Managerial Decision Making Test
Bank
Course Introduction
Managerial Decision Making explores the theories, processes, and tools that managers use to make effective decisions within organizations. The course covers rational and non-rational models of decision making, the impact of cognitive biases, the role of data and analytics, and strategies for dealing with uncertainty and risk. Students learn practical frameworks for structuring complex problems, evaluating alternatives, and implementing solutions while considering ethical, cultural, and organizational factors. Real-world case studies and simulations are utilized to enhance critical thinking and equip students with the skills to make sound managerial decisions in dynamic business environments.
Recommended Textbook
Applied Statistics in Business and Economics 5th Edition by David Doane
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17 Chapters
1953 Verified Questions
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Page 2
Chapter 1: Overview of Statistics
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Sample Questions
Q1) A business data analyst needs a PhD in statistics.
A)True
B)False
Answer: False
Q2) Which is not an ethical obligation of a statistician?
A)To know and follow accepted procedures
B)To ensure data integrity and accurate calculations
C)To support client wishes in drawing conclusions from the data
D)To acknowledge sources of financial support
Answer: C
Q3) Which is least likely to be an application where statistics will be useful?
A)Predicting whether an airfare is likely to rise or fall
B)Designing the most desirable features for a ski pass
C)Deciding whether offering Rice Krispies improves restaurant sales
D)Choosing the wording of a corporate policy prohibiting smoking
Answer: D
Q4) The science of statistics tells us whether the sample evidence is convincing.
A)True
B)False
Answer: True
Page 3
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Chapter 2: Data Collection
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Sample Questions
Q1) Categorical data have values that are described by words rather than numbers.
A)True
B)False
Answer: True
Q2) Sampling error is avoidable by choosing the sample scientifically.
A)True
B)False Answer: False
Q3) Temperature measured in degrees Fahrenheit is an example of interval data.
A)True
B)False
Answer: True
Q4) Ratio data are distinguished from interval data by the presence of a zero reference point.
A)True
B)False
Answer: True
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Chapter 3: Describing Data Visually
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Sample Questions
Q1) Students were asked to record how many hours they worked at an outside job last week. Their answers are shown below. (a) Make a dot plot. (b) Use your judgment to construct a frequency distribution using whatever classes (bins) you wish. (c) Make a histogram. (d) Describe the distribution. (e) Did your bin choices agree with Sturges' Rule? If not, why not?
Answer: \[\begin{array} { c c c c c }
2 & 17 & 10 & 37 & 49 \\
36 & 20 & 28 & 37 & 9 \\
50 & 45 & 24 & 0 & 9 \\
35 & 19 & 17 & 0 & 16 \\
47 & 32 & 14 & 23 & 50 \end{array}\] Dot plot suggests right-skewness. Sturges' Rule suggests 5 or 6 classes. Six classes of size 10 would work, though the two 50s are on the end of the top class.
Q2) We would use a pivot table to:
A)cross-tabulate frequencies of occurrence of two variables.
B)rotate the data around a central point.
C)establish cause-and-effect between X and Y.
D)display the data in a 3D scatter plot.
Answer: A
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Chapter 4: Descriptive Statistics
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Sample Questions
Q1) Twelve randomly chosen students were asked how many times they had missed class during a certain semester, with this result: 3, 2, 1, 2, 1, 5, 9, 1, 2, 3, 3, 10. The median is:
A)7.0.
B)3.0.
C)3.5.
D)2.5.
Q2) Which Excel function is designed to calculate z = (x - )/ for a column of data?
A)=STANDARDIZE
B)=NORM.DIST
C)=STDEV.P
D)=AVEDEV
Q3) Given a sample of three items (X = 4, 6, 5), which statement is incorrect?
A)The geometric mean is 5.2.
B)The standard deviation is 1.
C)The coefficient of variation is 20 percent.
D)The quartiles are useless.
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6
Chapter 5: Probability
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Q1) In a certain city, 5 percent of all drivers have expired licenses and 10 percent have an unpaid parking ticket. If these events are independent, what is the probability that a driver has both an expired license and an unpaid parking ticket?
A).010
B).005
C).001
D)Cannot be determined
Q2) If P(A B) = 0.50, can P(A) = 0.20?
A)Only if P(A | B) = 0.10
B)Not unless P(B) = 0.30
C)Only if P(B A) = 0.60
D)If P(A) = 0.20, then P(A B) cannot equal 0.50.
Q3) The general law of addition for probabilities says P(A or B) = P(A) + P(B) - P(A B).
A)True
B)False
Q4) A baseball player said, "Yes, I'm in a batting slump. But the law of averages has got to catch up sooner or later. I'm bound to improve." Discuss the logic of this statement.
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Chapter 6: Discrete Probability Distributions
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Sample Questions
Q1) Which distribution is most strongly right-skewed?
A)Binomial with n = 50, = .70
B)Binomial with n = 50, = .90
C)Binomial with n = 50, = .40
D)Binomial with n = 50, = .10
Q2) Which model best describes the number of births in a hospital until the first twins are delivered?
A)Binomial
B)Poisson
C)Hypergeometric
D)Geometric
Q3) Jankord Jewelers permits the return of their diamond wedding rings, provided the return occurs within two weeks. Typically, 10 percent are returned. If eight rings are sold today, what is the probability that fewer than three will be returned?
A).9950
B).9619
C).0331
D).1488
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Chapter 7: Continuous Probability Distributions
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Q1) The time required for a citizen to complete the 2010 U.S. Census "long" form is normally distributed with a mean of 40 minutes and a standard deviation of 10 minutes. What is the third quartile (in minutes) for the time required to complete the form?
A)44.75
B)46.75
C)47.50
D)52.50 Using Excel =NORM.INV(.75,40,10) = 46.75, or Q<sub>3</sub> = 40 + 0.675(10) = 46.75 using AppendixC.
Q2) In a continuous distribution:
A)P(X < 5) is the same as P(X 5).
B)P(X < 5) is less than P(X 5).
C)P(X < 5) is more than P(X 5).
Q3) The normal is a good approximation to the binomial when n is greater than or equal to 10.
A)True
B)False
Q4) The triangular distribution T(0, 10, 20) is skewed left.
A)True
B)False
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Chapter 8: Sampling Distributions and Estimation
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Sample Questions
Q1) In constructing a confidence interval for a mean with unknown variance with a sample of 25 items, Bob used z instead of t. "Well, at least my interval will be wider than necessary, so it was a conservative error," said he. Is Bob's statement correct?
A)Yes.
B)No.
C)It depends on .
Q2) Which statement is most nearly correct, other things being equal?
A)Doubling the sample size will cut the standard error of the mean in half.
B)The standard error of the mean depends on the population size.
C)Quadrupling the sample size roughly halves the standard error of the mean.
D)The standard error of the mean depends on the confidence level.
Q3) If = 12, find the sample size to estimate the mean with an error of ± 4 and 95 percent confidence (rounded to the next higher integer).
A)75
B)35
C)58
D)113
Q4) List differences and similarities between Student's t and the standard normal distribution.
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Chapter 9: One-Sample Hypothesis Tests
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Sample Questions
Q1) After lowering the landing gear, the pilot notices that the "gear down and locked" light is not illuminated. "It's probably just a burned out light bulb," she says, as she proceeds on final approach for landing. Considering the pilot's hypothesis, which is the result of Type I error?
A)The sound of metal scraping on concrete will be heard upon landing.
B)The landing is delayed unnecessarily while the bulb and gear are checked.
C)We cannot be sure without knowing whether or not the bulb is actually faulty.
Q2) For a given null hypothesis and level of significance, the critical value for a two-tailed test is greater than the critical value for a one-tailed test.
A)True
B)False
Q3) In a statistical test we:
A)try to reject the null hypothesis.
B)try to prove the alternative hypothesis.
C)choose a null hypothesis that is easy to reject.
D)choose a large level of significance if possible.
Q4) Why is it better to say "fail to reject H<sub>0</sub>" instead of "accept H<sub>0</sub>"?
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Page 11
Chapter 10: Two-Sample Hypothesis Tests
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Q1) During a test period, an experimental group of 10 vehicles using an 85 percent ethanol-gasoline mixture showed mean CO<sub>2</sub> emissions of 667 pounds per 1000 miles, with a standard deviation of 20 pounds. A control group of 14 vehicles using regular gasoline showed mean CO<sub>2</sub> emissions of 679 pounds per 1000 miles with a standard deviation of 15 pounds. At = 0.05, in a left-tailed test (assuming equal variances) the test statistic is:
A)-1.310
B)-2.042
C)-1.645
D)-1.683
Q2) In a left-tailed test comparing two means with unknown variances assumed to be equal, the test statistic was t = -1.81 with sample sizes of n<sub>1</sub> = 8 and n<sub>2</sub> = 12. The p-value would be:
A)between .025 and .05.
B)between .01 and .025.
C)between .05 and .10.
D)Must know to answer.
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Page 12
Chapter 11: Analysis of Variance
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Sample Questions
Q1) Refer to the following partial ANOVA results from Excel (some information is missing).
\[\begin{array} { | l | c | c | c | c | c | c | }
\hline \text { Source of Variation } & \text { SS } & d f & M S & F & P \text {-value } & F
\text { crit } \\
\hline \text { Between groups } & & & 210.2778 & & 0.064139 & \\
\hline \text { Within groups } & 1483 & & 74.15 & & & \\
\hline \text { Total } & 2113.833 & & & & & \\
\hline
\end{array}\] The critical value of F at ? = 0.05 is:
A)1.645.
B)2.84.
C)3.10.
D)4.28.
Q2) Which is not assumed in ANOVA?
A)Observations are independent.
B)Populations are normally distributed.
C)Variances of all treatment groups are the same.
D)Population variances are known.
Q3) What is GLM, and why do we need it?
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Page 13
Chapter 12: Simple Regression
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Q1) In a sample of size n = 23, a sample correlation of r = .400 provides sufficient evidence to conclude that the population correlation coefficient exceeds zero in a right-tailed test at:
A) = .01 but not = .05.
B) = .05 but not = .01.
C)both = .05 and = .01.
D)neither = .05 nor = .01.
Q2) The fitted intercept in a regression has little meaning if no data values near X = 0 have been observed.
A)True
B)False
Q3) The slope of a proposed population regression model yS1U1B1iS1U1B0 = ?S1U1B10 S1U1B0+ ?S1U1B11S1U1B0 xS1U1B1i S1U1B0+ ?S1U1B1iS1U1B0 is assumed to be:
A)a random variable.
B)distributed normally.
C)a statistic.
D)a parameter.
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Page 14
Chapter 13: Multiple Regression
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Sample Questions
Q1) In a regression model of student grades, we would code the nine categories of business courses taken (ACC, FIN, ECN, MGT, MKT, MIS, ORG, POM, QMM) by including nine binary (0 or 1) predictors in the regression.
A)True
B)False
Q2) A high leverage observation will have:
A)an unusual value of the observed Y.
B)unusual values of one or more X's.
C)a large standardized residual.
D)high correlations between the X's.
Q3) Which estimated multiple regression has nonlinearity tests?
A) \(\hat { y } = - 92 - 5 x _ { 1 } + 6 x _ { 1 } ^ { 2 } + 18 x _ {
B) \(\hat { y } = 47 - 18 x _ { 1 } - 3 x _ { 2 } + 6 x _ { 3 } + 36 x _
C) \(\hat { y } = 88 + 11 x _ { 1 } + 7 x _ { 1 } x _ { 2 } + 5 x _ { 2 }\)
Q4) There is one residual for each predictor in the regression model. A)True
B)False
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15
Chapter 14: Time Series Analysis
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Sample Questions
Q1) Which is a time series?
A)Last year's GDP in 27 developing countries
B)Year-end unemployment rates in the United States, 2000-2010
C)Passenger miles flown by each of 10 major airlines in 2010
D)The number of "hits" on each of 10 websites yesterday
Q2) A quadratic trend equation y<sub>t</sub> = 900 + 80t - 5t<sup>2</sup> was fitted to a company's sales. This result implies that the sales trend:
A)hit a peak in period 8.
B)hit a peak in period 5.
C)hit a trough in period 8.
D)hit a trough in period 5.
Q3) In exponential smoothing, using = .20 will provide less smoothing than using = .10.
A)True B)False
Q4) Moving averages are most useful for irregular data with no clear trend. A)True B)False
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Chapter 15: Chi-Square Tests
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Q1) The shape of the chi-square distribution depends only on its degrees of freedom.
A)True
B)False
Q2) For a chi-square goodness-of-fit test for a normal distribution using 8 categories with estimated mean and standard deviation, we would use the critical value for 7 degrees of freedom.
A)True
B)False
Q3) We would create a contingency table by:
A)summing the probabilities of two variables.
B)cross-tabulating frequencies of two variables.
C)applying the chi-square distribution to a sample.
D)using Cochran's Rule to estimate frequencies.
Q4) A probability plot usually allows outliers to be detected.
A)True
B)False
Q5) In an ECDF test for goodness-of-fit, the n observations are grouped into categories rather than being treated individually.
A)True
B)False
Page 17
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Chapter 16: Nonparametric Tests
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Q1) The Kruskal-Wallis test does not require normal populations, but it does require them to be of similar shape.
A)True
B)False
Q2) The Wilcoxon signed-rank test is analogous to a parametric two-sample t test of means from independent samples.
A)True
B)False
Q3) Most nonparametric tests require data measured on a ratio scale.
A)True
B)False
Q4) At the Food Barn, children can order from the adult menu (A) or the child's menu (C).
Below is the pattern of menu orders for 24 children last Wednesday evening. A, A, A, A, C,
A, A, C, C, C, A, A, A, A, A, A, C, C, C, A, C, C, C, C
Which test would you choose to see if this pattern is random?
A)Kruskal-Wallis test
B)Wilcoxon rank sum (Mann-Whitney) test
C)Wald-Wolfowitz one-sample runs test
D)Wilcoxon test
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Chapter 17: Quality Management
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Sample Questions
Q1) The upper and lower control limits of an \(\overline { X ^ { * } }\) chart are typically set at plus or minus three standard errors from the centerline.
A)True
B)False
Q2) In manufacturing, if workers readjust the equipment after each sample, it would typically:
A)increase variation.
B)decrease variation.
C)widen the specification limits.
D)improve conformance to specifications.
Q3) Which of the following is most likely the cause of a level shift in a SPC chart?
A)Tool wear
B)A new worker
C)Temperature fluctuations
D)Alternating samples from two machines
Q4) Control charts are used to monitor the quality of a product before it is produced.
A)True
B)False
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