MAT 540 Midterm Exam
1. Deterministic techniques assume that no uncertainty exists in model parameters.
2. A continuous random variable may assume only integer values within a given interval.
3. An inspector correctly identifies defective products 90% of the time. For the next 10 products, the probability that he makes fewer than 2 incorrect inspections is 0.736.
4. A decision tree is a diagram consisting of circles decision nodes, square probability nodes, and branches.
5. Excel can only be used to simulate systems that can be represented by continuous random variables.
6. Starting conditions have no impact on the validity of a simulation model.
7. Data cannot exhibit both trend and cyclical patterns.
8. The Delphi develops a consensus forecast about what will occur in the future.
9. A company markets educational software products, and is ready to place three new products on the market. Past experience has shown that for this particular software, the chance of “success” is 80%. Assume that the probability of success is independent for each product. What is the probability that exactly 1 of the 3 products is successful?
10. In Bayesian analysis, additional information is used to alter the __________ probability of the occurrence of an event.
11. The __________ is the expected value of the regret for each decision.
12. A seed value is a(n)
13. Random numbers generated by a __________ process instead of a __________ process are pseudorandom numbers.
14. Pseudorandom numbers exhibit __________ in order to be considered truly random.
15. In the Monte Carlo process, values for a random variable are generated by __________ a probability distribution.
16. __________ is a linear regression model relating demand to time.
17. __________ is a measure of the strength of the relationship between independent and dependent variables.
18. __________ is the difference between the forecast and actual demand.
19. Which of the following possible values of alpha would cause exponential smoothing to respond the most slowly to sudden changes in forecast errors?
20. Consider the following graph of sales. Which of the following characteristics is exhibited by the data?
21. __________ methods are the most common type of forecasting method for the long-term strategic planning process.
22. Given the following data on the number of pints of ice cream sold at a local ice cream store for a 6-period time frame:
If the forecast for period 5 is equal to 275, use exponential smoothing with α = .40 to compute a forecast for period 7.
23. In exponential smoothing, the closer alpha is to __________, the greater the reaction to the most recent demand.
24. __________ is a category of statistical techniques that uses historical data to predict future behavior.
25. An online sweepstakes has the following payoffs and probabilities. Each person is limited to one entry. The probability of winning at least $1,000.00 is ________.
26. The drying rate in an industrial process is dependent on many factors and varies according to the following distribution.
27. A loaf of bread is normally distributed with a mean of 22 oz and a standard deviation of 0.5 oz. What is the probability that a loaf is larger than 21 oz? Round your answer to four places after the decimal.
28. A life insurance company wants to estimate their annual payouts. Assume that the probability distribution of the lifetimes of the participants is approximately a normal distribution with a mean of 68 years and a standard deviation of 4 years. What proportion of the plan recipients would receive payments beyond age 75? Round your answer to four places after the decimal.
29. The local operations manager for the IRS must decide whether to hire 1, 2, or 3 temporary workers. He estimates that net revenues will vary with how well taxpayers comply with the new tax code. The following payoff table is given in thousands of dollars (e.g. 50 = $50,000).
30. Consider the following decision tree. What is the expected value at node 4? Round your answer to the nearest whole number. Do not include the dollar sign “$” in your answer.
31. Given the following random number ranges and the following random number sequence: 62, 13, 25, 40, 86, 93, determine the average demand for the following distribution of demand.
32. This is the data from the last 4 weeks: Use the equation of the regression line to forecast the increased sales for when the number of ads is 10.
33. Calculate the absolute value of the average error. Use three significant digits after the decimal.
34. The following data summarizes the historical demand for a product. Use exponential smoothing with α = .2 and the smoothed forecast for July is 32. Determine the smoothed forecast for August.
35. Given the following data, compute the MAD for the forecast.
36. The following data summarizes the historical demand for a product
If the forecasted demand for June, July and August is 32, 38 and 42, respectively, what is MAPD? Write your answer in decimal form and not in percentages. For example, 15% should be written as 0.15. Use three significant digits after the decimal.
37. Robert wants to know if there is a relation between money spent on gambling and winnings.
What is the coefficient of determination? Note: please report your answer with 2 places after the decimal point.
38. Consider the following annual sales data for 2001-2008.
Calculate the correlation coefficient . Use four significant digits after the decimal.
39. The following sales data are available for 2003-2008.
Determine a 4-year weighted moving average forecast for 2009, where weights are W1 = 0.1, W2 = 0.2, W3 = 0.2 and W4 = 0.5.
40. Given the following data on the number of pints of ice cream sold at a local ice cream store for a 6-period time frame: Compute a 3-period moving average for period 6. Use two places after the decimal.