Business Decision Making
Final Exam
Course Introduction
Business Decision Making explores the processes, tools, and analytical techniques that managers and leaders use to make informed organizational choices. This course covers the identification and evaluation of business problems, data-driven decision-making, and the application of quantitative and qualitative models to real-world scenarios. Students learn about risk assessment, forecasting, cost-benefit analysis, group decision dynamics, and ethical implications of business decisions. Emphasis is placed on practical application through case studies and projects, equipping students with the critical thinking and problem-solving skills necessary for effective business leadership.
Recommended Textbook
Basic Business Statistics Concepts and Applications 12th Edition by Mark L. Berenson
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Chapter 1: Introduction
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Sample Questions
Q1) The amount of time a student spent studying for an exam will be measured on a ratio scale.
A)True
B)False
Answer: True
Q2) Researchers are concerned that the weight of the average American school child is increasing implying, among other things, that children's clothing should be manufactured and marketed in larger sizes. If X is the weight of school children sampled in a nationwide study, then X is an example of
A) a categorical random variable.
B) a discrete random variable.
C) a continuous random variable.
D) a parameter.
Answer: C
Q3) The amount of alcohol consumed by a person per week is an example of a continuous variable.
A)True
B)False
Answer: True
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Chapter 2: Organizing and Visualizing Data
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Sample Questions
Q1) You have collected data on the approximate retail price (in $) and the energy cost per year (in $) of 15 refrigerators. Which of the following is the best for presenting the data?
A) A pie chart
B) A scatter plot
C) A side-by-side bar chart
D) A contingency table
Answer: B
Q2) Referring to Table 2-12, if the sample is a good representation of the population, we can expect ________ percent of the females in the population will not be against the plan.
Answer: 88.46% or (36.54 + 51.92)
Q3) Referring to Table 2-13, if a relative frequency or percentage distribution for the detergent data is constructed, using "9.0 but less than 10.0 gallons" as the first class, what percentage of drive-through car wash operations use at least 10 gallons but less than 13 gallons of detergent in a day?
Answer: 80%
Q4) Referring to Table 2-12, ________ percent of the 200 were males.
Answer: 48%
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Chapter 3: Numerical Descriptive Measures
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Sample Questions
Q1) In a perfectly symmetrical bell-shaped "normal" distribution
A) the arithmetic mean equals the median.
B) the median equals the mode.
C) the arithmetic mean equals the mode.
D) All the above.
Answer: D
Q2) You were told that the 1 , 2 and 3 quartiles of female students' weight at a major university are 95 lbs, 125 lbs, and 138 lbs. What percentage of the students weigh between 95 and 138 lbs?
Answer: 50 percent
Q3) According to the empirical rule, if the data form a "bell-shaped" normal distribution, ________ percent of the observations will be contained within 2 standard deviations around the arithmetic mean.
A) 68.26
B) 88.89
C) 93.75
D) 95.44
Answer: D
Q4) Referring to Table 3-5, construct a boxplot for the rate of return.
Answer: 11ea2ff8_fce8_793c_b1b9_8139b8d00296_TB1602_00
Page 5
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Chapter 4: Basic Probability
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Q1) A new model car from Ford Motor Company offers a keyless entry system that utilizes a four-letter code. How many different possible combinations are there for the code?
Q2) Referring to Table 4-9, if a company is selected at random, what is the probability that the company is small to mid-sized and did not offer stock options to their board members?
Q3) Referring to Table 4-2, the events "Did Well on Midterm" and "Did Poorly on Midterm" are
A) dependent.
B) mutually exclusive.
C) collective exhaustive.
D) All of the above.
Q4) Referring to Table 4-11, if an adult is selected at random, what is the probability that he/she is a registered voter who does not prefer to get his/her current information from the Internet?
Q5) A debate team of 4 is to be chosen from a class of 35. There are two twin brothers in the class. How many possible ways can the team be formed which will include both of the twin brothers?
Q6) Referring to Table 4-7, the probability that you win any money is ________.
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Chapter 5: Discrete Probability Distributions
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Q1) Referring to Table 5-5, what is the probability out of the 8 new cars it just received that, when each is tested, no more than half of the cars have nondefective radios?
Q2) Referring to Table 5-6, what is the probability that any particular shift being inspected has produced 4.0 bad bulbs.
Q3) From an inventory of 48 new cars being shipped to local dealerships, corporate reports indicate that 12 have defective radios installed. Which of the following distributions would you use to determine the probability that out of the 8 new cars it just received that, when each is tested, no more than 2 of the cars have defective radios?
A) Hypergeometric distribution
B) Poisson distribution
C) Uniform distribution
D) Binomial distribution
Q4) Referring to Table 5-8, if you decide to choose Design A for half of the production lines and Design B for the other half, what is your expected profit?
Q5) Referring to Table 5-8 if you decide to choose Design A for 70% of the production lines and Design B for the remaining production lines, what is the risk of your investment?
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Chapter 6: The Normal Distribution and Other Continuous
Distributions
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Sample Questions
Q1) Referring to Table 6-5, what is the probability that a randomly selected orange will contain between 4.5 and 5.2 ounces of juices?
Q2) If we know that the length of time it takes a college student to find a parking spot in the library parking lot follows a normal distribution with a mean of 3.5 minutes and a standard deviation of 1 minute, 75.8% of the college students will take more than how many minutes when trying to find a parking spot in the library parking lot?
A) 2.8 minutes
B) 3.2 minutes
C) 3.4 minutes
D) 4.2 minutes
Q3) Referring to Table 6-2, the probability is 0.95 that John's commission from the jewelry store is at least how much in a given month?
Q4) Referring to Table 6-4, what is the average time between consecutive hits?
Q5) Given that X is a normally distributed random variable with a mean of 50 and a standard deviation of 2, find the probability that X is between 47 and 54.
Q6) Referring to Table 6-2, the probability is 0.25 that John's income as a waiter is no more than how much in a given month?
Page 8
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Chapter 7: Sampling and Sampling Distributions
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Sample Questions
Q1) Which of the following is true about the sampling distribution of the sample mean?
A) The mean of the sampling distribution is always .
B) The standard deviation of the sampling distribution is always .
C) The shape of the sampling distribution is always approximately normal.
D) All of the above are true.
Q2) Referring to Table 7-3, without doing the calculations, state in which of the following ranges the sample mean selling price is most likely to lie?
A) $113,000 - $115,000
B) $114,000 - $116,000
C) $115,000 - $117,000
D) $116,000 - $118,000
Q3) The amount of time required for an oil and filter change on an automobile is normally distributed with a mean of 45 minutes and a standard deviation of 10 minutes. A random sample of 16 cars is selected. What is the standard error of the mean?
Q4) The sampling process begins by locating appropriate data sources called
Q5) Coverage error results in a ________.
Q6) ________ results from the failure to collect data on all subjects in the sample.
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Chapter 8: Confidence Interval Estimation
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Sample Questions
Q1) Referring to Table 8-14, the report contains all the essential components for an ethical reporting of poll results.
A)True
B)False
Q2) A sample of 100 fuses from a very large shipment is found to have 10 that are defective. The 95% confidence interval would indicate that, for this shipment, the proportion of defective fuses is between 0 and 0.28.
A)True
B)False
Q3) Referring to Table 8-13, the sampling error of a 95% confidence interval estimate of the population proportion of managers who have caught salespeople listing a "strip bar" as a restaurant on an expense report is ________.
Q4) Referring to Table 8-13, construct a 95% confidence interval estimate of the population proportion of managers who have caught salespeople cheating on an expense report.
Q5) Referring to Table 8-3, the mean of the sample is ________, while the standard deviation of the sample is ________.
Q6) Referring to Table 8-2, the confidence interval goes from ________ to ________.
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Chapter 9: Fundamentals of Hypothesis Testing:
One-Sample Tests
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Sample Questions
Q1) Referring to Table 9-4, if the level of significance had been chosen as 0.05, the company would market the new anesthetic.
A)True
B)False
Q2) The statement of the null hypothesis always contains an equality.
A)True
B)False
Q3) A manager of the credit department for an oil company would like to determine whether the mean monthly balance of credit card holders is equal to $75. An auditor selects a random sample of 100 accounts and finds that the mean owed is $83.40 with a sample standard deviation of $23.65. If you wanted to test whether the mean balance is different from $75 and decided to reject the null hypothesis, what conclusion could you reach?
A) There is not evidence that the mean balance is $75.
B) There is not evidence that the mean balance is not $75.
C) There is evidence that the mean balance is $75.
D) There is evidence that the mean balance is not $75.
Q4) Referring to Table 9-4, the value of the test statistic is ________.
Q6) Referring to Table 9-7, state the alternative hypothesis for this study. Page 11
Q5) Referring to Table 9-8, state the alternative hypothesis for this study.
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Chapter 10: Two-Sample Tests
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Sample Questions
Q1) F tests are one-tail tests.
A)True
B)False
Q2) Referring to Table 10-15, what additional assumption is needed for the test to be valid?
A) The two sample sizes have to be equal.
B) The two population sizes have to be equal.
C) The two population means have to be the same.
D) The population distributions of the two annual salaries have to be normal.
Q3) Referring to Table 10-8, to determine if a difference exists in the taste preferences of men and women, give the correct alternative hypothesis that Pepsi would test.
A) H : M - F 0
B) H : M - F > 0
C) H : M - F 0
D) H : M - F = 0
Q4) For all two-sample tests, the sample sizes must be equal in the two groups.
A)True
B)False
Q5) Referring to Table 10-5, the calculated value of the test statistic is ________.
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Chapter 11: Analysis of Variance
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Q1) Referring to Table 11-7, the randomized block F test is valid only if there is no interaction between the diameters of the 4 brands of bubble gums and the 4 ability of the students.
A)True
B)False
Q2) Referring to Table 11-2, the p-value of the test statistic for Levene's test for homogeneity of variances is A) 0.25.
B) 0.64.
C) 0.86.
D) 3.49.
Q3) Referring to Table 11-6, what are the degrees of freedom of the F test statistic for testing the block effects?
Q4) Referring to Table 11-6, the decision made at a 0.01 level of significance on the F test for the block effects implies that the blocking has been advantageous in reducing the experiment error.
A)True
B)False
Q5) Referring to Table 11-3, the among group variation or SSA is ________.
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Chapter 12: Chi-Square Tests and Nonparametric Tests
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Sample Questions
Q1) Referring to Table 12-16, which is the appropriate test to use?
A) X²-test of independence
B) McNemar test
C) Wilcoxon rank sum test
D) X²-test of population variance
Q2) Referring to Table 12-4, the critical value of the test statistic at 1% level of significance is
A) 7.7794.
B) 13.2767.
C) 20.0902.
D) 23.2093.
Q3) Referring to Table 12-13, if there is no connection between weights and average number of hours spent watching TV, we should expect how many children to be spending no more than 6 hours on average watching TV and are more than 10 lbs. underweight?
A) 5.8
B) 6.2
C) 8
D) 12
Q4) Referring to Table 12-7, the value of the test statistic is ________.
Page 15
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Chapter 13: Simple Linear Regression
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Q1) Referring to Table 13-12, the degrees of freedom for the F test on whether the number of load applications recorded affects the amount of time are
A) 1, 28.
B) 1, 29.
C) 28, 1.
D) 29, 1.
Q2) Referring to Table 13-11, the normality of error assumption appears to have been violated.
A)True
B)False
Q3) Referring to Table 13-10, the value of the t test statistic and F test statistic should be the same when testing whether the number of customers who make purchases is a good predictor for weekly sales.
A)True
B)False
Q4) Referring to Table 13-3, suppose the director of cooperative education wants to construct a 95% prediction interval for the number of job offers received by a student who has had exactly two cooperative education jobs. The t critical value she would use is
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Chapter 14: Introduction to Multiple Regression
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Q1) Referring to Table 14-17 Model 1, which of the six independent variables (Age, Edu, Job Yr, Married, Head and Manager) is (are) insignificant in affecting the dependent variable using a 5% level of significance after taking into account the effect of the remaining independent variables?
Q2) Referring to Table 14-10, the 99% confidence interval for the change in mean insurance premiums of a person who has become 1 year older (i.e., the slope coefficient for AGE) is ?-0.82 ± ________.
Q3) Referring to Table 14-18, what should be the decision ('reject' or 'do not reject') on the null hypothesis when testing whether SAT makes a significant contribution to the model in the presence of the other independent variables at a 0.05 level of significance?
Q4) Referring to Table 14-7, the department head wants to test H : = = 0. The appropriate alternative hypothesis is ________.
Q5) Referring to Table 14-19, what should be the decision ('reject' or 'do not reject') on the null hypothesis when testing whether Attitude makes a significant contribution to the model in the presence of the other independent variables at a 0.05 level of significance?
Q6) Referring to Table 14-15, what is the standard error of estimate?
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Chapter 15: Multiple Regression Model Building
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Q1) Referring to Table 15-4, the quadratic effect of daily average of the percentage of students attending class on percentage of students passing the proficiency test is not significant at a 5% level of significance.
A)True
B)False
Q2) Referring to Table 15-6, what is the value of the Mallow's Cp statistic for the model that includes all the six independent variables?
Q3) Referring to Table 15-6, the model that includes X , X , X and X should be among the appropriate models using the Mallow's Cp statistic.
A)True
B)False
Q4) Referring to Table 15-5, what is the value of the variance inflationary factor of SUV?
Q5) Referring to Table 15-6, what is the value of the Mallow's Cp statistic for the model that includes X , X , X and X ?
Q6) Referring to Table 15-6, what is the value of the Mallow's Cp statistic for the model that includes X , X , X , X and X ?
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Chapter 16: Time-Series Forecasting
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Q1) Referring to Table 16-13, you can reject the null hypothesis for testing the appropriateness of the second-order autoregressive model at the 5% level of significance.
A)True
B)False
Q2) Referring to Table 16-10, the value of the MAD for the second-order autoregressive model is ________.
Q3) The effect of an unpredictable, rare event will be contained in the ________ component.
A) trend
B) cyclical
C) irregular
D) seasonal
Q4) Referring to Table 16-8, the forecast for profits in 2010 is ________.
Q5) Referring to Table 16-5, the number of arrivals will be exponentially smoothed with a smoothing constant of 0.1. Then the forecast for the seventh Monday will be ________.
Q6) Referring to Table 16-10, the residuals for the second-order autoregressive model are ________, ________, ________, and ________.
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Chapter 17: Statistical Applications in Quality Management
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Sample Questions
Q1) Cpk > 1 indicates that the process average is exactly 3 standard deviations away from the closest specification limit.
A)True
B)False
Q2) Which famous statistician developed the 14 points of quality?
A) Shewhart
B) Deming
C) Chebyshev
D) Taguchi
Q3) CPL > 1 implies that the process mean is more than 3 standard deviation away from the lower specification limit.
A)True
B)False
Q4) Referring to Table 17-2, what is the numerical value of the center line for the p chart?
A) 0.53
B) 0.56
C) 0.63
D) 0.66
Q5) Referring to Table 17-4, what is the value of the CPL index?
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Chapter 18: A Roadmap for Analyzing Data
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Q1) Data on the amount of money made in a year by 1,000 families in a small town were collected. You want to know how much each family will get if the money made by all the 1,000 families is pooled together and then evenly redistributed back to them. Which of the following would you compute?
A) Arithmetic mean
B) Median
C) Interquartile range
D) Coefficient of correlation
Q2) A researcher randomly sampled 30 graduates, 18 males and 12 females, of an MBA program and recorded data concerning their starting salaries. Of primary interest to the researcher was the effect of gender on starting salaries. Statistics of the mean salaries of the females and males in the sample were computed. The sample standard deviations suggest that the variability of starting salaries of the two groups is almost the same. Suppose the starting salaries from both groups can be considered as normally distributed. Which of the following tests will be the most appropriate?
A) Pooled-variance t test
B) Separate-variance t test
C) Paired t test
D) Wilcoxon rank sum test
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Chapter 19: Questions that Involve Online Topics
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Q1) The Laspeyres price index has the disadvantage that the consumption pattern in the initial period might be quite different from that in the current period and, hence, does not reflect accurately the current consumption cost.
A)True
B)False
Q2) Referring to Table 9-3, if you select a sample of 25 new local anesthetics and are willing to have a level of significance of 0.05, the probability of the company failing to market the new local anesthetic when it is better is ________ if the population mean effective time is 8 minutes.
Q3) Removal of uncertainty from a decision-making problem leads to a case referred to as perfect information.
A)True
B)False
Q4) The Paasche price index is a form of unweighted aggregate price index.
A)True
B)False
Q5) Referring to Table 7-1, 80% of all the samples of 4 will have a sample mean of no more than how many hours from the population mean?
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