Essentials of Business Analytics 1st Edition by TBtutors

Type:

Solution Manual

Resource:

Essentials of Business Analytics

Edition:

1st Edition

Author(s):

Jeffrey D. Camm James J. Cochran Michael J. Fry Jeffrey W. Ohlmann David R. Anderson

Chapter 1: Introduction 1. The decisions concerning an organization’s goals and future plans are called a. financial decisions. b. tactical decisions. c. strategic decisions. d. operational decisions. Answer: C Difficulty: Easy LO: 1.1, Page 4 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Strategic decisions involve higher-level issues concerned with the overall direction of the organization. 2. Tactical decisions define: a. the day-to-day activities of the organization. b. the goals and plans of the organization. c. the domain of operations managers, who are close to the customer. d. the steps taken to achieve the goals and objectives. Answer: D Difficulty: Medium LO: 1.1, Page 4 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Tactical decisions concern how the organization should achieve the goals and objectives set by its strategy. 3. Picks and Axes Inc. is an Internet-based retail seller of hiking boots and mountaineering gear. The company decides to open retail stores across the major areas of the city to help complement its Internet-based strategy. This activity would be categorized as a(n) a. tactical decision. b. operational decision. c. strategic decision. d. financial decision. Answer: C Difficulty: Medium LO: 1.1, Page 4 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Strategic decisions involve higher-level issues concerned with the overall direction of the organization; these decisions define the organization’s overall goals and aspirations

for the future. Strategic decisions are usually the domain of higher-level executives and have a time horizon of three to five years. 4. _____ is the most critical step in a decision making process. a. Choosing an alternative b. Identifying and defining the problem c. Evaluating the alternatives d. Determining the set of alternatives Answer: B Difficulty: Medium LO: 1.2, Page 5 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Step 1 of decision making, identifying and defining the problem, is the most critical. Only if the problem is well-defined, with clear metrics of success or failure (step 2), can a proper approach for solving the problem (steps 3 and 4) be devised. Decision making concludes with the choice of an alternative (step 5). 5. Firms guided by data-driven decision making have a. higher market value. b. lower productivity. c. higher risk. d. lower profit. Answer: A Difficulty: Medium LO: 1.2, Page 5 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Firms guided by data-driven decision making have higher productivity and market value and increased output and profitability. 6. ______ encompasses reports, data dashboards, and descriptive statistics to describe the past data. a. Predictive analytics b. Descriptive analytics c. Prescriptive analytics d. Decision analysis Answer: B Difficulty: Easy LO: 1.3, Page 5 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC:

Feedback: Descriptive analytics encompasses the set of techniques that describes what has happened in the past. 7. Information on the number of shipments, how much was included in each shipment, the date each shipment was sent, and so on extracted from the manufacturing plant’s database refers to ______. a. spreadsheet models b. data dashboards c. data mining d. data query Answer: D Difficulty: Medium LO: 1.3, Page 6 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: A data query is a request for information with certain characteristics from a database. 8. Corporate-level managers use ______ to summarize sales by region, current inventory levels, and other company-wide metrics all in a single screen. a. simulation b. crosstabulation c. data dashboards d. tables Answer: C Difficulty: Medium LO: 1.3, Page 6 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: For corporate-level managers, daily data dashboards might summarize sales by region, current inventory levels, and other company-wide metrics. 9. ______ helps in constructing a mathematical model to predict the future sales, based on past data. a. Predictive analytics b. Decision analysis c. Prescriptive analytics d. Descriptive analytics Answer: A Difficulty: Easy LO: 1.3, Page 6 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC:

Feedback: Predictive analytics consists of techniques that use models constructed from past data to predict the future. 10. Which of the following techniques is used in predictive analytics? a. Data dashboards b. Linear regression c. Data visualization d. Optimization models Answer: B Difficulty: Medium LO: 1.3, Page 6 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Linear regression, time series analysis, some data-mining techniques, and simulation, often referred to as risk analysis, all fall under the banner of predictive analytics. 11. A retail store owner offers a discount on product A and predicts that, the customers would purchase products B and C in addition to product A. Identify the technique used to make such a prediction. a. Data query b. Simulation c. Data mining d. Data dashboards Answer: C Difficulty: Medium LO: 1.3, Page 6 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Data mining is a technique used to find patterns or relationships among elements of the data in a large database. 12. ______ is used in the pharmaceutical industry to assess the risk of introducing a new drug. a. Data dashboards b. Charts c. Spreadsheet models d. Simulation Answer: D Difficulty: Medium LO: 1.3, Page 6 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC:

Feedback: Simulation involves the use of probability and statistics to construct a computer model to study the impact of uncertainty on a decision. 13. Which of the following analytical techniques helps us arrive at the best decision? a. Predictive analytics b. Data mining c. Prescriptive analytics d. Descriptive analytics Answer: C Difficulty: Medium LO: 1.3, Page 6 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Prescriptive analytics indicate a best course of action to take; that is, the output of a prescriptive model is a best decision. 14. Supply network design models provide the cost-minimizing plant and distribution center locations subject to meeting the customer service requirements. This model is referred as a. Optimization models. b. Forecasting models. c. Data mining models. d. Network models. Answer: A Difficulty: Easy LO: 1.3, Page 7 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Optimization models give the best decision subject to constraints of the situation. 15. Simulation optimization helps: a. in identifying the constraints of the situation. b. to find good decisions in highly complex and highly uncertain settings. c. in assigning values to outcomes. d. to model certainty with optimization techniques. Answer: B Difficulty: Medium LO: 1.3, Page 7 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Simulation optimization, combines the use of probability and statistics to model uncertainty with optimization techniques to find good decisions in highly complex and highly uncertain settings.

16. When a decision maker is faced with several decision alternatives and an uncertain set of future events. He/She uses ______ to develop an optimal strategy. a. utility theory b. predictive analytics c. data mining d. decision analysis Answer: D Difficulty: Medium LO: 1.3, Page 7 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: The techniques of decision analysis can be used to develop an optimal strategy when a decision maker is faced with several decision alternatives and an uncertain set of future events. 17. ______ assigns values to outcomes based on the decision maker’s attitude toward risk, loss, and other factors. a. Simulation optimization b. Utility theory c. Optimization model d. Data dashboard Answer: B Difficulty: Medium LO: 1.3, Page 8 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Decision analysis also employs utility theory, which assigns values to outcomes based on the decision maker’s attitude toward risk, loss, and other factors. 18. Walmart handles over one million purchase transactions per hour. Although the data represents opportunities, a. it also presents analytical challenges from a processing point of view. b. it can be processed, or analyzed in a reasonable amount of time. c. it has itself led to a decrease in the use of analytics. d. it seldom has valuable applications of analytics. Answer: A Difficulty: Medium LO: 1.4, Page 8 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Although big data represents opportunities, it also presents analytical challenges from a processing point of view.

19. Which of the following examples best describes big data? a. Facebook processes one thousand picture uploads per day. b. Five hundred cell-phone owners around the world generate vast amounts of data by calling, texting, tweeting and browsing the web on a daily basis. c. The amount of data created every 48 hours is equivalent to the entire amount of data created from the dawn of civilization. d. 9 percent of the data in the world today has been created in the last two years. Answer: C Difficulty: Medium LO: 1.4, Page 8 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Big data is simply a set of data that cannot be managed, processed, or analyzed with commonly available software in a reasonable amount of time. 20. Advanced analytics in a few instances refers to: a. descriptive and prescriptive analytics. b. simulation.. c. predictive and prescriptive analytics. d. decision analysis. Answer: C Difficulty: Medium LO: 1.5, Page 9 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Predictive and prescriptive analytics are sometimes therefore referred to as advanced analytics. 21. In a financial sector, we use ______ to construct financial instruments such as derivatives. a. descriptive and prescriptive models b. predictive models c. descriptive models d. prescriptive models Answer: B Difficulty: Medium LO: 1.5, Page 9 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Predictive models are used to forecast future financial performance, to construct financial instruments such as derivatives, etc. 22. GE Asset Management uses optimization models to:

a. assess the risk of investment portfolios. b. forecast future financial performance. c. successfully manage commercial real estate risk. d. decide on how to invest its cash received from insurance policies. Answer: D Difficulty: Medium LO: 1.5, Page 9 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: GE Asset Management uses optimization models to decide how to invest its own cash received from insurance policies and other financial products. 23. In order to manage an organization’s human resource activities such as employee hiring, tracking and influencing employee retention, the HR personnel use ______. a. descriptive and predictive analytics b. prescriptive analytics c. predictive and prescriptive analytics d. predictive analytics Answer: A Difficulty: Medium LO: 1.5, Page 10 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: The HR analytics team uses descriptive and predictive analytics to support employee hiring and to track and influence retention. 24. A better understanding of consumer behavior through analytics leads to a(n): a. decrease in demand. b. assured increase in sales. c. more effective pricing strategies. d. poor customer satisfaction. Answer: C Difficulty: Easy LO: 1.5, Page 10 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: A better understanding of consumer behavior through analytics leads to the better use of advertising budgets, more effective pricing strategies, improved forecasting of demand, improved product line management, and increased customer satisfaction and loyalty. 25. All the three descriptive, predictive, and prescriptive analytics are used in:

a. b. c. d.

Marketing and HR analytics. Marketing and Health Care analytics. Health Care and HR analytics. Health Care and Financial analytics.

Answer: B Difficulty: Easy LO: 1.5, Page 10 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Descriptive, predictive, and prescriptive analytics are all used in marketing and healthcare. 26. A children’s apparel manufacturer used descriptive analytics: a. to present supply chain to managers visually. b. to achieve efficiency in delivery of goods. c. to schedule staff and vehicle for delivery. d. to plan capacity utilization by incorporating the inherent uncertainty in commodities pricing. Answer: A Difficulty: Easy LO: 1.5, Page 11 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: The women’s apparel manufacturer has successfully used descriptive analytics to present the status of its supply chain to managers visually. 27. The U.S. Internal Revenue Service uses ______ to identify patterns that distinguish questionable annual personal income tax filings. a. utility theory b. prescriptive analytics c. data mining d. decision analysis Answer: C Difficulty: Easy LO: 1.5, Page 12 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: The U.S. Internal Revenue Service has used data mining to identify patterns that distinguish questionable annual personal income tax filings. 28. Franchises across several major sports dynamically adjust ticket prices throughout the season to reflect the relative attractiveness and potential demand for each game by using: a. data mining.

b. predictive analytics. c. simulation. d. prescriptive analytics. Answer: D Difficulty: Easy LO: 1.5, Page 12 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Using prescriptive analytics, franchises across several major sports dynamically adjust ticket prices throughout the season to reflect the relative attractiveness and potential demand for each game. 29. Web sites and social media sites use descriptive and advanced analytics to data collected in online experiments: a. to position ads for the promotion of products and services. b. to schedule staff and vehicle. c. to design its premium seating offerings. d. to decide how much to offer players in contract negotiations. Answer: A Difficulty: Easy LO: 1.5, Page 12 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Leading companies apply descriptive and advanced analytics to data collected in online experiments to determine the best way to configure Web sites, position ads, and utilize social networks for the promotion of products and services. 30. The disadvantage of online experimentation is: a. it fails to promote sales. b. it uses trial-and-error to statistically determine the difference in the Web site traffic and sales. c. its experiments are conducted with risk in disruption of the overall business. d. it fails to track the results of different versions of a Web site. Answer: B Difficulty: Easy LO: 1.5, Page 13 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Feedback: Online experiments are proving to be invaluable because they enable the company to use trial-and-error in determining statistically what makes a difference in their Web site traffic and sales.

Chapter 2: Descriptive Statistics 1. _____ provide facts and figures that can be used for analysis and interpretation of a population of interest. a. Data b. Variables c. Range d. Query Answer: A Difficulty: Easy LO: 2.1, Page 16 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: Data are the facts and figures collected, analyzed, and summarized for presentation and interpretation. 2. A variable is defined as a a. quantity of interest that can take on same values. b. set of values. c. quantity of interest that can take on different values. d. characteristic that takes on same values from a set of values. Answer: C Difficulty: Easy LO: 2.1, Page 16 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: A characteristic or a quantity of interest that can take on different values is known as a variable. 3. A set of values corresponding to a set of variables is defined as a(n) _____. a. quantity b. event c. factor d. observation Answer: D Difficulty: Easy LO: 2.1, Page 16 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics

Feedback: An observation is a set of values corresponding to a set of variables. 4. The difference in a variable measured over observations (time, customers, items, etc.) is called as _____. a. observed differences b. variation c. variable change d. descriptive analytics Answer: B Difficulty: Moderate LO: 2.1, Page 16 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: Variation is the difference in a variable measured over observations (time, customers, items, etc.). 5. A variable whose values are not known with certainty is called a _____. a. certain variable b. random variable c. constant variable d. decision variable Answer: B Difficulty: Moderate LO: 2.1, Page 17 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: A quantity whose values are not known with certainty is called a random variable, or uncertain variable. 6. _____ act(s) as a representative of the population. a. The analytics b. The variance c. A sample d. The random variables Answer: C Difficulty: Easy LO: 2.2, Page 17 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics

Feedback: A subset of the population is known as a sample, and it acts as a representative of the population. 7. The act of collecting data that are representative of the population data is called a. random sampling. b. sample data. c. population sampling. d. applications of business analytics. Answer: A Difficulty: Easy LO: 2.2, Page 18 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: A representative sample can be gathered by random sampling of the population data. 8. The data on grades (A, B, C, and D) scored by all students in a test is an example of a. quantitative data. b. sample data. c. categorical data. d. analytical data. Answer: C Difficulty: Easy LO: 2.2, Page 18 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: If arithmetic operations cannot be performed on the data, they are considered categorical data. 9. The data on the time taken by 10 students in a class to answer a test is an example of a. population data. b. categorical data. c. time series data. d. quantitative data. Answer: D Difficulty: Easy LO: 2.2, Page 18 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics

Feedback: Data are considered quantitative data if numeric and arithmetic operations, such as addition, subtraction, multiplication, and division, can be performed on them. 10. _____ are collected from several entities at the same point in time. a. Time series data b. Categorical and quantitative data c. Cross-sectional data d. Random data Answer: C Difficulty: Moderate LO: 2.2, Page 18 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: Cross-sectional data are collected from several entities at the same, or approximately the same, point in time. 11. Data collected from several entities over several time periods is a. categorical and quantitative data. b. time series data. c. source data. d. cross-sectional data. Answer: B Difficulty: Easy LO: 2.2, Page 18 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: Time series data are collected over several time periods. 12. In a(n) _____, one or more variables are identified and controlled or manipulated so that data can be obtained about how they influence the variable of interest identified first. a. experimental study b. observational study c. categorical study d. variable study Answer: A Difficulty: Easy LO: 2.2, Page 18 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics

Feedback: In an experimental study, a variable of interest is first identified. Then one or more other variables are identified and controlled or manipulated so that data can be obtained about how they influence the variable of interest. 13. The data collected from the customers in restaurants about the quality of food is an example of a. variable study. b. cross-sectional study. c. experimental study. d. observational study. Answer: D Difficulty: Moderate LO: 2.2, Page 19 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: Nonexperimental, or observational, studies make no attempt to control the variables of interest. Some restaurants use observational studies to obtain data about customer opinions on the quality of food, quality of service, atmosphere, and so on. 14. When the data are large and when it is difficult to analyze all at once, which of the following feature in Excel is used to make the data more manageable and to develop insights? a. Frequency table b. Sorting and filtering c. Fill color d. Charts Answer: B Difficulty: Easy LO: 2.3, Page 21 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: Excel contains option to sort and filter data so that one can identify patterns of the data more easily. 15. A summary of data that shows the number of observations in each of several nonoverlapping bins is called a. a frequency distribution. b. a sample summary. c. a bin distribution. d. an observed distribution. Answer: A Difficulty: Easy LO: 2.4, Page 25

Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: A frequency distribution is a summary of data that shows the number (frequency) of observations in each of several nonoverlapping classes, typically referred to as bins, when dealing with distributions. 16. Which of the following gives the proportion of items in each bin? a. Frequency b. Percent frequency c. Relative frequency d. Bin proportion Answer: C Difficulty: Easy LO: 2.4, Page 27 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: The relative frequency of a bin equals the fraction or proportion of items belonging to a class. 17. Compute the relative frequencies for the data given in the table below:

Grades A B C D Total

Number of students 16 28 33 13 90

a. 0.31, 0.14, 0.37, 0.18 b. 0.37, 0.14, 0.31, 0.18 c. 0.14, 0.31, 0.37, 0.18 d. 0.18, 0.31, 0.37, 0.14 Answer: D Difficulty: Moderate LO: 2.4, Page 27 Bloom’s: Application BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: The relative frequency of a bin equals the fraction or proportion of items belonging to a class. Relative frequency of a bin = Frequency of the bin /n.

18. Consider the data below. What percentage of students scored grade C?

Grades A B C D Total

Number of students 16 28 33 13 90

a. 33% b. 31% c. 37% d. 28% Answer: C Difficulty: Moderate LO: 2.4, Page 27 Bloom’s: Application BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: A percent frequency distribution summarizes the percent frequency of the data for each bin. The percent frequency of a bin is the relative frequency multiplied by 100. 19. Which of the following are necessary to be determined to define the classes for a frequency distribution with quantitative data? a. Number of nonoverlapping bins, width of each bin, and bin limits b. Width of each bin and bin lower limits c. Number of overlapping bins, width of each bin, and bin upper limits d. Width of each bin and number of bins Answer: A Difficulty: Moderate LO: 2.4, Page 28 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: The three steps necessary to define the classes for a frequency distribution with quantitative data are: determine the number of nonoverlapping bins, determine the width of each bin, and determine the bin limits. 20. The purpose of using enough bins is to show the a. number of observations. b. number of variables. c. variation in the data.

d. correlation in the data. Answer: C Difficulty: Moderate LO: 2.4, Page 28 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: The goal is to use enough bins to show the variation in the data, but not so many classes that some contain only a few data items. 21. _____ is a graphical summary of data previously summarized in a frequency distribution. a. Box plot b. Histogram c. Line chart d. Scatter chart Answer: B Difficulty: Easy LO: 2.4, Page 31 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: A common graphical presentation of quantitative data is a histogram. This graphical summary can be prepared for data previously summarized in either a frequency, a relative frequency, or a percent frequency distribution. 22. Identify the shape of the distribution in the below figure.

a. Moderately skewed left b. Symmetric

c. Highly skewed right d. Moderately skewed right Answer: D Difficulty: Moderate LO: 2.4, Pages 33-34 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: A histogram is said to be skewed to the right if its tail extends farther to the right than to the left. The given histogram is, therefore, moderately skewed to the right. 23. The _____ shows the number of data items with values less than or equal to the upper class limit of each class. a. cumulative frequency distribution b. frequency distribution c. percent frequency distribution d. relative frequency distribution Answer: A Difficulty: Easy LO: 2.4, Page 34 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: The cumulative frequency distribution shows the number of data items with values less than or equal to the upper class limit of each class. 24. The _____ is a point estimate of the population mean for the variable of interest. a. sample mean b. median c. Sample d. geometric mean Answer: A Difficulty: Moderate LO: 2.5, Page 35 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: The sample mean is a point estimate of the (typically unknown) population mean for the variable of interest. 25. Compute the mean of the following data: 56 42 37 29 45 51

a. 42.8 b. 52.1 c. 40.6 d. 39.4 Answer: C Difficulty: Moderate LO: 2.5, Page 35 Bloom’s: Application BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: The mean provides a measure of central location for the data. It is computed as: Mean =

56+42+37+29+45+51+30+25+34+57 406 = = 40.6. 10 10

26. Compute the median of the following data: 32 41 36 24 29 30 a. 28 b. 31 c. 40 d. 34

Answer: B Difficulty: Moderate LO: 2.5, Pages 36-37 Bloom’s: Application BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: The median is the value in the middle when the data are arranged in ascending order (smallest to largest value). Computed as: Median = average of middle two values = 27. Compute the mode for the following data: 12 16 19 10 12 11 a. 21 b. 11 c. 12 d. 10

30+32 2

= 31.

Answer: C Difficulty: Moderate LO: 2.5, Page 37 Bloom’s: Application BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: The mode is the value that occurs most frequently in a data set. The value 12 occurs with the greatest frequency of 3. Therefore, the mode is 12.

28. Compute the geometric mean for the following data on growth factors of an investment for 10 years: 1.10 0.50 0.70 1.21 1.25 1.12 1.16 1.11 1.13 1.22 a. 1.0221 b. 1.0148 c. 1.0363 d. 1.1475 Answer: B Difficulty: Moderate LO: 2.5, Pages 38-39 Bloom’s: Application BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: The geometric mean is a measure of location that is calculated by finding the nth root of the product of n values. Geometric mean = 10

√(1.1)(0.5)(0.7)(1.21)(1.25)(1.12)(1.16)(1.11)(1.13)(1.22) = 1.0148.

29. The simplest measure of variability is the a. variance. b. standard deviation. c. coefficient of variation. d. range. Answer: D Difficulty: Easy LO: 2.6, Page 41 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: The simplest measure of variability is the range. 30. The variance is based on the a. deviation about the median. b. number of variables. c. deviation about the mean. d. correlation in the data. Answer: C Difficulty: Easy LO: 2.6, Page 41 Bloom’s: Knowledge BUSPROG: Analytic Skills DISC: Descriptive Statistics

Feedback: The variance is based on the deviation about the mean, which is the difference between the value of each observation (xi) and the mean. 31. For the following sample data, compute the variance. 32

a. 45.6 b. 35.5 c. 41.04 d. 29.4 Answer: A Difficulty: Moderate LO: 2.6, Page 42 Bloom’s: Application BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: The variance is based on the deviation about the mean, which is the difference between the value of each observation (xi) and the mean. It is computed as, s2 =

∑(𝑥𝑖 −𝑥̅ )2 𝑛−1

= 410.4/9 = 45.6.

32. Compute the standard deviation for the following sample data. 32 41 36 24 29 30 40 22 25 a. 5.96 b. 6.41 c. 5.42 d. 6.75

Answer: D Difficulty: Moderate LO: 2.6, Page 43 Bloom’s: Application BUSPROG: Analytic Skills DISC: Descriptive Statistics Feedback: The standard deviation is defined to be the positive square root of the variance. It is computed as s = √s2 = √45.6 = 6.75. 33. Compute the coefficient of variation for the following sample data. 32 41 36 24 29 30 40 22 25 a. 18.64 percent b. 21.36 percent c. 20.28 percent d. 21.67 percent Answer: B