Course Introduction
Management Science Review
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Management Science is an interdisciplinary course that focuses on the application of quantitative analysis, mathematical modeling, and analytical methods to aid decision-making in organizational settings. Students learn how to identify, structure, and solve complex managerial problems using techniques such as linear programming, simulation, decision analysis, forecasting, and optimization. The course emphasizes both theoretical foundations and practical applications, equipping students with the skills to use data-driven approaches for effective resource allocation, strategic planning, and operational efficiency across various industries.
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Business Analytics 1st Edition by James R. Evans
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Page 2
Chapter 1: Introduction to Business Analytics
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Q1) Data used in business analytics need to be reliable and valid.Explain.
Answer: Sample data do not always reflect reality.People do not always behave the same when observed, nor do they always act as they say they act.Poor data can result in poor decisions.Hence, care must be taken when working with data, and every effort should be made to ensure that data are sufficiently accurate.
Q2) If D is demand, P is the unit price, and c and d are constants (where d > 0 is the price elasticity), which of the following is a nonlinear demand prediction model?
A)D = d + (c × P)
B)D = (d × P)
C)D = c × P
D)D = cP
Answer: D
Q3) What is the slope of the sales function D = a - bP?
A)4
B)9
C)12
D)17
Answer: C
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Chapter 2: Analytics on Spreadsheets
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Sample Questions
Q1) Which of the following formulas is used to calculate the total studio recording cost?
A)=SUM(B6:B12)-B10
B) (B6+B7-B16)B12
C)B6+B7*B12
D)B6+B7*B12-B16
Answer: C
Q2) What is the Insert function in Excel?
Answer: The easiest way to locate a particular function is to select a cell and click on the Insert function button f , which can be found under the ribbon next to the formula bar and also in the Function Library group in the Formulas tab.You may either type in a description in the search field, such as "net present value," or select a category, such as "Financial," from the drop-down box.This feature is particularly useful if you know what function to use but are not sure of what arguments to enter because it will guide you in entering the appropriate data for the function arguments.
Q3) In a MATCH function, the default value for match_type = 0.
A)True
B)False
Answer: False
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Chapter 3: Visualizing and Exploring Data
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Sample Questions
Q1) What is the relative frequency of Grade 3 employees?
A)4
B)0.55
C)0.20
D)5
Answer: C
Q2) Fewer groups provide a "coarse" histogram.
A)True
B)False
Answer: True
Q3) What is the cumulative relative frequency of Ranks 1 and 2?
A)0.80
B)0.15
C)0.30
D)0.25
Answer: A
Q4) AutoFilter creates filtering criteria based on the type of data being filtered.
A)True
B)False
Answer: True
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Chapter 4: Descriptive Statistical Measures
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Q1) State the three empirical rules in standard deviation.
Q2) In stock trading, the higher the coefficient of variation for the stock, the smaller the relative risk is for the return provided.
A)True
B)False
Q3) ________ is a measure of the linear relationship between two variables, X and Y, which does not depend on the units of measurement.
A)Kurtosis
B)Proportion
C)Skewness
D)Correlation
Q4) Which of the following is an example of a subset?
A)The number of individuals who have a Ford car
B)The number of IT employees out of all employees working in an office of Google
C)The number of members in the Democratic Party
D)The population of Canada
Q5) Two different sets of data can never have the same z-scores.
A)True
B)False
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Chapter 5: Probability Distributions and Data Modeling
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Q1) The exponential distribution:
A)has the density function f (x)= e , for x 0.
B)models the time between randomly occurring events.
C)has an expected value .
D)is described by the familiar bell-shaped curve.
Q2) What is a random number? How is it generated in Excel?
Q3) What is probability that neither X nor Y will occur?
A)\(\frac{29}{26}\)
B)\(\frac{1}{36}\)
C)\(\frac{28}{36}\)
D)\(\frac{21}{36}\)
Q4) What is the probability that profit will be less than $1,900?
Q5) Explain the similarity between the formulas for computing population mean and expected value of discrete random variable X.
Q6) What is the probability that the spinners land on colors summing up to exactly 3?
Q7) What is the probability that profit will be between $2,000 and $2,200?
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Chapter 6: Sampling and Estimation
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Q1) A ________ is a description of the approach that is used to obtain samples from a population prior to any data collection activity.
A)population frame
B)sampling weight
C)sampling plan
D)probability interval
Q2) Which of the following sampling methods bases its selection of samples on the ease of data collection?
A)probabilistic sampling
B)judgment sampling
C)simple random sampling
D)convenience sampling
Q3) Based on the data in the table above, calculate the margin of error at 95% confidence interval.
A)1.84
B)2.19
C)2.51
D)1.96
Q4) Give an account of biased and unbiased estimators in sampling methods.
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Chapter 7: Statistical Inference
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Q1) Which of the following is the conclusion?
A)This is a high probability and the conclusion is difficult.
B)The null hypothesis is rejected.
C)There are many sampling errors.
D)The null hypothesis cannot be rejected.
Q2) Which of the following is the initial step in conducting a hypothesis test?
A)collecting data and calculating a test statistic
B)selecting a level of significance
C)identifying the population parameter of interest
D)determining a decision rule
Q3) Which of the following is a valid one-sample hypothesis test?
A)H : population parameter constant vs.H : population parameter = constant
B)H : population parameter > constant vs.H : population parameter constant
C)H : population parameter < constant vs.H : population parameter constant
D)H : population parameter = constant vs.H : population parameter constant
Q4) In a two-sample test for means with the population variance being known, the z-test uses a test statistic that is based on the standard normal distribution.
A)True
B)False
Q5) Why is testing for independence important for businesses?
Page 9
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Chapter 8: Predictive Modeling and Analysis
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Q1) ________ is the term used by Risk Solver Platform for systematic methods of "what-if" study.
A)Scenario
B)Validity
C)Parametric sensitivity analysis
D)Goal Seek
Q2) Excel's Trendline feature cannot be used in modeling trends which include time variables.
A)True
B)False
Q3) In predictive modeling, validity refers to how well a model represents reality.
A)True
B)False
Q4) From the "what if" values, calculate the net profit when the demand is 65,000.
A)$825,000
B)$1,650,000
C)$800,000
D)$925,000
Q5) Give an account of how data is used in predictive models.
Q6) How can managers judge the validity of a model?
Page 10
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Chapter 9: Regression Analysis
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Q1) A(n)________ is an extreme value that is different from the rest of the data.
A)critical value
B)standard error
C)expected value
D)outlier
Q2) The best-fitting line maximizes the residuals.
A)True
B)False
Q3) Categorical variables that have been coded are called ________.
A)limited dependent variables
B)dummy variables
C)instrumental variables
D)observable variables
Q4) Which of the following is true about multicollinearity?
A)The effect of a dependent variable on another becomes difficult to isolate.
B)Regression coefficients become clearer and are easier to interpret.
C)P-values reduce significantly leading to rejection of null hypothesis.
D)It is best measured using the statistic variance inflation factor (VIF).
Q5) List the systematic approach to building good multiple regression models.
Q6) Interpret residual output.
11
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Chapter 10: Forecasting Techniques
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Q1) What will be the predicted sales for umbrellas for the month of February of the next quarter?
A)4530.19
B)4645.06
C)4883.76
D)4818.07
Q2) Using an appropriate Holt-Winters trend model, calculate the value of the mean absolute percentage error for the given data.
A)8.10
B)330.01
C)384.83
D)7.21
Q3) What is the formula used to calculate the value of at in the linear trend equation Ft k = at + btk while using double exponential smoothing?
A)a<sub>t </sub>= (b<sub>t</sub> - bt )+ (1 - )bt
B)a<sub>t</sub> = F<sub>t </sub> + (1 - ) (a<sub>t </sub>+ b<sub>t </sub>)
C)a<sub>t</sub> = F<sub>t</sub> + (1 - ) (a<sub>t </sub> + b<sub>t </sub>)
D)a<sub>t </sub>= (b<sub>t </sub>+ b<sub>t </sub>)+ (1 + )b<sub>t </sub>
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Chapter 11: Simulation and Risk Analysis
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Q1) Monte Carlo simulation is an inappropriate tool to analyze cash budgets because of the inherent uncertainty of the sales forecasts on which most cash budgets are based.
A)True
B)False
Q2) What is the value of mean profit?
A)$255.90
B)$251.45
C)$245.98
D)$264.00
Q3) What is the risk that the net present value over the 5 years will not be positive?
A)approximately 40%
B)approximately 57%
C)approximately 24%
D)approximately 76%
Q4) As Monte Carlo simulation is essentially statistical sampling, the larger the number of trials used, the more precise is the result.
A)True
B)False
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Chapter 12: Introduction to Data Mining
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Q1) The data mining approach called ________ involves the developing of analytic models to describe the relationship between metrics that drive business performance like profitability, customer satisfaction, or employee satisfaction.
A)association
B)reduction
C)cause-and-effect modeling
D)classification
Q2) Expected confidence assumes independence between the consequent and the antecedent.
A)True
B)False
Q3) The accuracy of the model on the test data gives a realistic estimate of the performance of the model on completely unseen data.
A)True
B)False
Q4) Briefly explain classification as a data-mining tool with an example.
Q5) Lagging and leading measures in cause-and-effect modeling are uncorrelated. A)True
B)False
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Chapter 13: Linear Optimization
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Q1) If the unit profit on Graystone surfboards is increased by $10, what is the shadow price for the finishing hours used?
A)18.48
B)17.39
C)15.42
D)14.15
Q2) What is the total profit generated?
A)$ 876.00
B)$ 675.50
C)$ 480.50
D)$ 965.00
Q3) The ________ indicates how much the value of the objective function will change as the right-hand side of a constraint is increased by 1.
A)objective coefficient
B)shadow price
C)binding constraint
D)reduced cost
Q4) What are the four possible outcomes that can be obtained by solving a linear optimization model?
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Chapter 14: Applications of Linear Optimization
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Q1) List out the different types of constraints that help model formulation.
Q2) According to the linear optimization model, which of the following departments uses all the time that it is allocated to finish its job?
A)assembly
B)painting
C)inspection
D)packaging
Q3) According to the linear optimization model, what is the net production for autumn?
A)200
B)500
C)450
D)50
Q4) When interpreting sensitivity analysis information for changes in model parameters, all other model parameters are held constant.
A)True
B)False
Q5) How does Excel's Solver help interpret reduced cost as shadow price for bounded variables?
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Chapter 15: Integer Optimization
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Sample Questions
Q1) What is the total number of 14-inch rolls produced?
A)721
B)725
C)726
D)740
Q2) Which of the following best defines a binary variable?
A)It is a general integer variable that is restricted to being between -1 and 1.
B)It is a general integer variable that is restricted to being a multiple of 2.
C)It is a general integer variable that is restricted to being between 0 and 1.
D)It is a general integer variable that is restricted to being greater than 2.
Q3) Which of the following constraints is used in Solver?
A)$F$16:$F$17 >= $F$6:$F$7
B)$B$20:$E$20 >= $B$10:$E$10
C)$B$18:$E$18 = binary
D)$J$16:$J$17 > = 0
Q4) Which of the following cells is set as the objective cell in Solver?
A)$G$12
B)$F$14
C)$G$14
D)$B$12
Page 17
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Chapter 16: Nonlinear and Non-Smooth Optimization
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Q1) According to the model, which of the following is the weighted distance between the phone charger and Testing cell?
A)7.00
B)17.50
C)22.50
D)27.50
Q2) According to the model, what is the cross-product value for Stock 2 variance?
A)0.00080
B)-0.00080
C)-0.00075
D)0.01132
Q3) According to the nonlinear model, which of the following is the projected sales figure for Gold tickets at the new price?
A)32
B)90
C)33
D)178
Q4) List the four major categories of inventory costs and explain how they are influenced by the timing of the ordering decision and amount ordered.
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Chapter 17: Optimization Models with Uncertainty
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Q1) What is the mean absolute deviation obtained from the simulation results?
A)3
B)6
C)8
D)10
Q2) Which of the following cells is defined as the output cell?
A)B16
B)G16
C)G17
D)G18
Q3) What is the value of mean obtained from the simulation results?
A)15.65
B)25.91
C)20.78
D)30.42
Q4) What is the reorder point required to attain a 95% service level?
A)460.0
B)750.5
C)571.0
D)640.5
Page 19
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Chapter 18: Decision Analysis
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Q1) What is the value of mean obtained from the simulation results? [Hint: Choose the approximate value.]
A)$ 119.0
B)$ 116.1
C)$ 105.7
D)$ 94.4
Q2) What is the worst payoff rate for the 5-year ARM?
A)$ 50,894
B)$ 48,134
C)$ 51,641
D)$ 55,895
Q3) A children's welfare fundraiser involves selling one thousand $70 tickets to win a $20,000 grand prize.If the probability of winning is only 0.005, what is the expected payoff?
A)-$40
B)-$50
C)$30
D)$60
Q4) Describe the steps involved in the construction of a decision tree.
Q5) What is the expected value of sample information?
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