Statistical Methods for Business Decisions
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Course Introduction
This course introduces students to essential statistical concepts and techniques used in business decision-making. Topics include data collection and analysis, probability distributions, statistical inference, hypothesis testing, correlation, regression analysis, and forecasting. Emphasis is placed on interpreting results and applying statistical methods to real-world business scenarios such as marketing, finance, operations, and management. Through case studies and software tools, students learn to use data-driven approaches to solve business problems and make informed decisions in a dynamic business environment.
Recommended Textbook
Basic Business Statistics Global Edition 12th edition by Mark Berenson
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Page 2
Chapter 1: Introduction
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Sample Questions
Q1) Referring to Table 1-1,the possible responses to the question "How would you rate the quality of your purchase experience with 1 = excellent,2 = good,3 = decent,4 = poor,5 = terrible?" result in
A)a nominal scale variable.
B)an ordinal scale variable.
C)an interval scale variable.
D)a ratio scale variable.
Answer: B
Q2) The level of satisfaction ("Very unsatisfied," "Fairly unsatisfied," "Fairly satisfied," and "Very satisfied")in a class is an example of a categorical variable.
A)True
B)False
Answer: True
Q3) A professor computed the sample average exam score of 20 students and used it to estimate the average exam score of the 1,500 students taking the exam,which is an example of inferential statistics.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Organizing and Visualizing Data
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Sample Questions
Q1) A polygon can be constructed from a bar chart.
A)True
B)False
Answer: False
Q2) Referring to the histogram from Table 2-3,how many graduating seniors attended the luncheon?
A)4
B)152
C)275
D)388 Answer: C
Q3) Referring to Table 2-12,of the females in the sample,________ percent were either neutral or against the plan.
Answer: 63.46% or (51.92 + 11.54)%
Q4) Referring to Table 2-18,how many students have a satisfaction level in the 50s? Answer: 5
Q5) Relationships in a contingency table can be examined more fully if the frequencies are converted into ________.
Answer: percentages or proportions
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Chapter 3: Numerical Descriptive Measures
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Sample Questions
Q1) The interquartile range is a measure of variation or dispersion in a set of data.
A)True
B)False
Answer: True
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 more than 125 lbs?
Answer: 50 percent
Q3) If the data set is approximately bell-shaped,the empirical rule will more accurately reflect the greater concentration of data close to the mean as compared to the Chebyshev rule.
A)True
B)False
Answer: True
Q4) Referring to Table 3-4,the standard deviation of the customs data is ________. Answer: 4.3
Q5) Referring to Table 3-2,the standard deviation of the carbohydrate amounts is ________ grams.
Answer: 5.10
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Chapter 4: Basic Probability
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Sample Questions
Q1) Referring to Table 4-6,if a randomly selected student is not from southern Texas,the probability the student has not passed the ELM is ________.
Q2) Referring to Table 4-10,what is the probability that a randomly selected worker is white and had claimed bias?
Q3) The probability that house sales will increase in the next 6 months is estimated to be 0.25.The probability that the interest rates on housing loans will go up in the same period is estimated to be 0.74.The probability that house sales or interest rates will go up during the next 6 months is estimated to be 0.89.The events increase in house sales and increase in interest rates in the next 6 months are A)independent.
B)mutually exclusive.
C)collectively exhaustive.
D)None of the above.
Q4) Referring to Table 4-8,determine whether the class status of a student and whether the student lives in a dormitory are independent.
Q5) 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?
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Chapter 5: Discrete Probability Distributions
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Sample Questions
Q1) Referring to Table 5-10,what is the probability that no more than two of the new employees will be from University B?
Q2) Suppose that past history shows that 60% of college students prefer Brand C cola.A sample of 5 students is to be selected.The probability that exactly 4 prefer Brand C is ________.
Q3) 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 coefficient of variation of your investment?
Q4) The covariance between two investments is equal to the sum of the variances of the investments.
A)True
B)False
Q5) Referring to Table 5-1,the probability that neither sound an alarm in the presence of smoke is ________.
Q6) Referring to Table 5-8,if you decide to choose Design A for 10% of the production lines and Design B for the remaining production lines,what is the coefficient of variation of your investment?
Q7) Referring to Table 5-2,the probability that all 3 businesses fail is ________.
Page 7
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Chapter 6: The Normal Distribution and Other Continuous Distributions
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Sample Questions
Q1) The true length of boards cut at a mill with a listed length of 10 feet is normally distributed with a mean of 123 inches and a standard deviation of 1 inch.What proportion of the boards will be over 125 inches in length?
Q2) Referring to Table 6-2,the probability is 0.45 that John's income as a waiter is more than how much in a given month?
Q3) The interval between patients arriving at an outpatient clinic follows an exponential distribution at a rate of 15 patients per hour.What is the probability that a randomly chosen arrival to be more than 5 minutes?
Q4) The amount of time between successive TV watching by first graders follows an exponential distribution with a mean of 10 hours.The probability that a given first grader spends between 10 and 15 hours between successive TV watching is ________.
Q5) A food processor packages orange juice in small jars.The weights of the filled jars are approximately normally distributed with a mean of 10.5 ounces and a standard deviation of 0.3 ounce.Find the proportion of all jars packaged by this process that have weights that fall below 10.875 ounces.
Q6) Referring to Table 6-6,10% of the annual returns will be at least what amount?
Q7) Referring to Table 6-3,what is the mean of the time interval?
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Chapter 7: Sampling and Sampling Distributions
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Sample Questions
Q1) Measurement error can become an ethical issue when an interviewer purposely guides the responses in a particular direction.
A)True
B)False
Q2) Which of the following sampling methods will more likely be susceptible to ethical violation when used to form conclusions about the entire population?
A)Simple random sample
B)Cluster sample
C)Systematic sample
D)Convenience sample
Q3) Referring to Table 7-2,what is the probability that the sample mean differs from the population mean by more than 3 hours?
Q4) ________ results from the failure to collect data on all subjects in the sample.
Q5) A manufacturer of power tools claims that the mean amount of time required to assemble their top-of-the-line table saw is 80 minutes with a standard deviation of 40 minutes.Suppose a random sample of 64 purchasers of this table saw is taken.So,the middle 95% of the sample means based on samples of size 64 will be between ________ and ________.
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Chapter 8: Confidence Interval Estimation
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Sample Questions
Q1) Referring to Table 8-13,we are 95% confident that the population mean number of managers who have caught salespeople cheating on an expense report is between 0.5116 to 0.6484.
A)True
B)False
Q2) Referring to Table 8-11,the critical value for a 99% confidence interval for this sample is ________.
Q3) Referring to Table 8-4,a 99% confidence interval will contain 99% of the voltages for all such power packs.
A)True
B)False
Q4) Referring to Table 8-8,the parameter of interest is the proportion of the student population who own a personal computer.
A)True
B)False
Q5) Referring to Table 8-7,the parameter of interest is the proportion of the rooms rented daily in a given month.
A)True
B)False
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Chapter 9: Fundamentals of Hypothesis Testing:
One-Sample Tests
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Sample Questions
Q1) An entrepreneur is considering the purchase of a coin-operated laundry.The current owner claims that over the past 5 years,the mean daily revenue was $675 with a population standard deviation of $75.A sample of 30 days reveals a daily mean revenue of $625.If you were to test the null hypothesis that the daily mean revenue was $675 and decide not to reject the null hypothesis,what can you conclude?
A)There is not enough evidence to conclude that the daily mean revenue was $675.
B)There is not enough evidence to conclude that the daily mean revenue was not $675.
C)There is enough evidence to conclude that the daily mean revenue was $675.
D)There is enough evidence to conclude that the daily mean revenue was not $675.
Q2) Referring to Table 9-1,the manager can conclude that there is sufficient evidence to show that the mean number of defective bulbs per case is greater than 20 during the morning shift with no more than a 5% probability of incorrectly rejecting the true null hypothesis.
A)True
B)False
Q3) Referring to Table 9-8,the null hypothesis would be rejected.
A)True
B)False
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Chapter 10: Two-Sample Tests
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Sample Questions
Q1) Referring to Table 10-15,suppose = 0.10.Which of the following represents the result of the relevant hypothesis test?
A)The alternative hypothesis is rejected.
B)The null hypothesis is rejected.
C)The null hypothesis is not rejected.
D)Insufficient information exists on which to make a decision.
Q2) Referring to Table 10-5,the value of the standard error of the difference scores is
A)65.027.
B)60.828.
C)22.991.
D)14.696.
Q3) In testing for differences between the means of two related populations,the null hypothesis is
A)H : D = 2.
B)H : D = 0.
C)H : D < 0.
D)H : D > 0.
Q4) Referring to Table 10-4,the computed t statistic is ________.
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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Sample Questions
Q1) Referring to Table 11-8,the null hypothesis for the randomized block F test for the difference in the means should be rejected at a 0.05 level of significance.
A)True
B)False
Q2) Referring to Table 11-8,there is evidence of a significant difference in the mean amount of time needed to learn Brand A and Brand B at the 5% level of significance.
A)True
B)False
Q3) Referring to Table 11-5,the within-group variation or SSW is ________.
Q4) Referring to Table 11-4,based on the Tukey-Kramer procedure with an overall level of significance of 0.01,the agronomist would decide that there is a significant difference between the crop yield of Walsh and Trevor seeds.
A)True
B)False
Q5) Referring to Table 11-7,the among-group variation or SSA is ________.
Q6) Referring to Table 11-3,the sporting goods retailer decided to perform an ANOVA F test.The amount of total variation or SST is ________.
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Page 13
Chapter 12: Chi-Square Tests and Nonparametric Tests
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Sample Questions
Q1) Referring to Table 12-10,find the rejection region necessary for testing at the 0.05 level of significance whether there is a relationship between defect rate and years of experience.
A)Reject H if X² > 16.919
B)Reject H if X² > 15.507
C)Reject H if X² > 11.143
D)Reject H if X² > 9.488
Q2) Referring to Table 12-6,what is the value of the critical range for the Marascuilo procedure to test for the difference in proportions between year 2 and year 3 using a 0.05 level of significance?
Q3) Referring to Table 12-13,the critical value of the test will be
A)6.635.
B)13.277.
C)14.860.
D)21.666.
Q4) Referring to Table 12-3,the decision made suggests that there is a difference between the proportion of males and females who ride local versus non-local routes.
A)True
B)False
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Chapter 13: Simple Linear Regression
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Sample Questions
Q1) Data that exhibit an autocorrelation effect violate the regression assumption of independence.
A)True
B)False
Q2) Referring to Table 13-10,construct a 95% confidence interval for the change in mean weekly sales when the number of customers who make purchases increases by one.
Q3) Referring to Table 13-12,the degrees of freedom for the t test on whether the number of loan applications recorded affects the amount of time are A)1
B)28.
C)29. D)30.
Q4) The Regression Sum of Squares (SSR)can never be greater than the Total Sum of Squares (SST).
A)True
B)False
Q5) Referring to Table 13-4,the prediction for the amount of sales (in $1,000s)for a person who brings 25 new clients into the firm is ________.
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Chapter 14: Introduction to Multiple Regression
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Sample Questions
Q1) Referring to Table 14-18,which of the following is the correct interpretation for the SAT slope coefficient?
A)Holding constant the effect of the other variables,the estimated mean value of school type increases by 0.015 for each increase of one point in average SAT score.
B)Holding constant the effect of the other variables,the estimated school type increases by 0.015 for each increase of one point in average SAT score.
C)Holding constant the effect of the other variables,the estimated probability of the school being a private school increases by 0.015 for each increase of one point in mean SAT score.
D)Holding constant the effect of the other variables,the estimated natural logarithm of the odds ratio of the school being a private school increases by 0.015 for each increase of one point in mean SAT score.
Q2) Referring to Table 14-3,the p-value for the aggregated price index is
A)0.05
B)0.01
C)0.001
D)None of the above.
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Chapter 15: Multiple Regression Model Building
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Sample Questions
Q1) In stepwise regression,an independent variable is not allowed to be removed from the model once it has entered into the model.
A)True B)False
Q2) The goals of model building are to find a good model with the fewest independent variables that is easier to interpret and has lower probability of collinearity.
A)True B)False
Q3) Referring to Table 15-6,what is the value of the variance inflationary factor of Manager?
Q4) Referring to Table 15-3,suppose the chemist decides to use an F test to determine if there is a significant curvilinear relationship between time and dose.The value of the test statistic is ________.
Q5) Referring to Table 15-6,the variable X should be dropped to remove collinearity.
A)True B)False
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Chapter 16: Time-Series Forecasting
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Sample Questions
Q1) Referring to Table 16-4,construct a centered 5-year moving average for the wine sales.
Q2) Referring to Table 16-5,the number of arrivals will be exponentially smoothed with a smoothing constant of 0.25.The smoothed value for the second Monday will be ________.
Q3) Referring to Table 16-13,what is the exponentially smoothed value for the 12 month using a smoothing coefficient of W = 0.25 if the exponentially smooth value for the 10 and 11 month are 9,477.7776 and 9,411.8332,respectively?
Q4) Referring to Table 16-10,the residuals for the second-order autoregressive model are ________,________,________,and ________.
Q5) Referring to Table 16-4,exponential smoothing with a weight or smoothing constant of 0.2 will be used to forecast wine sales.The forecast for 2011 is ________.
Q6) Referring to Table 16-13,you can conclude that the quadratic term in the quadratic-trend model is statistically significant at the 5% level of significance.
A)True
B)False
Q7) Referring to Table 16-8,the fitted value for 1990 is ________.
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Chapter 17: Statistical Applications in Quality Management
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Sample Questions
Q1) Which of the following is not part of the DMAIC process in Six Sigma management?
A)Define
B)Do
C)Analyze
D)Control
Q2) C<sub>pk</sub> > 1 indicates that the process average is exactly 3 standard deviations away from the closest specification limit.
A)True
B)False
Q3) Referring to Table 17-3,suppose the analyst constructs an R chart to see if the variability in production times is in-control.What is the upper control limit for this R chart?
A)10.66
B)9.37
C)7.98
D)6.34
Q4) Referring to Table 17-7,what is the value of the CPU index?
Q5) Referring to Table 17-6,a p control chart is to be constructed for these data.The center line for the chart should be located at ________.
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Chapter 18: A Roadmap for Analyzing Data
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Sample Questions
Q1) An insurance company evaluates many variables about a person before deciding on an appropriate rate for automobile insurance.A representative from a local insurance agency selected a random sample of 100 insured drivers and recorded X,the amount of claims each made in the last 3 years.A Pareto chart can be used to present this information.
A)True
B)False
Q2) Data on the amount of money made in a year by 1,000 families in a small town were collected.You want to know if the money made is normally distributed.Which of the following would you use?
A)Bar chart
B)Scatter plot
C)Boxplot
D)Time-series plot
Q3) Data were collected on the amount of detergent used in gallons in a month by 25 drive-through car wash operations in Phoenix.You can use a time-series plot to present this information.
A)True
B)False
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Chapter 19: Questions that Involve Online Topics
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Sample Questions
Q1) Referring to Table 6-1 and assuming that the number of computers that requires repair on a given day follows a binomial distribution,compute the probability that there will be no more than 8 computers that require repair on a given day using a normal approximation.
Q2) Blossom's Flowers purchases roses for sale for Valentine's Day.The roses are purchased for $10 a dozen and are sold for $20 a dozen.Any roses not sold on Valentine's Day can be sold for $5 per dozen.The owner will purchase 1 of 3 amounts of roses for Valentine's Day: 100,200,or 400 dozen roses.The payoff for buying 200 dozen roses and selling 100 dozen roses at the full price is
A)$2,000.
B)$1,000.
C)$500.
D)-$500.
Q3) Referring to Table 16-1,what is the unweighted aggregate price index for the group of three energy items in year 3 using year 1 as the base year?
Q4) Referring to Table 19-6,what would be the expected profit if the student had perfect information on whether the exam will be easy or difficult?
Q5) Referring to Table 19-6,how many possible courses of action are there?
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