Quantitative Methods for Business Chapter Exam Questions
Course Introduction
Quantitative Methods for Business introduces students to essential mathematical and statistical techniques used in analyzing business problems and making informed decisions. The course covers topics such as data collection and analysis, probability distributions, hypothesis testing, regression analysis, forecasting, and optimization models. Emphasizing practical application, students learn to interpret quantitative results and apply analytical tools in areas like operations, finance, marketing, and management, preparing them to address real-world business challenges with confidence and precision.
Recommended Textbook
Business Statistics for Contemporary Decision Making 2nd Canadian Edition by Ken Black
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Chapter 1: Introduction to Statistics
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Sample Questions
Q1) Sue Taylor,Director of Global Industrial Sales,is concerned by a deteriorating sales trend.Specifically,the number of industrial customers is stable at 1,500,but they are purchasing less each year.She orders her staff to search for causes of the downward trend by selecting a focus group of 40 industrial customers.For this study,the set of 40 industrial customers is ___.
A)a parameter
B)a sample
C)the population
D)a statistic
E)the frame
Answer: B
Q2) Define important statistical terms,including population,sample,and parameter,as they relate to descriptive and inferential statistics.
Answer: The study of statistics can be subdivided into two main areas: descriptive statistics and inferential statistics.Descriptive statistics result from gathering data from a body,group,or population and reaching conclusions only about that group.Inferential statistics are generated from the process of gathering sample data from a group,body,or population and reaching conclusions about the larger group from which the sample was drawn.
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Page 3
Chapter 2: Charts and Graphs
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Sample Questions
Q1) A graphical representation of a frequency distribution is called a pie chart.
A)True
B)False
Answer: False
Q2) Describe and construct different types of qualitative data graphs,including pie charts,bar charts,and Pareto charts.Explain when these graphs should be used.
Answer: A pie chart is a circular depiction of data.The amount of each category is represented as a slice of the pie proportionate to the total.The researcher is cautioned in using pie charts because it is sometimes difficult to differentiate the relative sizes of the slices.The bar chart or bar graph uses bars to represent the frequencies of various qualitative categories.The bar chart can be displayed horizontally or vertically.A Pareto chart is a vertical bar chart that is used in total quality management to graphically display the causes of problems.The Pareto chart presents problem causes in descending order to assist the decision maker in prioritizing problem causes.
Q3) A cumulative frequency polygon is also called an ogive.
A)True
B)False
Answer: True
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4
Chapter 3: Descriptive Statistics
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Sample Questions
Q1) According to Chebyshev's Theorem,how many values in a data set will be within three standard deviations of the mean?
A)at least 75%
B)at least 68%
C)at least 95%
D)at least 89%
E)at least 99%
Answer: D
Q2) The mean life of a particular brand of light bulb is 1000 hours and the standard deviation is 50 hours.It can be concluded that at least 89% of this brand of bulbs will last between ___.
A)900 and 1100 hours
B)950 and 1050 hours
C)850 and 1150 hours
D)800 and 1200 hours
E)1050 and 1250 hours
Answer: C
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Page 5
Chapter 4: Probability
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Sample Questions
Q1) Given two events A and B each with a non-zero probability,if the conditional probability of A given B is zero,it implies that the events A and B are mutually exclusive.
A)True
B)False
Q2) A market research firm conducts studies regarding the success of new products.The company is not always perfect in predicting the success.Suppose that there is a 50% chance that any new product would be successful (and a 50% chance that it would fail).In the past,for all new products that ultimately were successful,80% were predicted to be successful (and the other 20% were inaccurately predicted to be failures).Also,for all new products that were ultimately failures,70% were predicted to be failures (and the other 30% were inaccurately predicted to be successes).If the market research predicted that the product would be a success,what is the probability that it would actually be a success?
A)0.27
Q3) Compare marginal,union,joint,and conditional probabilities by defining each one.
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Page 6
Chapter 5: Discrete Distributions
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Sample Questions
Q1) A hypergeometric distribution applies to experiments in which the trials represent sampling without replacement.
A)True
B)False
Q2) Suppose a committee of 3 people is to be selected from a group consisting of 4 men and 5 women.What is the probability that all three people selected are men?
A)0.05
B)0.33
C)0.11
D)0.80
E)0.90
Q3) A binomial distribution is better than a Poisson distribution to describe the occurrence of major oil spills in the Gulf of Saint Lawrence.
A)True
B)False
Q4) Solve problems involving the Poisson distribution using the Poisson formula and the Poisson table.
Q5) Determine the mean,variance,and standard deviation of a discrete distribution.
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Chapter 6: Continuous Distributions
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Sample Questions
Q1) If x,the time (in minutes)to complete an oil change job at a certain auto service station,is uniformly distributed over the interval 20 to 30,inclusively (20 \(\le\) x \(\le\) 30),then the standard deviation of this distribution is ___.
A)unknown
B)8.33
C)0.833
D)2.89
E)1.89
Q2) Let z be a normal random variable with mean 0 and standard deviation 1.The 50<sup>th</sup> percentile of z is ___.
A)0.6700
B)-1.254
C)0.0000
D)1.2800
E)0.5000
Q3) A normal distribution with a mean of zero and a standard deviation of 1 is called a null distribution.
A)True
B)False
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Page 8
Chapter 7: Sampling and Sampling Distributions
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Sample Questions
Q1) Abel Alonzo,Director of Human Resources,is exploring employee absenteeism at the Harrison Haulers Plant.Abel knows that absenteeism varies significantly between departments.For example,workers in the wood shop are absent more than those in the tuning department and the size of the departments ranges from 40 to 120 workers.He orders a random sample of 10 workers from each of the six departments.Abel' sample is a ___.
A)proportionate systematic sample
B)proportionate stratified sample
C)disproportionate systematic sample
D)disproportionate stratified sample
E)proportionate cluster sample
Q2) Nonsampling error occurs when,due to chance,the sample is not representative of the population.
A)True
B)False
Q3) A nonrandom sampling technique which is similar to stratified random sampling is called quota sampling.
A)True
B)False
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Chapter 8: Statistical Inference: Estimation for Single Populations
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Sample Questions
Q1) A random sample of 225 items from a population results in 60% possessing a given characteristic.Using this information,the researcher constructs a 99% confidence interval to estimate the population proportion.The resulting confidence interval is ___.
A)0.54 to 0.66
B)0.59 to 0.61
C)0.57 to 0.63
D)0.52 to 0.68
E)0.68 to 0.76
Q2) A random sample of 64 items is selected from a population of 400 items.The sample mean is 200.The population standard deviation is 48.From this data,a 95% confidence interval to estimate the population mean can be computed as ___.
A)189.21 to 210.79
B)188.24 to 211.76
C)190.13 to 209.87
D)190.94 to 209.06
E)193.45 to 211.09
Q3) Use the chi-square distribution to estimate the population variance given the sample variance.
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Chapter 9: Statistical Inference: Hypothesis Testing for
Single Populations
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Sample Questions
Q1) The first step in testing a hypothesis is to establish a true null hypothesis and a false alternative hypothesis.
A)True
B)False
Q2) A company believes that it controls more than 30% of the total market share for one of its products.To prove this belief,a random sample of 144 purchases of this product is contacted.It is found that 50 of the 144 purchased this company's brand of the product.If a researcher wants to conduct a statistical test for this problem,the observed z value would be ___.
A)0.05
B)0.103
C)0.35
D)1.24
E)1.67
Q3) Develop both one- and two-tailed null and alternative hypotheses that can be tested in a business setting by examining the rejection and nonrejection regions in light of Type I and Type II errors.
Q4) Reach a statistical conclusion in hypothesis testing problems about a population variance using the chi-square statistic.
Page 11
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Chapter 10: Statistical Inferences About Two Populations
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Sample Questions
Q1) Suppose that .06 of each of two populations possess a given characteristic.Samples of size 400 are randomly drawn from each population.What is the probability that the differences in sample proportions will be greater than 0.02?
A)0.4535
B)0.9535
C)0.1170
D)0.5465
E)0.4650
Q2) If the sample sizes are greater than 30 and the population variances are known,the basis for statistical inferences about the difference in two population means using two independent random samples is the z statistic,regardless of the shapes of the population distributions.
A)True
B)False
Q3) Test hypotheses about the difference in two population variances using the F distribution.
Q4) Test hypotheses and develop confidence intervals about the difference in two population proportions.
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Chapter 11: Analysis of Variance and Design of Experiments
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Sample Questions
Q1) Pate's Pharmacy,Inc.operates a regional chain of 120 pharmacies.Each pharmacy's floor plan includes a greeting card department which is relatively isolated.Sandra Royo,Marketing Manager,feels that the level of lighting in the greeting card department may affect sales in that department.She chooses three levels of lighting (soft,medium,and bright)and randomly assigns six pharmacies to each lighting level.In Sandra's experimental design "sales in the greeting card department" is ___.
A)the dependent variable
B)a concomitant variable
C)a treatment variable
D)a blocking variable
E)a constant
Q2) Describe an experimental design and its elements,including independent variables-both treatment and classification-and dependent variables.
Q3) In analysis of variance tests a t distribution forms the basis for making the decisions.
A)True
B)False
Q4) Test a completely randomized design using a one-way analysis of variance.
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Chapter 12: Simple Regression Analysis and Correlation
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Sample Questions
Q1) A cost accountant is developing a regression model to predict the total cost of producing a batch of printed circuit boards as a linear function of batch size (the number of boards produced in one lot or batch).The intercept of this model is the ___.
A)batch size
B)unit variable cost
C)fixed cost
D)total cost
E)total variable cost
Q2) The F value to test the overall significance of a regression model is computed by dividing the sum of squares regression (SS<sub>reg</sub>)by the sum of squares error (SS<sub>err</sub>).
A)True
B)False
Q3) In the regression equation,y = 75.65 + 0.50x,the intercept is ___.
A)0.50
B)75.65
C)1.00
D)0.00
E)-0.50
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Chapter 13: Multiple Regression Analysis
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Sample Questions
Q1) A market analyst is developing a regression model to predict monthly household expenditures on groceries as a function of family size,household income,and household neighbourhood (urban,suburban,and rural).The "income" variable in this model is ___.
A)an indicator variable
B)a response variable
C)a qualitative variable
D)a dependent variable
E)an independent variable
Q2) A cost accountant is developing a regression model to predict the total cost of producing a batch of printed circuit boards as a linear function of batch size (the number of boards produced in one lot or batch),production plant (Kingsland and Yorktown),and production shift (day and evening).The response variable in this model is
A)batch size
B)production shift
C)production plant
D)total cost
E)variable cost
Q3) Understand the limitations and pitfalls of multiple regression analysis.
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Chapter 14: Building Multiple Regression Models
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Sample Questions
Q1) A linear regression model can be used to explore the possibility that a quadratic relationship may exist between two variables by suitably transforming the independent variable.
A)True
B)False
Q2) If a qualitative variable has "c" categories,how many dummy variables must be created and used in the regression analysis?
A)c - 1
B)c
C)c + 1
D)c - 2
E)4 + c
Q3) Stepwise regression is one of the ways to prevent the problem of multicollinearity.
A)True
B)False
Q4) A useful tool in improving the regression model fit is recoding data.
A)True
B)False
Q5) Explain when to use logistic regression,and interpret its results.
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Chapter 15: Time-Series Forecasting and Index Numbers
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Sample Questions
Q1) Linear regression models cannot be used to analyze quadratic trends in time-series data.
A)True
B)False
Q2) Use of a smoothing constant value greater than 0.5 in an exponential smoothing model gives more weight to ___.
A)the actual value for the current period
B)the actual value for the previous period
C)the forecast for the current period
D)the forecast for the previous period
E)the forecast for the next period
Q3) When forecasting with exponential smoothing,data from previous periods is ___.
A)given equal importance
B)given exponentially increasing importance
C)ignored
D)given exponentially decreasing importance
E)linearly decreasing importance
Q4) Account for seasonal effects of time-series data by using decomposition and Winters' three-parameter exponential smoothing method.
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Chapter 16: Analysis of Categorical Data
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Sample Questions
Q1) In a chi-square test of independence the contingency table has 4 rows and 3 columns.The number of degrees of freedom for this test is 12.
A)True
B)False
Q2) A variable contains five categories.It is expected that data are uniformly distributed across these five categories.To test this,a sample of observed data is gathered on this variable resulting in frequencies of 26,10,17,21,and 26.Using \(\alpha\) = .01,the observed chi-square value is ___.
A)1.18
B)9.10
C)20.27
D)4.51
E)19.70
Q3) In a chi-square test of independence the contingency table has 4 rows and 3 columns.The number of degrees of freedom for this test is 7.
A)True
B)False
Q4) Use the chi-square test of independence to perform contingency analysis.
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Chapter 17: Nonparametric Statistics
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Sample Questions
Q1) The one-sample runs test is a nonparametric test for sequential independence.
A)True
B)False
Q2) The nonparametric alternative to analysis of variance for a randomized block design is the Friedman test.
A)True
B)False
Q3) Use both the small-sample and large-sample cases of the Wilcoxon matched-pairs signed rank test to compare the differences in two related samples.
Q4) The appropriate test for comparing the means of two populations using ordinal-level data from two independent samples is the Mann-Whitney U test.
A)True
B)False
Q5) The one-sample runs test is a ___.
A)nonparametric test for statistical independence
B)parametric test for statistical independence
C)nonparametric test of randomness
D)nonparametric test for correlation
E)parametric test of sequences
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Chapter 18: Statistical Quality Control
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Sample Questions
Q1) Which of the following quality control chart conditions is an indicator that the process is potentially out-of-control?
A)several consecutive data points between the UCL and the LCL
B)a data point below the LCL
C)a data point below the UCL
D)a data point in the outer 1/3 region
E)a data point on the center line
Q2) A p chart is to be developed for use in quality control.The value of p is calculated to be 0.04.The sample size is 100.What would the upper control limit be?
A)0.059
B)0.099
C)0.109
D)0.040
E)1.090
Q3) Two general types of control charts are (1)control charts for measurements and (2)control charts for compliance items.
A)True
B)False
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Chapter 19: Decision Analysis
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Sample Questions
Q1) In decision-making under risk,the expected monetary value without information is ___.
A)the weighted average of the best payoff for each state of nature
B)the largest of the EMVs for the different decision alternatives
C)never smaller than the expected monetary payoff with perfect information
D)the average of the EMVs
E)half the expected monetary value with information
Q2) In a decision-making under uncertainty scenario using the strategy of minmax regret,all the entries in the opportunity loss table must be zero or positive.
A)True
B)False
Q3) In decision-making under uncertainty,the approach that considers only the best and the worst payoffs for each decision alternative is the ___.
A)maximin criterion
B)maximax criterion
C)Hurwicz criterion
D)minimax regret strategy
E)maximin regret strategy
Q4) Make decisions under certainty by constructing a decision table.
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