BUSI508 Final Exam

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Question 1 (1 point)

In regression terms what does “best fit” mean?
Question 1 options:
a) The estimated parameters, b0 and b1, are minimized.
b) The estimated parameters, b0 and b1, are linear.
c) The error terms are as small as possible.
d) The largest error term is as small as possible.

Why do we create a scatter plot of the data in regression analysis?
Question 2 options:
a) To compute the error terms.
b) Because Excel calculates the function from the scatter plot.
c) To visually check for a relationship between X and Y.
d) To estimate predicted values.

Based on the following regression output, what proportion of the total variation in Y is explained by X?
Regression Statistics
Multiple R 0.917214
R Square 0.841282
Adjusted R Square 0.821442
Standard Error 9.385572
Observations 10

ANOVA
df SS MS F Significance F
Regression 1 3735.3060 3735.30600 42.40379 0.000186
Residual 8 704.7117 88.08896
Total 9 4440.0170

Coefficients Standard Error t Stat P-value Lower 95%
Intercept 31.623780 10.442970 3.028236 0.016353 7.542233
X Variable 1 1.131661 0.173786 6.511819 0.000186 0.730910
Question 3 options:
a) 0.917214
b) 0.841282
c) 0.821442
d) 9.385572

The regression function indicates the
Question 4 options:
a) average value the dependent variable assumes for a given value of the independent variable.
b) actual value the independent variable assumes for a given value of the dependent variable
c) average value the dependent variable assumes for a given value of the dependent variable
d) actual value the dependent variable assumes for a given value of the independent variable

The reason an analyst creates a regression model is
Question 5 options:
a) to determine the errors in the data collected.
b) to predict a dependent variable value given specific independent variable values.
c) to predict an independent variable value given specific dependent variable values.
d) to verify the errors are normally distributed.

Based on the following regression output, what is the equation of the regression line?
Regression Statistics
Multiple R 0.917214
R Square 0.841282
Adjusted R Square 0.821442
Standard Error 9.385572
Observations 10

ANOVA
df SS MS F Significance F
Regression 1 3735.3060 3735.30600 42.40379 0.000186
Residual 8 704.7117 88.08896
Total 9 4440.0170

Coefficients Standard Error t Stat P-value Lower 95%
Intercept 31.623780 10.442970 3.028236 0.016353 7.542233
X Variable 1 1.131661 0.173786 6.511819 0.000186 0.730910
Question 6 options:
a)
b)
c)
d)

R2 is also referred to as
Question 7 options:
a) coefficient of determination.
b) correlation coefficient.

c) total sum of squares.
d) regression sum of squares.

Estimation errors are often referred to as
Question 8 options:
a) mistakes.
b) constant errors.
c) residuals.
d) squared errors.

Regression analysis is a modeling technique
Question 9 options:
a) that assumes all data is normally distributed.
b) for analyzing the relationship between dependent and independent variables.
c) for examining linear trend data only.
d) for capturing uncertainty in predicted values of Y.

What is the correct range for R2 values?
Question 10 options:
a) (−1 ≤ R2 ≤ 0)
b) (−1 ≤ R2 ≤ 1)
c) (0 ≤ R2 ≤ 1)
d) (0 ≤ R2 ≤ .5)

Residuals are assumed to be
a) dependent, uniformly distributed random variables.
b) independent, uniformly distributed random variables.
c) dependent, normally distributed random variables.
d) independent, normally distributed random variables.

What goodness-of-fit measure is commonly used to evaluate a multiple regression function?
a) R2
b) adjusted R2
c) partial R2
d) total R2

Exhibit 9.2
The following questions are based on the problem description and spreadsheet below.
A paint manufacturer is interested in knowing how much pressure (in pounds per square inch,
PSI) builds up inside aerosol cans at various temperatures (degrees Fahrenheit). It has developed
the following Excel spreadsheet of the results.
A B C D E F G
1 Regression Statistics
2 Multiple R 0.9999
3 R Square 0.9998
4 Adjusted R Square 0.9997
5 Standard Error 0.2853
6 Observations 10
7
8 ANOVA
9 df SS MS F Significance F
10 Regression 1 2843.4178 2843.4100 34930.220 0.0000

11 Residual 8 0.6512 0.0814
12 Total 9 2844.0690
13
Standard Lower Upper
14 Coefficients Error t Stat P-value 95% 95%
15 Intercept 38.1923 0.8131 46.9741 0.0000 36.3174 40.0672
16 X Variable 1 1.2447 0.0067 186.8963 0.0000 1.2293 1.2600

Refer to Exhibit 9.2. Predict the mean pressure for a temperature of 120 degrees.

Exhibit 9.2
A B C D E F G
2 Multiple R 0.9999
3 R Square 0.9998
6 Observations 10
7
8 ANOVA
10 Regression 1 2843.4178 2843.4100 34930.220 0.0000
11 Residual 8 0.6512 0.0814
12 Total 9 2844.0690
13
15 Intercept 38.1923 0.8131 46.9741 0.0000 36.3174 40.0672
16 X Variable 1 1.2447 0.0067 186.8963 0.0000 1.2293 1.2600

Refer to Exhibit 9.2. Test the significance of the model and explain which values you used to reach your
conclusions.

Exhibit 9.2
A B C D E F G
2 Multiple R 0.9999
3 R Square 0.9998
6 Observations 10
7
8 ANOVA
10 Regression 1 2843.4178 2843.4100 34930.220 0.0000
11 Residual 8 0.6512 0.0814
12 Total 9 2844.0690
13
15 Intercept 38.1923 0.8131 46.9741 0.0000 36.3174 40.0672
16 X Variable 1 1.2447 0.0067 186.8963 0.0000 1.2293 1.2600

Refer to Exhibit 9.2. Interpret the meaning of the “Lower 95%” and “Upper 95%” terms in cells F16:G16
of the spreadsheet.

Exhibit 9.2
A B C D E F G
2 Multiple R 0.9999
3 R Square 0.9998
6 Observations 10
7
8 ANOVA
10 Regression 1 2843.4178 2843.4100 34930.220 0.0000
11 Residual 8 0.6512 0.0814
12 Total 9 2844.0690
13
15 Intercept 38.1923 0.8131 46.9741 0.0000 36.3174 40.0672
16 X Variable 1 1.2447 0.0067 186.8963 0.0000 1.2293 1.2600

Refer to Exhibit 9.2. Interpret the meaning of R Square in cell B3 of the spreadsheet.

Why would a manager be interested in analyzing risk?
a) To determine a most likely outcome.
b) To determine a range of outcomes.
c) To determine a distribution of outcomes.
d) To determine a confidence interval on most likely outcomes.

If chance or uncertainty is present in a system then there is an element of ____ in the decision-making
problem.
a) danger
b) security
c) risk
d) difficulty

Simulation is used to
a) find possible worst case values for the dependent variable(s).
b) find worst case and best case values for the dependent variable(s).
c) find distribution information for the dependent variable(s).
d) find median values for the dependent variable(s).

A store is considering adding a second clerk. The customer arrival rate at this new server will be
a) twice the old rate.
b) half the old rate.
c) the same as the old rate.
d) unpredictable.

One reason to use queuing models in business is
a) to trade-off the cost of providing service and the cost of customer dissatisfaction
b) to maximize the number of service providers
c) to minimize the cost of providing service
d) all of the above

Which of the following best describes queuing theory?
a) The study of arrival rates.
b) The study of service times.
c) The study of waiting lines.
d) The evaluation of service time costs.

An arrival process is memoryless if
a) the time until the next arrival depends on the time elapsed since the last arrival.
b) the time until the next arrival is based on the time elapsed since the last arrival.
c) the time until the next arrival does not depend on the time elapsed since the last arrival.
d) the time until the next arrival is based on the arrival rate.

The memoryless property is also referred to as the ____ property.
a) Markov
b) Erlang
c) Poisson
d) Normal

Which of the following is a reason to employ queuing theory?
a) To reduce customer wait time in line.
b) To reduce service times.
c) To generate more arrivals to the system.
d) To reduce worker idle time in line.

If a company adds an additional identical server to its M/M/1 system, making an M/M/2 system, what
happens to a customer's average service time?
a) increases
b) decreases
c) it is unchanged
d) depends on the arrival rate

The number of arrivals to a store follows a Poisson distribution with mean λ = 10/hour. What is the
mean inter-arrival time?
a) 6 seconds
b) 6 minutes
c) 10 minutes
d) 10 hours

If the number of arrivals in a time period follow a Poisson distribution with mean λ then the inter-arrival
times follow a(n) ____ distribution with mean ____.
a) normal; μ
b) constant; λ
c) exponential; λ
d) exponential; 1/λ

What is the service policy in the queuing systems presented in this chapter that is considered “fair” by
the customers?
a) FIFO
b) LIFO
c) FILO
d) Priority

The M in M/G/1 stands for
a) Markovian inter-arrival times.
b) Mendelian inter-arrival times.
c) Mean inter-arrival times.
d) Mathematical inter-arrival times.

Which type of queuing system are you likely to encounter at an ATM?
a) Single waiting line, single service station.
b) Multiple waiting lines, single service station.
c) Single waiting line, multiple service stations.
d) Multiple waiting lines, multiple service stations.

Exhibit 13.1
The following questions are based on the output below.
A store currently operates its service system with 1 operator. Arrivals follow a Poisson
distribution and service times are exponentially distributed. The following spreadsheet has been
developed for the system.
M/M/s queuing computations

Arrival rate 6
Service rate 8
Number of servers 1 (max of 40)

Utilization 75.00%
P(0), probability that the system is empty 0.2500
Lq, expected queue length 2.2500
L, expected number in system 3.0000

Wq, expected time in queue 0.3750
W, expected total time in system 0.5000
Probability that a customer waits 0.7500

Refer to Exhibit 13.1. What is the probability that a customer must wait in queue before being served?
a) 0.00
b) 0.25
c) 0.75
d) 1.00

Exhibit 13.1

Arrival rate 6
Service rate 8

Utilization 75.00%

Refer to Exhibit 13.1. What is average amount of time spent waiting in line?
a) 0.375
b) 0.50
c) 2.25
d) 3.00

Exhibit 13.1

Arrival rate 6
Service rate 8

Utilization 75.00%

Refer to Exhibit 13.1. What is the probability that a customer can go directly into service without waiting
in line?
a) 0.00
b) 0.25
c) 0.75
d) 1.00

Exhibit 13.1

Arrival rate 6
Service rate 8

Utilization 75.00%

Refer to Exhibit 13.1. How many customers will be in the store on average at any one time?
a) 0.375
b) 0.50
c) 2.25
d) 3.00

A grocery clerk can serve 20 customers per hour on average and the service time follows an exponential
distribution. What is the expected service time per customer?

distribution. What is the probability that a customer's service time is less than 2 minutes?

distribution. What is the probability that a customer's service time is more than 4 minutes?

If we are employing Activity-On-Arc (AOA) network design, the arcs in the network diagram represent
a) significance relationships.
b) precedence relationships.
c) tasks to complete.
d) task times.

Which activities are critical in the following diagram?
a) A, C, D, F
b) B, D, E
c) A, C, D, E
d) A, B, D, E, F

The purpose of the forward pass in the Critical Path Method (CPM) technique is to
a) review each of the precedence relationships in the activity network.
b) calculate the slack time within each node on the activity network.
c) determine the earliest time each activity can start and finish.
d) determine the latest time each activity can start and finish.

What is the formula for the earliest finish time for activity i?
a) EFTi = ESTi + ti
b) EFTi = EFTj + tj
c) EFTi = EFTi−1 + ti
d) EFTi = ESTi − ti

What is the latest finish time for activity D in the following diagram?
a) 6
b) 13
c) 14
d) 15

What is the earliest start time for activity D in the following diagram?
a) 3
b) 4
c) 6
d) 7

What are the immediate successors of activity D in this network?
a) A, B, C
b) B, C
c) E, F
d) E

What are the immediate predecessors of activity D in this network?
a) A, B, C
b) B, C
c) E, F
d) E, G, H

How many paths are there in the following project precedence network?
a) 6
b) 7
c) 8
d) 9

Which activities have slack in the following diagram?
a) A, C, D, F
b) B, E
c) A, C, D, E
d) B, D, E

The critical path is the ____ path throughout the network.
a) longest
b) most expensive
c) shortest
d) least expensive

The longest path through a network is comprised of the ____ activities.
a) longest
b) essential
c) mandatory
d) critical
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b) The estimated parameters, b0 and b1, are linear.

c) The error terms are as small as possible.

d) The largest error term is as small as possible.

c) To visually check for a relationship between X and Y.

d) To estimate predicted values.

Adjusted R Square 0.821442

Standard Error 9.385572

Residual 8 704.7117 88.08896

Intercept 31.623780 10.442970 3.028236 0.016353 7.542233

X Variable 1 1.131661 0.173786 6.511819 0.000186 0.730910

d) to verify the errors are normally distributed.

Adjusted R Square 0.821442

Standard Error 9.385572

Regression 1 3735.3060 3735.30600 42.40379 0.000186

Residual 8 704.7117 88.08896

Intercept 31.623780 10.442970 3.028236 0.016353 7.542233

X Variable 1 1.131661 0.173786 6.511819 0.000186 0.730910

b) correlation coefficient.

d) regression sum of squares.

b) constant errors.

d) squared errors.

c) for examining linear trend data only.

d) for capturing uncertainty in predicted values of Y.

b) independent, uniformly distributed random variables.

c) dependent, normally distributed random variables.

d) independent, normally distributed random variables.

10 Regression 1 2843.4178 2843.4100 34930.220 0.0000

15 Intercept 38.1923 0.8131 46.9741 0.0000 36.3174 40.0672

16 X Variable 1 1.2447 0.0067 186.8963 0.0000 1.2293 1.2600

15 Intercept 38.1923 0.8131 46.9741 0.0000 36.3174 40.0672

16 X Variable 1 1.2447 0.0067 186.8963 0.0000 1.2293 1.2600

15 Intercept 38.1923 0.8131 46.9741 0.0000 36.3174 40.0672

16 X Variable 1 1.2447 0.0067 186.8963 0.0000 1.2293 1.2600

15 Intercept 38.1923 0.8131 46.9741 0.0000 36.3174 40.0672

16 X Variable 1 1.2447 0.0067 186.8963 0.0000 1.2293 1.2600

b) To determine a range of outcomes.

c) To determine a distribution of outcomes.

d) To determine a confidence interval on most likely outcomes.

c) find distribution information for the dependent variable(s).

d) find median values for the dependent variable(s).

b) half the old rate.

c) the same as the old rate.

b) to maximize the number of service providers

c) to minimize the cost of providing service

d) all of the above

b) The study of service times.

c) The study of waiting lines.

d) The evaluation of service time costs.

b) To reduce service times.

c) To generate more arrivals to the system.

d) To reduce worker idle time in line.

d) exponential; 1/λ

b) Mendelian inter-arrival times.

c) Mean inter-arrival times.

d) Mathematical inter-arrival times.

b) Multiple waiting lines, single service station.

c) Single waiting line, multiple service stations.

d) Multiple waiting lines, multiple service stations.

The following questions are based on the output below.

M/M/s queuing computations

Number of servers 1 (max of 40)

P(0), probability that the system is empty 0.2500