QM Test Bank

1. The correlation coefficient resulting from a particular regression analysis was 0.25. What
was the coefficient of determination?
0.0625
2. Which of the following equalities is correct?
SST = SSR + SSE
3. The following is a payoff table giving costs for various situations.
State 1 State 2 State 3
Alternative 1 65 18 81
Alternative 2 42 22 26
Alternative 3 71 91 64
Alternative 4 20 77 33

What is the opportunity loss for Alternative 4?

0, 59, 7
4. Which of these statements is best?
One purpose of regression is to understand the relationship between variables.
5. Using the following table:
Y X
5 7
7 6
3 2

What is the estimate of b1 in the regression Y=bo + b1 X?

0.571
6. Using the following table:
Y X
5 7
7 6
3 2

What is the estimate of b0 in the regression Y=bo + b1 X?

2.413
7. A new young mother has opened a cloth diaper service. She is interested in simulating the
number of diapers required for a one-year-old. She hopes to use this data to show the cost
 effectiveness of cloth diapers. The table below shows the number of diapers demanded
daily and the probabilities associated with each level of demand.
Daily Demand Probability Interval of Random Numbers
5 0.30 01-30
6 0.50 31-80
7 0.05 81-85
8 0.15 86-00

According to the table, what is the cumulative probability that demand is less than or
equal to 7?
0.85
According to the table, if the random number 82 were generated for a particular day,
what would the simulated demand be for that day?
7
According to the table, if the random number 40 were generated for a particular day,
what would the simulated demand be for that day?
6
8. Using the following table:
Y X
5 7
7 6
3 2

What is the value of the coefficient of determination for the regression Y=bo + b1 X?
0.571
9. A pessimistic decision-making criterion is
Maximin
10. A pawn shop in Arlington, Texas, ha a drive-through window to better serve customers.
The following tables provide information about the time between arrivals and the service
times required at the window on a particular busy day of the week. All times are in minutes,
Time Between Arrivals Probability Interval of Random Numbers
1 0.1 01-10
2 0.3 11-40
3 0.4 41-80
4 0.2 81-00

Service Time Probability Interval of Random Numbers

1 0.2 01-20
2 0.4 21-60
 3 0.3 61-90
4 0.1 91-00

The first random number generated for arrivals is used to tell when the first customer
arrives after opening.
According to the table, the time between successive arrivals is 1.2, 3 or 4 minutes. If the
store opens at 8:00 a.m. and random numbers are used to generate arrivals, what time would
the first customer arrive if the first random number were 02?
8:01
11. Consider the following linear programming problem:
Maximize: 14X + 10Y
Subject to:
4X + 6Y ≤ 460
10X + 5Y ≤ 500
All variable ≥ 0
The maximum possible value for the objective function is:
895
12. A plant manager considers the operational cost per hour of five machine alternatives. The
cost per hour is sensitive to three potential weather conditions: cold, mild, and warm. The
following table represents the operations cost per hour for each alternative-state of nature
combination:
States of Nature
Weather related cost per hour
Alternatives Cold cost/day Mild cost/day Warm cost/day
Machine 1 $50 $40 $45
Machine 2 $45 $42 $47
Machine 3 $40 $35 $54
Machine 4 $60 $25 $48
Machine 5 $45 $40 $45

Using the optimistic criterion, which alternative is best?

Machine 4
13. The following represents a project with known activity times. All times are in weeks.
Activity Immediate Predecessor Time
A - 4
B - 3
C A 2
D B 7
E C, D 4
F B 5

According to the table, compute the slack time for activity D.

0
14. Which of the following is not considered a criterion for decision making under uncertainty?
Random selection
15. Slack time in a network is the
Amount of time that an activity can be delayed without delaying the entire project
16. An air conditioning and heating repair firm conducted a study to determine if the average
outside temperature could be used to predict the cost of an electric bill for homes during the
winter months in Houston, Texas. The resulting regression equation was:
Y= 227.19 - 1.45X, where Y= monthly cost, X= average outside air temperature
If the temperature averaged 48 degrees during December, what is the forecasted cost of
December’s electric bill?
157.59
17. Consider the following linear programming problem:
Maximize 4X + 10Y
Subject to: 3X + 4Y ≤ 480
4X + 2Y ≤ 360
The feasible corner points are (48,84), (0,120), (0,0), (90,0). What is the maximum possible
value for the objective function?
1200
18. In decision making under ____, there are several possible outcomes for each alternative,
and the decision maker does not know the probabilities of the various outcomes.
Uncertainty
19. A pharmacy is considering hiring another pharmacist to better serve customers. To help
analyze this situation, records are kept to determine how many customers will arrive in any
10- minute interval. Based on 100 ten-minute intervals, the following probability
distribution has been developed and random numbers assigned to each event.
Number of arrivals Probability Interval of Random Numbers
6 0.2 01- 20
7 0.3 21- 50
8 0.3 51- 80
9 0.1 81- 90
10 0.1 91- 00
 According to the table, the number of arrivals in any 10-minute period is between 6 and
10 inclusive. Suppose the next three random numbers were 2, 81 and 18. These numbers
are used to simulate arrivals into the pharmacy. What would the average number of
arrivals per 10-minute period be based on this set of occurrences?
7
20. Consider the following linear programming problem:
Maximize:
5X + 6Y
Subject to:
4X + 2Y ≤ 420
1X + 2Y ≤ 120
All variables ≥ 0
Which of the following points (X, Y) is not a feasible corner point?
120, 0
21. Consider the following linear programming problem:
Minimize:
20X + 30Y
Subject to:
2X + 4Y ≤ 800
6X + 3Y ≤300
X, Y ≥ 0
What is the optimum solution to this problem (X, Y)?
(50, 0)
22. Nick has plans to open some pizza restaurants, but he is not sure how many to open. He has
prepared a payoff table to help analyze the situation.
States of Nature
Alternatives Good Market Fair Market Poor Market
Open 1 380,000 70,000 -400,000
Open 2 200,000 80,000 -200,000
Do nothing 0 0 0

Nick believes there is a 40 percent chance that the market will be good, a 30 percent chance
that it will be fair, and a 30 percent chance that it will be poor. A market research firm will analyze
market conditions and will provide a perfect forecast (they provide a money back guarantee). What
is the most that should be paid for this forecast?
 123,000
23. The following is a payoff table giving profits for various situations.
State 1 State 2 State 3
Probability 0.4 0.35 0.25
Alternative 1 45 37 83
Alternative 2 16 59 72
Alternative 3 23 65 91
Alternative 4 44 33 55

What is the expected value of perfect information?

8.8
24. As feasible solution to a linear programming problem
must satisfy all of the problem’s constraints simultaneously.
25. If computing a causal linear regression model of Y= a+ bX and the resultant r2 is very near
one, then one would be able to conclude that:
Y= a+ bX is a good forecasting method
26. A pharmacy is considering hiring another pharmacist to better serve customers. To help
analyze this situation, records are kept to determine how many customers will arrive in any
10- minute interval. Based on 100 ten-minute intervals, the following probability
distribution has been developed and random numbers assigned to each event.
Number of arrivals Probability Interval of Random Numbers
6 0.2 01- 20
7 0.3 21- 50
8 0.3 51- 80
9 0.1 81- 90
10 0.1 91- 00

According to the table, the number of arrivals in any 10-minute period is between 6 and
10 inclusive. Suppose the next three random numbers were 20, 50 and 79 and these were
used to simulate arrivals in the next three 10-minute intervals. How many customers
would have arrived during this 30-minute time period?
21
27. The project described by:
Activity Immediate Predecessor Time (days)
A -- 10
B A 4
C A 6
D B 7
E C 5
is best represented by which of the following networks?
 28. The correlation coefficient resulting from a particular regression analysis was -0.71. What
was the coefficient of determination?
0.504
29. The following represents a project with known activity times. All times are in weeks.
Activity Immediate Predecessor Time
A - 4
B - 3
C A 2
D B 7
E C, D 4
F B 5
G E, F 4

Using the data in the table, what is the minimum possible time required for completing the project?
18
30. Consider the following linear programming problem:
Maximize:
5X + 6Y
Subject to:
4X + 2Y ≤ 420
1X + 2Y ≤ 120
All variables ≥ 0
Which of the following points (X, Y) is feasible?
(60, 30)
 31. If computing a causal linear regression model of Y= a+ bX and the resultant r2 is very near
zero, then one would be able to conclude that:
Y= a+ bX is not a good forecasting method
32. The table below represents the probability distribution for machine breakdowns in a day of
operation.
Number of breakdowns Probability Interval of Random Numbers
0 0.35 1-35
1 0.20 36-55
2 0.25 56-80
3 0.20 81-00
What is the probability of at least 1 breakdown?
0.65
What is the cumulative probability of 1 breakdown?
0.55
33. The coefficient of determination resulting from a particularly regression analysis was 0.85.
What was the correlation coefficient, assuming a positive linear relationship?
0.922
34. The following represents a project with known activity times. All times are in weeks.
Activity Immediate Predecessor Time
A - 4
B - 3
C A 2
D B 7
E C, D 4
F B 5
Using the data in the table, compute the latest finish time for Activity E.
14
Using the data, what is the latest possible time that C may be started without delaying completion
of the project?
8
35. The following is a payoff table giving costs for various situations.
State 1 State 2 State 3
Alternative 1 45 37 83
Alternative 2 16 59 72
Alternative 3 23 65 91
Alternative 4 44 33 55

What decision should be made based on the Laplace criterion?

Alternative 4
 36. Consider the following linear programming problem:
Maximize 12X + 10Y
Subject to: 4X + 3Y ≤ 480
2X + 3Y ≤ 360
all variables ≥ 0
Which of the following points (X, Y) is feasible?
(30, 100)
37. The following is a payoff table giving costs for various situations.
State 1 State 2 State 3
Alternative 1 45 37 83
Alternative 2 16 59 72
Alternative 3 23 65 91
Alternative 4 44 33 55

What are the regret values for Alternative 3 as read from State 1 to State 3?
7, 32, 36
38. Nick has plans to open some pizza restaurants, but he is not sure how many to open. He has
prepared a payoff table to help analyze the situation.
States of Nature
Alternatives Good Market Fair Market Poor Market
Open 1 380,000 70,000 -400,000
Open 2 200,000 80,000 -200,000
Do nothing 0 0 0

As Nick does not know how his product will be received, he assumes that all three states of nature
are equally likely to occur. If he uses the equally likely criterion, what decision would he make?
Open 2
39. The following is a payoff table giving costs for various situations.
State 1 State 2 State 3
Alternative 1 45 37 83
Alternative 2 16 59 72
Alternative 3 23 65 91
Alternative 4 44 33 55

What decision would a pessimist make?

Alternative 4
40. Using the following table:
 Y X
5 7
7 6
3 2

What is the value of the correlation coefficient?

0.756
41. The value of b1 and R2 resulting from a particular regression analysis were –1.271 and
0.841 respectively. What was the correlation coefficient?
-0.917
42.
Daily Machine Breakdowns Probability Cumulative Probability
0 0.08 0.08
1 0.23 0.31
2 0.32 0.63
3 0.28 0.91
4 0.09 1.00

The table presents a summary of the Monte Carlo output from a simulation of 200 runs. What is the
probability but the number of breakdowns is at most 3?
0.91
43. The coefficient of determination resulting from a particular regression analysis was 0.91.
What was the correlation coefficient, assuming a negative linear relationship?
-0.954
44. Which of the following is not a part of every linear programming problem formulation?
A redundant constraint
45. Expected monetary value (EMV) is:
The average or expected monetary outcome of a decision if it can be repeated a
large number of times.
46. The following is a payoff table giving profits for various situations.
States of Nature
Alternatives A B C
Alternative 1 100 120 180
Alternative 2 200 100 50
Alternative 3 120 140 120
Do Nothing 0 0 0

The probabilities for states of nature A, B, and C are 0.3, 0.5, and 0.2, respectively. If a perfect
forecast of the future were available, what is the expected value with this perfect information?
166
47. A pawn shop in Arlington, Texas, ha a drive-through window to better serve customers.
The following tables provide information about the time between arrivals and the service
times required at the window on a particular busy day of the week. All times are in minutes,
Time Between Arrivals Probability Interval of Random Numbers
1 0.1 01-10
2 0.3 11-40
3 0.4 41-80
4 0.2 81-00

Service Time Probability Interval of Random Numbers

1 0.2 01-20
2 0.4 21-60
3 0.3 61-90
4 0.1 91-00

According to the table, the time between successive arrivals is 1, 2, 3 or 4 minutes. The store opens
at 8:00 am, and random numbers are used to generates arrivals and service times. The first random
number generated for arrivals is used to tell when the first customer arrives after opening. The first
3 random numbers to generate arrivals are 9, 89, and 26. What time does the third customer arrive?
8:07
48. Given this decision tree, what can be said about this decision?

There are two alternatives and three states of nature

49. The following is a payoff table giving costs for various situations.
State 1 State 2 State 3
Alternative 1 65 18 81
Alternative 2 42 22 26
Alternative 3 71 91 64
Alternative 4 20 77 33

What decision should be made based on the minimax regret criterion?

Alternative 2
 50. A pawn shop in Arlington, Texas, ha a drive-through window to better serve customers.
The following tables provide information about the time between arrivals and the service
times required at the window on a particular busy day of the week. All times are in minutes,
Time Between Arrivals Probability Interval of Random Numbers
1 0.1 01-10
2 0.3 11-40
3 0.4 41-80
4 0.2 81-00

Service Time Probability Interval of Random Numbers

1 0.2 01-20
2 0.4 21-60
3 0.3 61-90
4 0.1 91-00

According to the table, the time between successive arrivals is 1, 2, 3 or 4 minutes. The store opens
at 8:00 am, and random numbers are used to generates arrivals and service times. The first random
number to generate an arrival is 39, while the first service time is generated by the random number
94. What time would the first customer finish transacting business?
8:06
51. If the following data is used to estimate the regression Y= b0 + b1X, what is the value of
the coefficient of determination?
Y X
5 8
3 7
1 3
0.893
52. If the following data is used to estimate the regression Y= b0 + b1X, what is the value of
the correlation coefficient?
Y X
5 8
3 7
1 3
0.945
53. If the following data is used to estimate the regression Y= b0 + b1X, what is the value of
the b1 coefficient?
Y X
5 8
3 7
1 3
0.714
 54. If the following data is used to estimate the regression Y= b0 + b1X, what is the value of
the b0 coefficient?
Y X
5 8
3 7
1 3
-1.286
55. The following is a payoff table giving costs for various situations.
State of Nature
A B C
Alternative 1 34 78 60
Alternative 2 81 65 71
Alternative 3 55 41 40
Alternative 4 21 50 45

What decision should be made based on the minimax regret criterion?

Alternative 4
56. The following is a payoff table giving profits for various situations.
State 1 State 2 State 3
Probability 0.4 0.35 0.25
Alternative 1 45 37 83
Alternative 2 16 59 72
Alternative 3 23 65 91
Alternative 4 44 33 55

If a person were to use the expected monetary value criterion, what decision would be made?
Alternative 3
57. In order for a linear programming problem to have a unique solution, the solution must
exist
At the intersection of two or more constraints
58. Consider the following linear programming problem:
Maximize 12X + 10Y
Subject to: 4X + 3Y ≤ 480
2X + 3Y ≤ 360
The maximum possible value for the objective function is:
1520
59. The critical path of a network is the
Longest time path through the network
 60. The mathematical theory behind linear programming states that an optimal solution to any
problem will be at a(n) ____ of the feasible region.
A corner point or extreme point
61. Consider the following payoff table.
States of Nature
Alternatives A B
Alternative 1 100 150
Alternative 2 200 100
Probability 0.4 0.6

How much should be paid for a perfect forecast of the state of nature?
30
62. Which of the following is not a property of linear programs?
At least two separate feasible regions
63. Which of the following is true about the expected value of perfect information?
it is calculated as expected value with perfect information minus maximum EMV

MGMT 2012
 Quantitative Methods
Practice Questions

1) Which of the following is not considered a criteria for decision making under uncertainty?
A) optimistic
B) pessimistic
C) equally likely
D) random selection
E) minimax regret

2) A pessimistic decision making criterion is

A) maximax.
B) equally likely.
C) maximin.
D) decision making under certainty.
E) minimax regret.

3) Which of the following is true about the expected value of perfect information?
A) It is the amount you would pay for any sample study.
B) It is calculated as EMV minus EOL.
C) It is calculated as expected value with perfect information minus maximum EMV.
D) It is the amount charged for marketing research.
E) None of the above

4) The following is a payoff table giving profits for various situations.

What decision would an optimist make?

A) Alternative 1
B) Alternative 2
C) Alternative 3
D) Do Nothing
E) State of Nature A
5) The following is an opportunity loss table.

What decision should be made based on the minimax regret criterion?

A) Alternative 1
B) Alternative 2
C) Alternative 3
D) State of Nature A
E) Does not matter

6) The following is a payoff table.

What decision should be made based on the minimax regret criterion?

A) Alternative 1
B) Alternative 2
C) Alternative 3
D) State of Nature C
E) Does not matter

7) The following is a payoff table giving profits for various situations.

The probabilities for states of nature A, B, and C are 0.3, 0.5, and 0.2, respectively. If a perfect forecast
of the future were available, what is the expected value of perfect information (EVPI)?
A) 166
B) 0
C) 36
D) 40
E) None of the above
8) Nick has plans to open some pizza restaurants, but he is not sure how many to open. He has
prepared a payoff table to help analyze the situation.

Nick believes there is a 40 percent chance that the market will be good, a 30 percent chance that it will be
fair, and a 30 percent chance that it will be poor. A market research firm will analyze market conditions
and will provide a perfect forecast (they provide a money back guarantee). What is the most that should
be paid for this forecast?
A) $ 44,000
B) $ 53,000
C) $123,000
D) $176,000
E) $132,000
Questions 9 to 13 are based on the following table, which is used to estimate the regresion Y = b0 + b1X:

Y X
5 8
2 5
1 3

9) What is the value of the b1 coefficient?

A-1.6842
B) 0
C) 0.643
D) 0.816
E) None of the above

10) What is the value of the b0 coefficient?

A) -1.6842
B) 0
C) 0.643
D) 0.816
E) None of the above

11) What is the value of the coefficient of

determination? A) 0.699
B) 0.973
C) 1
D) 0.572
E) None of the above
12) What us the value of the correlation
coefficient? A) 0.756
B) 1
C) 0.986
D) 0.836
E) None of the above

13) If computing a causal linear regression model of Y = a + bX and the resultant r2 is very near zero,
then one would be able to conclude that
A) Y = a + bX is a good forecasting method.
B) Y = a + bX is not a good forecasting method.
C) a multiple linear regression model is a good forecasting method for the data.
D) a multiple linear regression model is not a good forecasting method for the data.
E) None of the above

14) Which of the following statements is true about r2?

A) It is also called the coefficient of correlation.
B) It is also called the coefficient of determination.
C) It represents the percent of variation in X that is explained by Y.
D) It represents the percent of variation in the error that is explained by Y.
E) None of the above

15) Consider the following linear programming problem:

The feasible corner points are (48,84), (0,120), (0,0), (90,0). What is the maximum possible value for the
objective function?
A) 1032
B) 1200
C) 360
D) 1600
E) None of the above

16) Consider the following linear programming problem:

Which of the following points (X,Y) is not a feasible corner point i.e. violates the constraints?
A) (0,60)
B) (105,0)
C) (120,0)
D) (100,10)
E) None of the above

17) Consider the following linear programming problem:

What is the optimum solution to this problem (X,Y)?

A) (0,0)
B) (50,0)
C) (0,100)
D) (400,0)
E) None of the above

18) Two models of a product – Regular (X) and Deluxe (Y) – are produced by a company. A linear
programming model is used to determine the production schedule. The formulation is as
follows:

The optimal solution is X = 100, Y = 0.

How many units of the regular model would be produced based on this solution?
A) 0
B) 100
C) 50
D) 120
E) None of the above

19) The mathematical theory behind linear programming states that an optimal solution to any
problem will lie at a(n) of the feasible region.
A) interior point or center
B) maximum point or minimum point
C) corner point or extreme point
D) interior point or extreme point
E) None of the above
20) Consider the following linear programming problem:

Maximize 5X + 6Y
Subject to: 4X + 2Y ≤
420 1X + 2Y
≤ 120
all variables ≥ 0

Which of the following points (X,Y) is in the feasible

region? A) (30,60)
B) (105,5)
C) (0,210)
D) (100,10)

21) A new young mother has opened a cloth diaper service. She is interested in simulating the number
of diapers required for a one-year-old. She hopes to use this data to show the cost effectiveness of
cloth diapers. The table below shows the number of diapers demanded daily and the probabilities
associated with each level of demand.

Interval of
Daily Demand Probability Random Numbers
5 0.30 01-30
6 0.50 31-80
7 0.05 81-85
8 0.15 86-00

According to the table, if the random number 40 were generated for a particular day, what would the
simulated demand be for that day?
A) 5
B) 6
C) 7
D) 20

22) According to table in the previous question, if the random number 96 were generated for a
particular day, what would the simulated demand be for that day?
A) 5
B) 6
C) 7
D) 8
23) A pharmacy is considering hiring another pharmacist to better serve customers. To help analyze this
situation, records are kept to determine how many customers will arrive in any 10-minute interval.
Based on 100 ten-minute intervals, the following probability distribution has been developed and
random numbers assigned to each event.

Interval of
Number of Arrivals Probability Random Numbers
6 0.2 01-20
7 0.3 21-50
8 0.3 51-80
9 0.1 81-90
10 0.1 91-00

According to the table, the number of arrivals in any 10-minute period is between 6 and 10, inclusive.
Suppose the next three random numbers were 18, 89, and 67, and these were used to simulate arrivals in
the next three 10-minute intervals. How many customers would have arrived during this 30-minute time
period?
A) 22
B) 23
C) 24
D) 25

Questions 24 and 25 are based on the following table:

Variable Value Probability Cumulative Probability

0 0.08 0.08
1 0.23 0.31
2 0.32 0.63
3 0.28 0.91
4 0.09 1.00

Number of Runs 200

Average Value 2.10

24) According to Table 13-5, which presents a summary of the Monte Carlo output from a simulation of
200 runs, there are 5 possible values for the variable of concern. If this variable represents the number
of machine breakdowns during a day, what is the probability that the number of breakdowns is 2 or
fewer? A) 0.23
B) 0.31
C) 0.32
D) 0.63
25) According to Table 13-5, which presents a summary of the Monte Carlo output from a simulation of
200 runs, there are 5 possible values for the variable of concern. If random numbers between 01 and 100
are used to generate values, then a random draw of 72 would produce a variable value of
A) 0.
B) 1.
C) 2.
D) 3.
1. The following is a payoff table giving costs for various situations.

State 1 State 2 State 3

Alternative 1 45 37 83
Alternative 2 16 59 72
Alternative 3 23 65 91
Alternative 4 44 33 55

What decision would a pessimist make?

A) Alternative 1
B) Alternative 2
C) Alternative 3
D) Alternative 4

2. The following is a payoff table giving costs for various situations.

State 1 State 2 State 3

Alternative 1 45 37 83
Alternative 2 16 59 72
Alternative 3 23 65 91
Alternative 4 44 33 55

What decision should be made based on the Laplace criterion?

A) Alternative 1
B) Alternative 2
C) Alternative 3
D) Alternative 4

3. The following is a payoff table giving profits for various situations.

State 1 State 2 State 3

Probability 0.4 0.35 0.25
Alternative 1 45 37 83
Alternative 2 16 59 72
Alternative 3 23 65 91
Alternative 4 44 33 55

If a person selected Alternative 1, what would the expected profit be?

A) 51.7
B) 54.7
C) 55.0
D) 57.3
 4. In decision making under , there are several possible outcomes for each
alternative, and the decision maker knows the probability of occurrence of each
outcome.
A) risk
B) utility
C) certainty
D) probability

Questions 5 and 6 are based on the following diagram:

5. Given this decision tree, alternatives emanate from

A) the node labeled 1.
B) the node labeled 2.
C) the node labeled 3.
D) the node labeled 4.

6. Given this decision tree, node 2 represents

A) an alternative.
B) a state of nature.
C) the optimal solution.
D) a non-optimal solution.

7. Which of the following equalities is correct?

A) SST = SSR + SSE
B) SSR = SST + SSE
C) SSE = SSR + SST
D) SST = SSC + SSR

8. The correlation coefficient resulting from a particular regression analysis was 0.25.
What was the coefficient of determination?
A) 0.5
B) -0.5
C) 0.0625
D) There is insufficient information to answer the question.
Questions 9 to 13 are based on the following data which is used to estimate the regression
Y = b0 + b1 X

Y X
8 2
5 4
3 6

9. What is the estimate of b1 in the

regression? A) -1.25
B) 3.11
C) -5.76
D) -3.11

10. What is the estimate of b0 in the

regression? A) 8.21
B) 10.33
C) 1.25
D) 9.98

11. What is the value of the coefficient of

determination? A) 0.681
B) 0.987
C) 1
D) 0.225

12. What is the value of the correlation

coefficient? A) 0.825
B) 0.993
C) 1
D) 0.474
13. What is the value of the variance of the
regression? A) 0.154
B) 0.334
 C) 0.674
D) 0.167

14. Consider the following linear programming problem:

Maximize 12X + 10Y
Subject to: 4X + 3Y ≤ 480
2X + 3Y ≤ 360
all variables ≥ 0

Which of the following points (X, Y) is feasible? A)

(10,120)
B) (120,10)
C) (30,100)
D) (60,90)

15. Consider the following constraints from a linear programming

problem: 2X + Y ≤ 200
X + 2Y ≤ 200
X, Y ≥ 0

If these are the only constraints, which of the following points (X,Y) cannot be the optimal solution?
A) (0, 0)
B) (0, 200)
C) (0,100)
D) (100, 0)

16. The critical path of a network is the:

A) shortest time path through the network.
B) path with the fewest activities.
C) path with the most activities.
D) longest time path through the network.

17. Given the following small project, the critical path is days.

Immediate Time
Activity Predecessor (days)
A - 10
B - 4
C A, B 6

A) 10
B) 14
C) 16
D) 20
Questions 18 to 20 refer to the following table of activities. All times are in weeks.

Immediate
Activity Predecessor Time
A - 4
B - 3
C A 2
D B 7
E C, D 6

18. Using the data in the table, what is the minimum possible time required for
completing the project?
A) 8
B) 25
C) 16
D) 10

19. What is the latest possible time that C may be started without delaying completion of
the project?
A) 0
B) 4
C) 8
D) 10

20. What is the critical path of the project?

A) A – C – D – E
B) A – A – E
C) B – C – D – E
D) B – D – E
Questions 21 to 23 are based on the following table, which represents the probability distribution for machine
breakdowns in a day of operation.

Number of Interval of
breakdowns Probability Random Numbers
0 0.20 1-20
1 0.30 21-50
2 0.35 51-85
3 0.15 86-00

21. According to the table, what is the cumulative probability of 2

breakdowns? A) 0.35
B) 0.50
C) 0.85
D) 0.15
 22. According to the table, what is the probability of at least one breakdown? A) 0.2
B) 0.3
C) 0.5
D) 0.8

23. According to the table, if a random number of 00 is drawn, what would the simulated number
of breakdowns be?
A) 0
B) 1
C) 2
D) 3

24. According to the table, if a random number of 57 is drawn, what would the simulated number
of breakdowns be?
A) 0
B) 1
C) 2
D) 3

25. In assigning random numbers in a Monte Carlo simulation

A) it is important to develop a cumulative probability distribution.
B) it is important to use a normal distribution for all variables simulated.
C) it is not important to assign probabilities to an exact range of random number intervals.
D) it is important to use prime numbers to seed the distribution.
 Question 1
Correct

Using the following table:

Y X
5 7
7 6
3 2

What is the estimate of b0 in the regression Y = b0 + b1 X ?

a. 1.381
b. 3.410
c. 2.413 
d. 5.117

The correct answer is: 2.413

 Question 2
Correct

Mark 1.00 out of 1.00

A pharmacy is considering hiring another pharmacist to better serve customers. To help analyze this situation,
records are kept to determine how many customers will arrive in any 10-minute interval. Based on 100 ten-minute
intervals, the following probability distribution has been developed and random numbers assigned to each event.

Interval of
Number of Probabilit Random
Arrivals y Numbers
6 0.2 01-20
7 0.3 21-50
8 0.3 51-80
9 0.1 81-90
10 0.1 91-00

According to the table, the number of arrivals in any 10-minute period is between 6 and 10 inclusive. Suppose the
next 3 random numbers were 02, 81, and 18. These numbers are used to simulate arrivals into the pharmacy. What
would the average number of arrivals per 10- minute period be based on this set of occurrences?

a. 6
b. 7 
c. 9
d. 8

The correct answer is: 7

 Question 2
Correct

Mark 1.00 out of 1.00

Question 3
Correct

Mark 1.00 out of 1.00

Consider the following linear programming problem:

Maximize 4X + 10Y Subject to: 3X + 4Y ≤ 480
4X + 2Y ≤ 360
The feasible corner points are (48,84), (0,120), (0,0), (90,0). What is the maximum possible value for the objective
function?

a. 360
b. 1200 
c. 1032
d. 1600

The correct answer is: 1200

The mean square error (MSE) is

a. the SSE divided by the degrees of freedom (n-k-1). 

b. denoted by s.
c. the SSE divided by the number of observations.
d. denoted by k.

The correct answer is: the SSE divided by the degrees of freedom (n-k-1).

Question 5
Correct

Mark 1.00 out of 1.00

The value of b1 and R2 resulting from a particular regression analysis were –1.271 and 0.841 respectively. What
was the correlation coefficient?

a. There is insufficient information to answer the question.

b. -0.917 
c. 0.917
d. 0.0625

The correct answer is: -0.917

 Question 6
Correct

Mark 1.00 out of 1.00

A pessimistic decision-making criterion is

a. maximax.
b. maximin. 
c. equally likely.
d. decision making under certainty.

The correct answer is: maximin.

Consider the following linear programming problem: Maximize 12X + 10Y
Subject to: 4X + 3Y ≤ 480
2X + 3Y ≤ 360
all variables ≥ 0
Which of the following points (X,Y) is feasible?

a. (120,10)
b. (30,100) 
c. (60,90)
d. (10,120)

The correct answer is: (30,100)

Question 8
Correct

Mark 1.00 out of 1.00

Consider the following linear programming problem: Maximize:

5X + 6Y
Subject to:
4X + 2Y ≤ 420
1X + 2Y ≤ 120
all variable ≥ 0
Which of the following points (X,Y) is not a feasible corner point?

a. (100,10)
b. (105,0)
c. (120,0) 
d. (0,60)

The correct answer is: (120,0)

The correlation coefficient resulting from a particular regression analysis was -0.71. What was the coefficient of
determination?

a. 0.504 
b. -0.371
c. There is insufficient information to answer the question.
d. 0.371

The correct answer is: 0.504

Question 10
Correct

Mark 1.00 out of 1.00

Using the following table:

Y X
5 7
7 6
3 2

What is the value of the correlation coefficient?

a. 0.971
b. 0.948
c. 0.592
d. 0.756 
The correct answer is: 0.756
The following is a payoff table giving costs for various situations.

State 1 State State

2 3
Alternative 145 37 83
Alternative 216 59 72
Alternative 323 65 91
Alternative 444 33 55

What decision should be made based on the Laplace criterion?

a. Alternative 4 
b. Alternative 3
c. Alternative 1
d. Alternative 2

The correct answer is: Alternative 4

Question 12
Correct

Mark 1.00 out of 1.00

The coefficient of determination resulting from a particular regression analysis was 0.91. What was the correlation
coefficient, assuming a negative linear relationship?

a. There is insufficient information to answer the question.

b. -0.954 
c. 0.170
d. 0.954

The correct answer is: -0.954

Consider the following linear programming problem: Maximize 5X + 6Y
Subject to: 4X + 2Y ≤ 420
1X + 2Y ≤ 120
Which of the following points (X,Y) is not a feasible corner point?

a. (0,60)
b. (100,10)
c. (105,0)
d. (120,0) 

The correct answer is: (120,0)

Question 14
Correct

Mark 1.00 out of 1.00

Using the following table:

Y X
5 7
7 6
3 2

What is the value of the coefficient of determination for the regression Y = b0 + b1 X?

a. 0.571 
b. 0.350
c. 0.899
d. 0.942

The correct answer is: 0.571

The following is a payoff table giving costs for various situations.

State 1 State State

2 3
Alternative 145 37 83
Alternative 216 59 72
Alternative 323 65 91
Alternative 444 33 55

What decision would a pessimist make?

a. Alternative 1
b. Alternative 2
c. Alternative 4 
d. Alternative 3

The correct answer is: Alternative 4

Question 16
Correct

Mark 1.00 out of 1.00

A new young mother has opened a cloth diaper service. She is interested in simulating the number of diapers
required for a one-year-old. She hopes to use this data to show the cost effectiveness of cloth diapers. The table
below shows the number of diapers demanded daily and the probabilities associated with each level of demand.
Interval of

Daily DemandProbability Random

 Numbers
5 0.30 01-30
6 0.50 31-80
7 0.05 81-85
8 0.15 86-00

According to the table, what is the cumulative probability that demand is less than or equal to 7?

a. 0.15
b. 0.80
c. 0.85 
d. 0.95

The correct answer is: 0.85

The following is a payoff table giving costs for various situations.
State of Nature
A B C
Alternative 134 78 60
Alternative 281 65 71
Alternative 355 41 40
Alternative 421 50 45

What decision should be made based on the minimax regret criterion?

a. Alternative 4 

b. Alternative 2

c. Alternative 3

d. Alternative 1

The correct answer is:

Alternative 4

Question 18
Correct

Mark 1.00 out of 1.00

The mathematical theory behind linear programming states that an optimal solution to any problem will lie at a(n)
of the feasible region.
 a. interior point or extreme point
b. interior point or center
c. maximum point or minimum point
d. corner point or extreme point 

The correct answer is: corner point or extreme point

Which of the following is not considered a criterion for decision making under uncertainty?

a. equally likely
b. random selection 
c. pessimistic
d. optimistic

The correct answer is: random selection

Question 20
Correct

Mark 1.00 out of 1.00

The following is a payoff table giving costs for various situations.

State 1 State State

2 3
Alternative 165 18 81
Alternative 242 22 26
Alternative 371 91 64
Alternative 420 77 33

What decision should be made based on the minimax regret criterion?

a. Alternative 2 
 b. Alternative 1

c. Alternative 4

d. Alternative 3

The correct answer is: Alternative 2

Which of the following equalities is correct?

a. SSR = SST + SSE

b. SST = SSC + SSR
c. SSE = SSR + SST
d. SST = SSR + SSE 

The correct answer is: SST = SSR + SSE

Question 22
Correct

Mark 1.00 out of 1.00

Consider the following linear programming problem: Maximize: 14X + 10Y

Subject to:
4X + 6Y ≤ 460
10X + 5Y ≤ 500
all variable ≥ 0
The maximum possible value for the objective function is:

a. 665
b. 1520.
c. 1200
d. 895 
The correct answer is: 895
If computing a causal linear regression model of Y = a + bX and the resultant R2 is very near zero, then one would
be able to conclude that:

a. Y = a + bX is a good forecasting method.

b. Y = a + bX is not a good forecasting method. 
c. a multiple linear regression model is not a good forecasting method for the data.
d. a multiple linear regression model is a good forecasting method for the data.

The correct answer is: Y = a + bX is not a good forecasting method.

Question 24
Correct

Mark 1.00 out of 1.00

Which of the following is true about the expected value of perfect information?

a. It is calculated as EMV minus EOL.

b. It is calculated as expected value with perfect information minus maximum EMV. 
c. It is the amount charged for marketing research.
d. It is the amount you would pay for any sample study.

The correct answer is: It is calculated as expected value with perfect information minus maximum EMV.
 Daily Cumulativ
Machine e
Probability
Breakdowns Probabilit
y
0 0.08 0.08
1 0.23 0.31
2 0.32 0.63
3 0.28 0.91
4 0.09 1.00

The table presents a summary of the Monte Carlo output from a simulation of 200 runs. What is the probability
that the number of breakdowns is at most 3?

a. 0.37

b. 0.63

c. 1.00

d. 0.91 

The correct answer is: 0.91

Using the following table:

Y X
5 7
7 6
3 2

What is the estimate of b1 in the regression Y = b0 + b1 X ?

a. 0.746
b. 0.733
c. 0.689
d. 0.571 

The correct answer is: 0.571

Question 27
Correct

Mark 1.00 out of 1.00

The table below represents the probability distribution for machine breakdowns in a day of operation.

Number of Interval of
breakdowns
Probability Random
Numbers
0 0.35 1-35
1 0.20 36-55
 2 0.25 56-80
3 0.20 81-00

What is the cumulative probability of 1 breakdown?

a. 0.55 

b. 0.20

c. 0.35

d. 0.80

The correct answer is: 0.55

Which of these statements is best?

a. One purpose of regression is to understand the relationship between variables. 

b. One purpose of regression is to predict the value of one variable based on the standard deviation of
that variable.
c. The variable to be predicted is the independent variable.
d. In regression, an independent variable is sometimes called a response variable.

The correct answer is: One purpose of regression is to understand the relationship between variables.

Question 29
Correct

Mark 1.00 out of 1.00

In order for a linear programming problem to have a unique solution, the solution must exist

a. at the intersection of a non-negativity constraint and a resource constraint.

b. at the intersection of the non-negativity constraints.
c. at the intersection of two or more constraints. 
d. at the intersection of the objective function and a constraint.

The correct answer is: at the intersection of two or more constraints.

The following is a payoff table giving costs for various situations.

State 1 State State

2 3
Alternative 145 37 83
Alternative 216 59 72
Alternative 323 65 91
Alternative 444 33 55

What decision should be made based on the minimax regret criterion?

a. Alternative 4
b. Alternative 3
c. Alternative 1
d. Alternative 2 

The correct answer is: Alternative 2