Mid Term 1: Deterministic Techniques Assume No Uncertainty

Mid Term 1.deterministic Techniques Assume That No Uncertainty Exists I

Deterministic techniques assume that no uncertainty exists in model parameters. Answer True False

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. Answer True False

A continuous random variable may assume only integer values within a given interval. Answer True False

A decision tree is a diagram consisting of circles decision nodes, square probability nodes, and branches. Answer True False

Excel can only be used to simulate systems that can be represented by continuous random variables. Answer True False

Starting conditions have no impact on the validity of a simulation model. Answer True False

Data cannot exhibit both trend and cyclical patterns. Answer True False

Qualitative methods are the least common type of forecasting method for the long-term strategic planning process. Answer True False

Assume that it takes a college student an average of 5 minutes to find a parking spot in the main parking lot. Assume also that this time is normally distributed with a standard deviation of 2 minutes. What time is exceeded by approximately 75% of the college students when trying to find a parking spot in the main parking lot? Answer 3.7 minutes 5.8 minutes 6.4 minutes 9.2 minutes

__________ is a measure of dispersion of random variable values about the expected value. Answer Standard deviation Range The z-score (the standard score) All of the above

The __________ is the expected value of the regret for each decision. Answer expected value expected opportunity loss expected value of perfect information none of the above

Developing the cumulative probability distribution helps to determine Answer the coefficient of variation data sets random number ranges all of the above

Two hundred simulation runs were completed using the probability of a machine breakdown from the table below. The average number of breakdowns from the simulation trials was 1.93 with a standard deviation of 0.20. No. of breakdowns per week Probability Cumulative probability 0 .10 . .25 . .36 . .22 . ..00 What is the probability of 2 or fewer breakdowns? Answer .10 .25 .35 .71

Random numbers generated by a __________ process instead of a __________ process are pseudorandom numbers. Answer physical / physical physical / mathematical mathematical / physical mathematical / mathematical

Consider the following frequency of demand: If the simulation begins with 0.8102, the simulated value for demand would be Answer

__________ is a category of statistical techniques that uses historical data to predict future behavior. Answer Qualitative methods Regression Time series Quantitative methods

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. Answer ..2

Which of the following possible values of alpha would cause exponential smoothing to respond the most slowly to sudden changes in forecast errors? Answer .01 .10 .50 .90

__________ is the difference between the forecast and actual demand. Answer Forecast mistake Forecast error MAD Forecast accuracy

In exponential smoothing, the closer alpha is to __________, the greater the reaction to the most recent demand. Answer - or 1

Consider the following demand and forecast. Period Demand Forecast If MAD = 2, what is the forecast for period 4? Answer none of the above

__________ is absolute error as a percentage of demand. Answer Cumulative error MAD MAPD Average error

Coefficient of determination is the percentage of the variation in the __________ variable that results from the __________ variable. Answer dependent, dependent independent, dependent dependent, independent independent, independent

Consider the following graph of sales. Which of the following characteristics is exhibited by the data? Answer Trend only Trend plus seasonal Seasonal only None of the above

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. Answer

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. Answer

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 ________. Answer 5 points

A fair die is rolled 8 times. What is the probability that an even number (2,4, 6) will occur between 2 and 4 times? Round your answer to four places after the decimal. Answer

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). If he uses the maximin criterion, how many new workers will he hire? Answer

An investor is considering 4 different opportunities, A, B, C, or D. The payoff for each opportunity will depend on the economic conditions, represented in the payoff table below. Economic Condition Poor Average Good Excellent Investment (S1) (S2) (S3) (S4) A B C - D If the probabilities of each economic condition are 0.5, 0.1, 0.35, and 0.05 respectively, what is the highest expected payoff? Answer

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. Demand Random Number Ranges Answer

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. Answer

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. Answer

The following data summarizes the historical demand for a product. Month Actual Demand March 20 April 25 May 40 June 35 July 30 August 45 Use exponential smoothing with α = .2 and the smoothed forecast for July is 32. Determine the smoothed forecast for August. Answer

Calculate the correlation coefficient . Use four significant digits after the decimal. Answer

The following sales data are available for . 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. Answer

Daily highs in Sacramento for the past week (from least to most recent) were: 95, 102, 101, 96, 95, 90 and 92. Develop a forecast for today using a 2 day moving average. Answer

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 4. Use two places after the decimal. Answer

Daily highs in Sacramento for the past week (from least to most recent) were: 95, 102, 101, 96, 95, 90 and 92. Develop a forecast for today using a weighted moving average, with weights of .6, .3 and .1, where the highest weights are applied to the most recent data. Answer

The following sales data are available for : Year Sales Forecast Calculate the absolute value of the average error. Use three significant digits after the decimal. Answer

Paper For Above instruction

The provided set of questions covers a broad spectrum of concepts related to deterministic techniques, probability, statistics, and forecasting methods. The initial questions focus on understanding the assumptions behind deterministic models, such as the absence of uncertainty, and explore basic probability concepts, including binomial probabilities and distributions. These foundational questions are crucial for grasping how models operate under certainty and how randomness influences decision-making.

Subsequently, the questions delve into statistical measures like standard deviation, mean, and measures of dispersion, highlighting their importance in analyzing data variability and assessing risk. For example, questions about the probability of exceeding certain times or demands, and the use of normal distribution properties, emphasize the application of statistical distributions in real-world scenarios such as parking times or lifespans.

Forecasting methods take a significant portion of the questions, especially exponential smoothing, moving averages, regression analysis, and their respective parameters. The focus here is on understanding how these techniques respond to recent data, manage trends, and interpret accuracy metrics like MAD and MAPD. For instance, the questions about choosing alpha values in exponential smoothing underscore the trade-off between responsiveness and stability in forecasts.

The questions concerning decision analysis, such as decision trees and expected value calculations, are vital for understanding structured decision-making under uncertainty. They demonstrate how probabilistic outcomes influence strategic choices in various scenarios, including investment and operational decisions.

Further, the inclusion of questions on the effects of externalities, industry concentration, and globalization highlights the broader economic and strategic framework of the soft drink industry. This encompasses vertical integration, competitive strategies, government policies like taxation, and environmental impacts, providing insight into how firms operate within complex regulatory and economic environments.

In sum, these questions collectively reinforce core principles of operations research, statistics, and strategic management. They emphasize the importance of understanding model assumptions, interpreting data accurately, choosing appropriate forecasting techniques, and considering external factors influencing industry performance. Mastery of these concepts is critical for making informed, data-driven decisions in business and economics.

References

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• Colander, D. C. (2013). Microeconomics (9th ed.). McGraw-Hill.
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