a mathematical expression for the probability density function.
b.What is the probability that a bag will weigh more than 40 pounds?
c.What is the probability that a bag will weigh less than 39 pounds?
d.What is the probability that a bag will weigh between 39 and 40 pounds?
Answer: a.f(x)= 1/3
for 38.5 F1F1F1S1 F1F1F10 x F1F1F1S1 F1F1F10 41.5 = 0
otherwise
b..5000
c..1667
d..3333
Q2) If the Poisson distribution describes the number of occurrences per interval,the exponential distribution describes the length of the interval between occurrences.
A)True
B)False
Answer: True
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Chapter 4: Decision Analysis
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Q1) Why perform sensitivity analysis? Of what use is sensitivity analysis where good probability estimates are difficult to obtain?
Q2) A decision strategy is a sequence of decisions and chance outcomes,where the decisions chosen depend on the yet to be determined outcomes of chance events.
A)True
B)False
Q3) States of nature should be defined so that one and only one will actually occur.
A)True
B)False
Q4) States of nature
A)can describe uncontrollable natural events such as floods or freezing temperatures.
B)can be selected by the decision maker.
C)cannot be enumerated by the decision maker.
D)All of the alternatives are true.
Q5) Show how you would design a spreadsheet to calculate revised probabilities for two states of nature and two indicators.
Q6) Use a diagram to compare EVwPI,EVwoPI,EVPI,EVwSI,EVwoSI,and EVSI.
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Chapter 5: Utility and Game Theory
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Q1) When and why should a utility approach be followed?
Q2) The expected monetary value approach and the expected utility approach to decision making usually result in the same decision choice unless extreme payoffs are involved.
A)True
B)False
Q3) Explain how utility could be used in a decision where performance is not measured by monetary value.
Q4) For a game with an optimal pure strategy,which of the following statements is false?
A)The maximin equals the minimax.
B)The value of the game cannot be improved by either player changing strategies.
C)A saddle point exists.
D)Dominated strategies cannot exist.
Q5) A game has a saddle point when the maximin payoff value equals the minimax payoff value.
A)True
B)False
Q6) Explain the relationship between expected utility,probability,payoff,and utility.
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Chapter 6: Times Series Analysis and Forecasting
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Q1) Discuss the effects of using a small smoothing constant value and when it is most appropriate to use.Then,do the same for a large smoothing constant value.
Q2) The mean squared error is influenced much more by large forecast errors than is the mean absolute error.
A)True
B)False
Q3) The exponential smoothing forecast for any period is a weighted average of all the previous actual values for the time series.
A)True
B)False
Q4) The average SAT verbal score for students from one high school over the last ten exams is 508,490,502,505,493,506,492,490,503,501
Do the scores support an increasing or a decreasing trend?
Q5) The trend pattern is easy to identify by using
A)a moving average
B)exponential smoothing
C)regression analysis
D)a weighted moving average
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Chapter 7: Introduction to Linear Programming
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Sample Questions
Q1) Does the following linear programming problem exhibit infeasibility,unboundedness,or alternate optimal solutions? Explain.
\[\begin{array} { l l }
\text { Min } & 3 x + 3 y \\
\text { s.t. } & 1 x + 2 y \leq 16 \\ & 1 x + 1 y \leq 10 \\ & 5 x + 3 y \leq 45 \\ & x , y \geq 0
\end{array}\]
Q2) If there is a maximum of 4,000 hours of labor available per month and 300 ping-pong balls (x<sub>1</sub>)or 125 wiffle balls (x<sub>2</sub>)can be produced per hour of labor,which of the following constraints reflects this situation?
A)300x<sub>1</sub> + 125x<sub>2</sub> > 4,000
B)300x<sub>1</sub> + 125x<sub>2</sub> < 4,000
C)425(x<sub>1</sub> + x<sub>2</sub>) < 4,000
D)300x<sub>1</sub> + 125x<sub>2</sub> = 4,000
Q3) A redundant constraint is a binding constraint.
A)True
B)False
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Chapter 8: Linear Programming: Sensitivity Analysis and
Interpretation of Solution
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Q1) Relevant costs should be reflected in the objective function,but sunk costs should not. A)True
B)False
Q2) When the right-hand sides of two constraints are each increased by one unit,the objective function value will be adjusted by the sum of the constraints' dual prices. A)True
B)False
Q3) Output from a computer package is precise and answers should never be rounded. A)True
B)False
Q4) For any constraint,either its slack/surplus value must be zero or its dual price must be zero.
A)True B)False
Q5) How is sensitivity analysis used in linear programming? Given an example of what type of questions that can be answered.
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Chapter 9: Linear Programming Applications in Marketing, Finance,
and Operations
Management
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Q1) Let A,B,and C be the amounts invested in companies A,B,and C.If no more than 50% of the total investment can be in company B,then
A)B F1F1F1S1 F1F1F10 5
B)A F1F1F1S1 F1F1F10 .5B + C F1F1F1S1 F1F1F10 0
C).5A F1F1F1S1 F1F1F10 B F1F1F1S1 F1F1F10 .5C F1F1F1S1 F1F1F10 0
D)F1F1F1S1 F1F1F10.5A + .5B F1F1F1S1 F1F1F10 .5C F1F1F1S1 F1F1F10 0
Q2) A marketing research firm must determine how many daytime interviews (D)and evening interviews (E)to conduct.At least 40% of the interviews must be in the evening.A correct modeling of this constraint is: -0.4D + 0.6E > 0.
A)True
B)False
Q3) Media selection problems usually determine
A)how many times to use each media source.
B)the coverage provided by each media source.
C)the cost of each advertising exposure.
D)the relative value of each medium.
Q4) Portfolio selection problems should acknowledge both risk and return.
A)True
B)False
Page 11
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Chapter 10: Distribution and Network Models
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Q1) Is it a coincidence to obtain integer solutions to network problems? Explain.
Q2) Canning Transport is to move goods from three factories to three distribution centers.Information about the move is given below.Give the network model and the linear programming model for this problem. \[\begin{array} { c c | c c }
\text { Source } & \text { Supply } & \text { Destination } & \text { Demand } \\
\hline \text { A } & 200 & \mathrm { X } & 50 \\
\text { B } & 100 & \mathrm { Y } & 125 \\
\text { C } & 150 & Z & 125
\end{array}\] Shipping costs are: \[\begin{array} { c | c c c }
& &{ \text { Destination } } \\
\text { Source } & \mathrm { Y } & \mathrm { Y } & \mathrm { Z } \\
\hline \text { A } & 3 & 2 & 5 \\
\text { B } & 9 & 10 & - \\
\text { C } & 5 & 6 & 4 \\
&& \text { (Source B cannot ship to destination Z) }
\end{array}\]
Q3) Flow in a transportation network is limited to one direction.
A)True
B)False
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Chapter 11: Integer Linear Programming
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Q1) The solution to the LP Relaxation of a minimization problem will always be less than or equal to the value of the integer program minimization problem.
A)True
B)False
Q2) In a model,x<sub>1</sub> F1F1F1S1 F1F1F10 0 and integer,x<sub>2</sub> F1F1F1S1 F1F1F10 0,and x<sub>3</sub> = 0,1.Which solution would not be feasible?
A)x<sub>1</sub> = 5, x<sub>2</sub> = 3, x<sub>3</sub> = 0
B)x<sub>1</sub> = 4, x<sub>2</sub> = .389, x<sub>3</sub> = 1
C)x<sub>1</sub> = 2, x<sub>2</sub> = 3, x<sub>3</sub> = .578
D)x<sub>1</sub> = 0, x<sub>2</sub> = 8, x<sub>3</sub> = 0
Q3) Some linear programming problems have a special structure that guarantees the variables will have integer values.
A)True
B)False
Q4) The LP Relaxation contains the objective function and constraints of the IP problem,but drops all integer restrictions.
A)True
B)False
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Chapter 12: Advanced Optimization Applications
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Q1) Native Customs sells two popular styles of hand-sewn footwear: a sandal and a moccasin.The cost to make a pair of sandals is $18,and the cost to make a pair of moccasins is $24.The demand for these two items is sensitive to the price,and historical data indicate that the monthly demands are given by S = 400 F1F1F1S1 F1F1F10 10P<sub>1</sub> and M = 450 F1F1F1S1 F1F1F10 15P<sub>2 </sub>,where S = demand for sandals (in pairs),M = demand for moccasins (in pairs),P<sub>1</sub> = price for a pair of sandals,and P<sub>2</sub> = price for a pair of moccasins.To remain competitive,Native Customs must limit the price (per pair)to no more than $60 and $75 for its sandals and moccasins,respectively.Formulate this nonlinear programming problem to find the optimal production quantities and prices for sandals and moccasins that maximize total monthly profit.
Q2) Write a summary of the DEA approach and explain how you would interpret the solution.
Q3) Revenue management methodology enables an airline to maximize the number of full-fare seats it sells on each flight.
A)True
B)False
Q4) Explain the logic of a DEA model.On what basis can the facility being evaluated be judged as relatively inefficient?
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Chapter 13: Project Scheduling: Pertcpm
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Q1) The length of time an activity can be delayed without affecting the project completion time is the slack.
A)True
B)False
Q2) Three paths of a PERT network have these mean durations and variances in weeks: \[\begin{array} { c c c }
\hline \text { Path } & \begin{array} { c }
\text { Mean } \\
\text { Duration }
\end{array} & \text { Variance } \\
\hline 1 & 45 & 2.75 \\ 2 & 44 & 5.50 \\ 3 & 46 & 1.20 \\ \hline \hline
\end{array}\] Which path offers the greatest risk of overrunning a contract deadline of 48 weeks?
Q3) Explain how and why all successor activities must be considered when finding the latest finish time.
Q4) Why should projects be monitored after the critical path is found?
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Chapter 14: Inventory Models
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Q1) The Fitness Shop is considering ordering a special model exercise machine.Each unit will cost the shop $410 and it will sell for $750.Any units not sold at the regular price will be sold at the year-end model clearance for $340.Assume that demand follows a normal probability distribution with F1F1F1S1 F1F1F10 = 20 and F1F1F1S1 F1F1F10 = 6.What is the recommended order quantity?
Q2) Inventory
A)is held against uncertain usage so that a supply of items is available if needed. B)constitutes a small part of the cost of doing business.
C)is not something that can be managed effectively.
D)All of the alternatives are correct.
Q3) For the single-period inventory model with probabilistic demand,an order quantity smaller than the median demand is recommended when
A)c<sub>o</sub> < c<sub>u</sub>
B)c<sub>o</sub> > c<sub>u</sub>
C)c<sub>o </sub>/c<sub>u</sub> < 1
D)c<sub>o</sub> + c<sub>u</sub> < 1
Q4) What are the two most critical behaviors of an inventory system you need to recognize in order to apply the best model?
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Chapter 15: Waiting Line Models
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Q1) For an M/G/1 system with F1F1F1S1 F1F1F10 = 6 and F1F1F1S1 F1F1F10 = 9,with
F1F1F1S1 F1F1F10F1F1F1S1 F1F1F10 = .03,find
a.the probability the system is idle.
b.the average length of the queue.
c.the average number in the system.
Q2) In a multiple-channel system
A)each server has its own queue.
B)each server has the same service rate.
C)F1F1F1S1 F1F1F10 > F1F1F1S1 F1F1F10
D)All of the alternatives are correct.
Q3) During summer weekdays,boats arrive at the inlet drawbridge according to the Poisson distribution at a rate of 3 per hour.In a 2-hour period,
a.what is the probability that no boats arrive?
b.what is the probability that 2 boats arrive?
c.what is the probability that 8 boats arrive?
Q4) In a multiple-channel system it is more efficient to have a separate waiting line for each server.
A)True
B)False
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Chapter 16: Simulation
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Q1) Simulation is an excellent technique to use when a situation is too complicated to use standard analytical procedures.
A)True
B)False
Q2) Explain the difference between verification and validation as they relate to a simulation model.
Q3) The degree of risk is associated with the probability or magnitude of loss.
A)True
B)False
Q4) Greenfields is a mail order seed and plant business.The size of orders is uniformly distributed over the interval from $25 to $80.Use the following random numbers to generate the size of 10 orders.
.41\(\quad \) .99\(\quad \).07\(\quad \).05\(\quad \).38\(\quad \).77\(\quad \).19\(\quad \).12\(\quad \).58\(\quad \).60
Q5) For any waiting line system,(Average number of units in waiting line)= (Total waiting time)divided by (Total time of simulation).
A)True
B)False
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Chapter 17: Markov Processes
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Q1) All entries in a row of a matrix of transition probabilities sum to 1.
A)True
B)False
Q2) On any particular day an individual can take one of two routes to work.Route A has a 25% chance of being congested,whereas route B has a 40% chance of being congested. The probability of the individual taking a particular route depends on his previous day's experience.If one day he takes route A and it is not congested,he will take route A again the next day with probability .8.If it is congested,he will take route B the next day with probability .7.
On the other hand,if on a day he takes route B and it is not congested,he will take route B again the next day with probability .9.Similarly if route B is congested,he will take route A the next day with probability .6.
a.Construct the transition matrix for this problem. (HINT: There are 4 states corresponding to the route taken and the congestion. The transition probabilities are products of the independent probabilities of congestion and next day choice.)
b.What is the long-run proportion of time that route A is taken?
Q3) Where is a fundamental matrix,N,used? How is N computed?
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