Statistics-MBA624-MSF624 – Exam 2 (Take-home) – Fall 2015

MBA624-MSF624 – Exam 2 (Take-home) – Fall 2015Data_Exam2_Fall2015_MBA-MSF624.xlsxData for Q 7 – 13 is in worksheet named Problems 7-13 in the Excel file, on page 1.7. Management is considering opening an additional dealership with 14 sales people. Usinglinear regression, what is the expected weekly total profit for the new dealership?A. $41592.41B. $43,484.83C. $48,231.74D. $23,471.258. Management asks whether using number of sales people to predict total profit is areasonable approach. Which of the following is the best answer to that question?a. Yes, it is intuitively logical that the more sales people the company has, the betterit can serve the customers.b. No, a correlation coefficient value of 0.02 indicates a bad linear fit to the datac. Yes, a correlation coefficient value of 0.02 being positive indicates a positiverelationship so the more sales people the betterd. No, a coefficient of determination value of 0.02 indicates a bad fit to the data.9. An old saying in car business is, “the more cars you sell, the higher your total profits willbe”. Is this statement accurate for this dealership?a. Yes, because the number of new cars sold each week and used cars sold eachweek both have positive correlation values with total profit.b. Yes, because the number of new cars sold each week and used cars sold eachweek both have positive coefficient of determination values with total profit.c. No, number of new cars sold each week has a positive correlation value with totalprofit, and used cars sold each week has a negative correlation value with totalprofit.d. Yes, number of new cars sold each week and used cars sold each week both havepositive intercept values from linear regression with total profit.10. Management believes that a new dealership can sell 12 new cars each week. What is the90% confidence interval for expected total profit?a. $49,072.61 to $53,662.37b. $36,907.97 to $65,827.01c. $45,812.31 to $52,127.96d. $12,0148.35 to $58,147.3811. Management is admitting that number of new cars sold each week is the key to predictingtotal profit and asks you to confirm their belief. Which of the following statementswould you use to answer management?a. Yes, everyone knows the more new cars you sell the higher the profit1MBA624-MSF624 – Exam 2 (Take-home) – Fall 2015b. Yes, number of new cars sold each week is a good predictor of profit because thecoefficient of determination is 0.66 and is the population coefficient ofdetermination is statistically different from zero at the 0.05 level.c. Yes, number of new cars sold each week is a good predictor of profit because thecoefficient of determination is 0.81 and is the population coefficient ofdetermination is statistically different from zero at the 0.05 level.d. No, number of new cars sold each week is not a good predictor of profit becausethe coefficient of determination is 0.05 and it can’t be said that the populationcoefficient of determination is statistically different from zero at the 0.05 level.12. Much to your surprise, the company CEO (who everyone thought was losing his mind) isactually a world renowned mathematician and he asks you if the assumptions regardinglinear regression between total profit and number of new cars sold are met. You say yes,and quickly show him which of the following graphics to prove your point?a.b.c.2MBA624-MSF624 – Exam 2 (Take-home) – Fall 2015d. Both A and B are used13. Jill, an aggressive member of the management team, has suggested the company shouldclose all their used-car lots. She proposes to simply sell every used car taken in on trade,to the wholesale market. You are asked to analyze the data and worthiness of thissuggestion, and offer an opinion based on your analysis. Which of the following is thebest response?a. Jill is incorrect because every used car sold results in an additional profit of$3,298 with a correlation coefficient value of 0.81.b. While Jill appears to be correct since a used-car sale results in an average loss of~$1,684, you cannot say, at the 0.05 significance level, that the population slope isdifferent than zero.c. Jill appears to be correct since a used-car sale results in an average loss of~$1,684, and the correlation coefficient value of 0.22 is considered good.d. You suggest that analysis of only one week of data (which is contained in theExcel file) is not sufficient information to draw a solid conclusion.e. Both B and D are correct.Use the following time series data to answer Questions 14 – 17.Quarter1234Year 124,85021,30019,50024,422Year 222,13018,71119,60223,005Year 321,70517,01218,32622,639Year 416,03918,52620,08723,236Year 519,23616,77814. Compute a 4-Quarter moving average forecast for Qtr. 3 of Year 5 (round to the nearestunit)a. 23,326b. 19,834c. 19,379d. 19,47215. Compute a 3-Quarter weighted moving average forecast for Quarter 3 of Year 5. Usethese weights: 7 on the prior quarter, and then 4 and 1 (respectively) on quarters prior tothat (rounded to the nearest unit).3MBA624-MSF624 – Exam 2 (Take-home) – Fall 2015a.b.c.d.17,89018,13619,83419,75016. Use exponential smoothing method with α = 0.33 to forecast demand in Quarter 3 of Year5. Assume Forecast for Q1 of Year 1= 24,850. Round off the final answer to nearestinteger.a. 19,472b. 23,218c. 17,890d. 19,03017. Examine the 3 methods you used in the previous 3 problems. Which is best to use for thistime series?A. 4-Quarter moving averageB. 3-Quarter weighted moving averageC. Exponential smoothingD. They are all equally good18. Use the following sales data to compute a trend- and seasonally-adjusted forecast forquarter 3 of year 7. Round off seasonal indexes to two decimals.YearQuarter1234A.B.C.D.200886.49391.9107.3200995.3102.798.6107.9201093.5100.999.4113.7201199.1103101.2115.62012103.4108.6109.5122.32013113.4113.5113.2127.1109.4125.8114.6115.7Use the following for Questions 19 – 20.There is only one critical path composed of activities 1,3,4,5 in a PERT project.We also know the time estimates listed below (in days) for those activities.ActivityOptimisticMostLikelyPessimistic4MBA624-MSF624 – Exam 2 (Take-home) – Fall 201512345613218342101055213a.b.c.d.19. What is the expected completion time for this project?13 days17 days23 days68 daysa.b.c.d.20. The project was promised to be delivered in 22 days. Calculate the probability that wewill miss that delivery date (i.e., the project will take longer than 22 days to finish).0.95350.68020.48080.31915

 

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