Statistical Analysis for Business Decisions
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Course Introduction
Statistical Analysis for Business Decisions equips students with essential statistical tools and methodologies for informed decision-making in business environments. The course covers fundamental concepts such as descriptive statistics, probability distributions, hypothesis testing, regression analysis, and data interpretation. Emphasizing practical application, students learn to analyze and visualize data, draw meaningful conclusions, and make evidence-based recommendations using real-world business scenarios and datasets. Through case studies and hands-on exercises, the course prepares students to critically evaluate business problems and leverage statistical insights to optimize operations, mitigate risks, and drive strategic initiatives.
Recommended Textbook
Statistical Techniques in Business and Economics 17th Edition by Douglas Lind
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Chapter 1: What Is Statistics
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Sample Questions
Q1) Based on a sample of 3,000 people,the civilian unemployment rate in the United States was 5.5%. 5.5% is referred to as a statistic.
A)True
B)False
Answer: True
Q2) If Gallup,Harris,and other pollsters asked people to indicate their political party affiliations as Democrat,Republican,or independent,the data gathered would be an example of which scale of measurement?
A)Nominal
B)Ordinal
C)Interval
D)Ratio
Answer: A
Q3) Data measured on a nominal scale can only be classified into categories.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Describing Data: Frequency Tables, Frequency
Distributions, and Graphic Presentation
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Q1) To summarize the gender of students attending a college,the number of classes in a frequency table depends on the number of students.
A)True
B)False
Answer: False
Q2) In order to convert class frequency to relative class frequency,we
A)divide the midpoint of the class by the sample size.
B)divide the frequency of the class by the midpoint.
C)divide the sample size by the frequency of the class.
D)divide the frequency of the class by the sample size.
Answer: D
Q3) When data are collected using a quantitative,ratio variable,what is true about a frequency distribution that summarizes the data?
A)Upper and lower class limits must be calculated.
B)A pie chart can be used to summarize the data.
C)The number of classes is equal to the number of variable values.
D)The "5 to the k rule" can be applied.
Answer: A
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Chapter 3: Describing Data: Numerical Measures
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Sample Questions
Q1) The sum of the deviations of each data value from this measure of central location will always be zero.
A)Mode
B)Mean
C)Median
D)Standard deviation
Answer: B
Q2) The arithmetic mean is the sum of the quantitative observations divided by the total number of observations.
A)True
B)False
Answer: True
Q3) For any data set,which measures of central location have only one value?
A)Mode and median
B)Mode and mean
C)Mode and standard deviation
D)Mean and median
Answer: D
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5
Chapter 4: Describing Data: Displaying and Exploring Data
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Sample Questions
Q1) If a student places in the 99th percentile on an exam,she performed better than 99% of all students who completed the exam. Her performance is similar to a statement based on a ________.
A)frequency table
B)cumulative frequency distribution
C)histogram
D)pie chart
Q2) The coefficient of skewness is the standard deviation divided by the mean.
A)True
B)False
Q3) In a distribution,the second quartile corresponds with the ________.
A)mean
B)median
C)mode
D)variance
Q4) The 67th percentile is ________.
A)the value above which 67% of the observations occur
B)a value one less than 67% of the observations
C)the value below which 67% of the observations occur
D)the value of the observation at the 67th location
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Chapter 5: A Survey of Probability Concepts
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Sample Questions
Q1) A combination of a set of objects is defined by the order of the objects.
A)True
B)False
Q2) The first card selected from a standard 52-card deck was a king. If it is NOT returned to the deck,what is the probability that a king will be drawn on the second selection?
A)1/3 or 0.33
B)1/51 or 0.0196
C)3/51 or 0.0588
D)1/13 or 0.077
Q3) If two events are independent,then their joint probability is computed with
A)the special rule of addition
B)the special rule of multiplication
C)the general rule of multiplication
D)the Bayes' theorem
Q4) To apply the special rule of addition,the events must be mutually exclusive.
A)True
B)False
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Chapter 6: Discrete Probability Distributions
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Sample Questions
Q1) Sponsors of a local charity decided to attract wealthy patrons to its $500-a-plate dinner by allowing each patron to buy a set of 20 tickets for the gaming tables. The chance of winning a prize for each of the 20 plays is 50-50. If you bought 20 tickets,what is the chance of winning 15 or more prizes?
A)0.250
B)0.021
C)0.006
D)0.750
Q2) David's gasoline station offers 4 cents off per gallon if the customer pays in cash and does not use a credit card. Past evidence indicates that 40% of all customers pay in cash. During a one-hour period,15 customers buy gasoline at this station. This situation is an example of what type of discrete probability distribution?
A)Continuous probability distribution
B)Poisson probability distribution
C)Binomial probability distribution
D)Hypergeometric probability distribution
Q3) The mean of a binomial distribution is the product of n and .
A)True
B)False
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Page 8
Chapter 7: Continuous Probability Distributions
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Sample Questions
Q1) Some normal probability distributions are positively skewed.
A)True
B)False
Q2) The center of a normal probability distribution is ________.
A)the same as the standard deviation or the distribution
B)never negative
C)the mean of the distribution
D)always equal to zero
Q3) What is an important similarity between the uniform and normal probability distributions?
A)The mean,median,and mode are all equal.
B)The mean and median are equal.
C)They are negatively skewed.
D)About 68% of all observations are within one standard deviation of the mean.
Q4) A group of normal distributions can have equal arithmetic means but different standard deviations.
A)True
B)False
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Chapter 8: Sampling Methods and the Central Limit
Theorem
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Sample Questions
Q1) What is the difference between a sample mean and the population mean called?
A)Standard error of the mean
B)Sampling error
C)Interval estimate
D)Point estimate
Q2) The size of the sampling error is ________.
A)directly related to the sample size-in other words,the larger the sample size,the larger the sampling error
B)directly related to the population mean-in other words,the larger the mean,the larger the sampling error
C)inversely related to the sample size-in other words,the larger the sample size,the smaller the sampling error
D)inversely related to the population standard deviation-in other words,the smaller the standard deviation,the larger the sampling error
Q3) The true sampling error is usually not known because ________.
A)µ is unknown
B)µ is a random variable
C) <sup>2</sup> is unknown
D)The sample mean cannot be computed.
Page 10
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Chapter 9: Estimation and Confidence Intervals
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Sample Questions
Q1) The finite population correction (FPC)factor is used to adjust the z-statistic or t-statistic.
A)True
B)False
Q2) The mean weight of trucks traveling on a particular section of I-475 is not known. A state highway inspector needs an estimate of the population mean. He selects and weighs a random sample of 49 trucks and finds the mean weight is 15.8 tons. The population standard deviation is 3.8 tons. What is the 95% confidence interval for the population mean?
A)14.7 and 16.9
B)13.2 and 17.6
C)10.0 and 20.0
D)16.1 and 18.1
Q3) The distribution of Student's t has ________.
A)a mean of zero and a standard deviation of one
B)a mean of one and a standard deviation of one
C)a mean of zero and a standard deviation that depends on the sample size
D)a mean that depends on the sample size and a standard deviation of one
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Chapter 10: One-Sample Tests of Hypothesis
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Sample Questions
Q1) For a one-tailed hypothesis test,the critical z-value of the test statistic is 2.33. Which of the following is true about the hypothesis test?
A) = 0.05 for a lower-tailed test
B) = 0.01 for a lower-tailed test
C) = 0.05 for an upper-tailed test
D) = 0.01 for an upper-tailed test
Q2) For a one-tailed test with a 0.05 level of significance,the critical z-statistic is 1.645,but the critical t-statistic is 1.96.
A)True
B)False
Q3) A Type II error is the probability of rejecting the null hypothesis when it is actually true.
A)True
B)False
Q4) A null hypothesis makes a claim about a ________.
A)population parameter
B)sample statistic
C)sample mean
D)type II error
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Chapter 11: Two-Sample Tests of Hypothesis
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Sample Questions
Q1) If two dependent samples of size 20 are used to test the difference between the means,the degrees of freedom for a t-statistic are 19.
A)True
B)False
Q2) Which condition must be met to conduct a test for the difference in two sample means using a z-statistic?
A)The data must be at least of nominal scale.
B)The populations must be normal.
C)The two population standard deviations must be known.
D)The samples are dependent.
Q3) For a hypothesis test comparing two population means,the combined degrees of freedom are 24. Which of the following statements about the two sample sizes cannot be true? Assume the population standard deviations are equal.
A)n<sub>1</sub> = 11; n<sub>2</sub> = 13
B)n<sub>1</sub> = 12; n<sub>2</sub> = 14
C)n<sub>1</sub> = 13; n<sub>2</sub> = 13
D)n<sub>1</sub> = 10; n<sub>2</sub> = 16
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Page 13
Chapter 12: Analysis of Variance
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Sample Questions
Q1) The alternative hypothesis used in ANOVA is H<sub>1</sub>: All population means are equal.
A)True B)False
Q2) When a blocking effect is included in an ANOVA,the result is a smaller error sum of squares.
A)True B)False
Q3) The following is the information for a completely randomized experimental design involving four treatments,where 12 observations were recorded for each treatment for a total of 48 observations. SST = 210 (Sum of Squares Between Groups); SS Total = 840 (Sum of Squares Total). The computed value of F,or the test statistic,is ________.
A)0.25
B)12.0
C)4.88
D)8.0
Q4) The F-distribution's curve is positively skewed.
A)True B)False
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Chapter 13: Correlation and Linear Regression
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Sample Questions
Q1) If we reject the null hypothesis,H<sub>0</sub>: = 0 ,what can we conclude about the population correlation coefficient?
A)It is zero.
B)It could be zero.
C)It is not zero.
D)It equals the computed sample correlation.
Q2) Based on the regression equation,we can ________.
A)predict the value of the dependent variable given a value of the independent variable
B)predict the value of the independent variable given a value of the dependent variable
C)measure the association between two variables
D)measure cause and effect
Q3) If r = 0.65,what does the coefficient of determination equal?
A)0.1945
B)0.4225
C)0.5778
D)0.8061
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Chapter 14: Multiple Regression Analysis
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Sample Questions
Q1) Stepwise regression analysis is a method that assists in selecting the most significant variables for a multiple regression equation.
A)True
B)False
Q2) An example of a dummy variable is "time to product's first repair" in years.
A)True
B)False
Q3) What can we conclude if the global test of regression does not reject the null hypothesis?
A)A strong relationship exists among the variables.
B)No relationship exists between the dependent variable and any of the independent variables.
C)The independent variables are good predictors.
D)Good forecasts are possible.
Q4) The variance inflation factor can be used to reduce multicollinearity by ________.
A)eliminating variables for a multiple regression model
B)decreasing homoscedasticity
C)evaluating the distribution of residuals
D)testing the null hypothesis that all regression coefficients equal zero
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Chapter 15: Nonparametric Methods: Nominal Level
Hypothesis Tests
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Sample Questions
Q1) In testing the difference between two population proportions,we pool the two sample proportions to estimate the population proportion.
A)True
B)False
Q2) Which of the following assumptions is necessary to apply a goodness-of-fit test?
A)The population must be normally distributed.
B)The data are measured with a nominal or ordinal scale.
C)The population variance must be known.
D)The population mean must be known.
Q3) The computed chi-square value is positive because the difference between the observed and expected frequencies is ________.
A)squared
B)linear
C)uniform
D)always positive
Q4) The shape of the chi-square distribution depends on the number of degrees of freedom.
A)True
B)False
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Chapter 16: Nonparametric Methods: Analysis of Ordinal
Data
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Sample Questions
Q1) Twenty economists were sampled and asked to predict if the national economy would improve during the next 12 months. Eleven of the economists predicted an increase,two economists predicted no change,and seven economists predicted a decrease in the economy. Conduct a hypothesis test at the 0.10 significance level to determine if the majority of economists predict an increase. The correct analysis would be a ________.
A)sign test based on the binomial distribution
B)sign test based on the standard normal distribution
C)chi-square test
D)Wilcoxon signed-rank test
Q2) Which of the following statements is true regarding the sign test?
A)It is based on the sign of the differences.
B)It is used with independent populations.
C)The chi-square is used as the test statistic.
D)The "T" statistic is the test statistic.
Q3) Which statement is true when using the sign test and a large sample?
A)The chi-square value is applied to arrive at the degrees of freedom.
B)A normal distribution should be used to approximate a binomial distribution.
C)Wilcoxon z is the test statistic.
D)The F distribution is applied.
Page 18
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Chapter 17: Index Numbers
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Sample Questions
Q1) One function of the CPI is to allow consumers to determine the degree to which their purchasing power is being eroded by price increases.
A)True
B)False
Q2) In January 2004,the price of coffee was $0.74 per pound. By January 2011,the price of coffee had increased to $2.63. The simple index is about ________.
A)0.48
B)0.28
C)355
D)189
Q3) What does a typical market basket of goods and services include?
A)Bread
B)Beer
C)Milk
D)All of these answers are correct.
Q4) An example of a weighted index is P = p<sub>t</sub>/p<sub>0</sub>.
A)True
B)False
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Chapter 18: Time Series and Forecasting
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Sample Questions
Q1) The forecast for the third quarter is 3,000 units; the seasonal index for the quarter is 1.05. What are the seasonally adjusted sales for the quarter?
A)3,000
B)3,005
C)3,150
D)2,360
Q2) For an annual time series extending from 2000 through 2010,how many years would be lost in a three-year moving average?
A)Two at the start and one at the end
B)One at the start and one at the end
C)Two at the start and zero at the end
D)Zero at the start and two at the end
Q3) If the time series trend is nonlinear,a transformation of the data is required.
A)True
B)False
Q4) The Durbin-Watson statistic is used to test for correlated residuals.
A)True
B)False
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Chapter 19: Statistical Process Control and Quality Management
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Sample Questions
Q1) These are examples of attributes: the width of a cracked weld; the length of time that a relay works; the amount of water in a radiator; the diameter of a tire.
A)True
B)False
Q2) A chart used to show the results of a Pareto analysis is a ________.
A)range chart
B)bar chart
C)control chart
D)fishbone diagram
Q3) Random samples of four items are selected from a manufacturing process at regular intervals and a certain quality characteristic is measured. After 25 samples, X = 15,350 and R = 411.4 The measurement of quality is based on ________.
A)an attribute
B)a variable
C)a scale
D)a chart
Q4) In acceptance sampling,usually 100% of the incoming lot is checked.
A)True
B)False
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Chapter 20: An Introduction to Decision Theory
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Sample Questions
Q1) The manager of Paul's fruit and vegetable store is considering the purchase of a new seedless watermelon from a wholesale distributor. Because this seedless watermelon costs $4,will sell for $7,and is highly perishable,he expects only to sell between six and nine of them. Based on a maximin decision strategy,what alternative is selected?
A)Order 6
B)Order 7
C)Order 8
D)Order 9
Q2) Besides a payoff table,the information for decision analysis can be organized using a ________.
A)decision tree
B)scatter diagram
C)fishbone diagram
D)Pareto chart
Q3) A decision maker usually has a choice among several possible alternative acts. For each alternative act,there are many possible results called states of occurrence.
A)True
B)False
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