Mid Term Exam Xlri BMD 22-24

9/8/22, 10:29 AM MID TERM EXAM _XLRI_BMD_22-24
MID TERM EXAM _XLRI_BMD_22-24

8th September 2022
Use these data to find: P(D|F)= ?
* (1 Point)
0.817
0.524
0.216
0.302
0.0
https://forms.office.com/pages/responsepage.aspx?id=nZvnx-nsM0GHQ7bK0mxXT6er7Tq7aANKgl5IWXrLFLNURE5KTktIWkNVMFFaNk1ZWl… 1/21
If x is a normal random variable with mean 80 and standard deviation 5, the

z-score for x = 88 is ________. * (1 Point)
1.8
-1.6
1.6
-1.8
Suppose 18 major computer companies operate in the United States and

that 12 are located in California’s Silicon Valley. If three computer companies
are selected randomly from the entire list, what is the probability that one or
more of the selected companies are located in the Silicon Valley? * (1 Point)
0.2696
0.9755
0.2206
0.4853
0.5786
A certain piece of equipment has to be purchased for a construction project

at a remote location. This equipment contains an expensive part that is
subject to random failure. Spares of this part can be purchased at the same
time the equipment is purchased. Their unit cost is Rs 1,500 and they have
no scrap value. If the part fails on the job and no spare is available, the part
will have to be manufactured on a special order basis. If this is required, the
total cost including down time of the equipment, is estimated at Rs 9,000 for
each such occurrence. Based on previous experience with similar parts, the
following probability estimates of the number of failures expected over the
duration of the project are provided below:
Failure : 0, 1, 2
Probability : 0.80, 0.15, 0.05
Determine the expected profit with perfect information and expected value
of perfect information.
* (1 Point)
EPPI = Rs 275, EVPI =1275
Student Section *
The U.S. Energy Department states that 60% of all U.S. households have
ceiling fans. In addition, 29% of all U.S. households have an outdoor grill.
Suppose 13% of all U.S. households have both a ceiling fan and an outdoor
grill. A U.S. household is randomly selected.
What is the probability that the household has a ceiling fan or an outdoor
grill?
* (1 Point)
0.47
0.76
0.29
0.24
0.16

Failure : 0, 1, 2
Probability : 0.80, 0.15, 0.05
Determine optimal EMV* and optimal number of spares to purchase initially.

* (1 Point)
Since weighted cost = Rs 1,950 is lowest due to second course of action, i.e. 1, so it
should be chosen. If the EMV is expressed in terms of profit, then EMV* = EMV(S2) = – Rs
1,950. Hence, the optimal number of spares to be purchased initially should be one.
Since weighted profit = Rs 2,250 is highest due to third course of action, i.e. 2, so it
should be chosen. Hence, the optimal number of spares to be purchased initially should
be two.
Since weighted cost = Rs 3300 is highest due to first course of action, i.e. 0, so it should
be chosen. If the EMV is expressed in terms of profit, then EMV* = EMV(S2) = – Rs 3300.
Hence, the optimal number of spares to be purchased initially should be 0.
What is the probability that the household does have a ceiling fan and does
not have an outdoor grill?
* (1 Point)
0.76
0.47
0.24
0.16
0.29

Failure : 0, 1, 2
Probability : 0.80, 0.15, 0.05
Based on opportunity losses, determine the optimal course of action and

optimal value of EOL. * (1 Point)
Since minimum, EOL* = EOL(S1) = Rs 1,275, therefore adopt course of action S1 and pur‐
chase zero spare
chase one spare
chase two spare
10
The net profit from a certain investment is normally distributed with a mean
of $10,000 and a standard deviation of $5,000. The probability that the
investor will not have a net loss is _____________. * (1 Point)
0.4772
0.0228
0.9544
0.9772
11
The expected (mean) life of a particular type of light bulb is 1,000 hours with
a standard deviation of 50 hours. The life of this bulb is normally
distributed. What is the probability that a randomly selected bulb would last
longer than 1150 hours? * (1 Point)
0.4987
0.9987
0.0013
0.5013
0.5513
12
Name of the Candidate *
Mayank Jindal
13
Shown here are the top 10 U.S. cities ranked by number of rooms sold in a
recent year. Suppose four of these cities are selected randomly. What is the
probability that none of the cities is east of the Mississippi River? * (1 Point)
0.0526
0.1333
0.0238
0.1143
0.0034
14
While using Hurwiez criterion, the coefficient of realism * (1 Point)
represents the degree of optimism
represents the degree of pessimisms

is the probability of a state of nature
none of the above
15
Consider the random variable X, representing the percentage change in the

price of stock A from now to a year from now. This change is driven partly by
circumstances specific to company A, but it is also driven partly by the
economy as a whole. In this case, the outcome of the economy is the
external event. Let’s assume that the economy in the coming year will be
awful, stable, or great with probabilities 0.20, 0.50, and 0.30, respectively. In
addition, we make the following assumptions.
■ Given that the economy is awful, the mean and standard deviation of X
are −20% and 30%.
■ Given that the economy is stable, the mean and standard deviation of X
are 5% and 20%.
■ Given that the economy is great, the mean and standard deviation of X
are 25% and 15%.
Each of these statements is a statement about X, conditional upon the

economy. What can you say about the unconditional mean and standard
deviation of X? That is, what are the mean and standard deviation of X
before you learn the state of the economy?
* (1 Point)
8.4% and 26.2
6% and 26.3%
8% and 28%
6% and 25%
16
A manufacturer manufactures a product, of which the principal ingredient is

a chemical X. At the moment, the manufacturer spends Rs 1,000 per year on
supply of X, but there is a possibility that the price may soon increase to four
times its present figure because of a worldwide shortage of the chemical.
There is another chemical Y, which the manufacturer could use in
conjunction with a third chemical Z, in order to give the same effect as
chemical X. Chemicals Y and Z would together cost the manufacturer Rs
3,000 per year, but their prices are unlikely to rise. What action should the
manufacturer take by Applying the maximin and minimax criteria for
decision-making. * (1 Point)
Through maximin decision-making criteria manufacturer should use the course of action

"use Y & Z" and through minimax decision-making criteria manufacturer should use the
course of action "use X"
Through maximin decision-making criteria manufacturer should use the course of action
"use X" and through minimax decision-making criteria manufacturer should use the course
of action "use Y & Z"
For Both maximin & minimax decision-making criteria manufacturer should use the course
of action "use X".
For Both maximin & minimax decision-making criteria manufacturer should use the course
of action "use Y & Z".
17
What is the probability that the household has neither a ceiling fan nor an
outdoor grill?
* (1 Point)
0.71
0.24
0.47
0.16
0.29
18
An investor is given the following investment alternatives and percentage

rates of return. Over the past 300 days, 150 days have been medium market
conditions and 60 days have had high market increases. On the basis of
these data, state the optimum investment strategy for the investment. *
(1 Point)
Since the expected return of 23% is the highest for property, the investor should invest in
this alternative.
Since the expected return of 25% is the highest for risky shares, the investor should invest
in this alternative.
Since the expected return of 30% is the highest for property, the investor should invest in
this alternative.
Since the expected return of 32% is the highest for regular shares, the investor should in‐
vest in this alternative.
19
Use these data to find: P(G|C)= ?
* (1 Point)
0.817
0.524
0.216
0.302
0.0
20
Let x be a binomial random variable with n=100 and p=.8. The probability of
less than 78 successes, when using the normal approximation for binomial is
________ * (1 Point)
0.2659
0.04
0.64
0.0002
21
A businessman has two independent investment portfolios A and B available

to him but he lacks the capital to undertake both of them simultaneously. He
can either choose A first and then stop, or if A is not successful, then take B
or vice versa. The probability of success of A is 0.6 while for B it is 0.04. Both
investment schemes require an initial capital outlay of rupees 10,000 and
both return nothing, if the venture proves to be unsuccessful. Successful
completion of A will return Rs 20000 (over cost) and successful completion
of B will return rupees 24,000 (over cost) The EMV value for the best
strategy is; * (1 Point)
12324
11250
12000
10160
18825
22
A company has 140 employees, of which 30 are supervisors. Eighty of the

employees are married, and 20% of the married employees are supervisors.
If a company employee is randomly selected, what is the probability that the
employee is married and is a supervisor? * (1 Point)
0.5714
0.601
0.1143
0.1032
0.5341
23
Suppose x is a normal random variable with mean 60 and standard deviation

2. A z score was calculated for a number, and the z score is 3.4. What is x? *
(1 Point)
66.8
53.2
68.6
56.6
63.4
24
A large steel manufacturing company has three options with regard to

production: (i) produce commercially (ii) build pilot plant (iii) stop producing
steel. The management has estimated that their pilot plant, if built, has 0.8
chance of high yield and 0.2 chance of low yield. If the pilot plant does show
a hight yield, management assigns a probability of 0.75 that the commercial
plant will also have a high yield. If the pilot plant shows a low yield, there is
only a 0.1 chance that the commercial plant will show a high yield. Finally,
management’s best assessment of the yield on a commercial-size plant
without building a pilot plant first has a 0.6 chance of high yield. A pilot
plant will cost Rs. 3,00,000. The profits earned under high and low yield
conditions are Rs. 1,20,00,000 and – Rs. 12,00,000 respectively. The optimum
decision for the company is: * (1 Point)
The company should build pilot plant.
The company should stop producing steel
The company should produce commercially
25
Completion time (from start to finish) of a building remodeling project is

normally distributed with a mean of 200 work-days and a standard deviation
of 10 work-days. The probability that the project will be completed within
185 work-days is ______. * (1 Point)
0.4332
0.0668
0.9332
0.9950
26
A vegetable seller buys tomatoes for Rs. 45 a box and sells them for Rs. 80
per box. If the box is not sold on the first selling day, it is worth Rs. 15 as
salvage. The past records indicate that demand is normally distriubuted, with
a mean of 30 boxes daily and a standard deviation of 9 boxes. How many
boxes should he stock? * (1 Point)
35
31
36
39
27
Student email ID *
bd22024@astra.xlri.ac.in
28
At a certain workstation in an assembly line, the time required to assemble a

component is exponentially distributed with a mean time of 10 minutes. Find
the probability that a component is assembled in 7 minutes or less?
* (1 Point)
0.349
0.503
0.714
0.286
29
The decision-making criterion that should be used to achieve maximum

long-term payoff is * (1 Point)
EOL
EMV
Hurwicz
Maximax
30
Use these data to find: P(B|F)= ?
* (1 Point)
0.817
0.524
0.216
0.302
0.0
31
A manufacturer manufactures a product, of which the principal ingredient is

a chemical X. At the moment, the manufacturer spends Rs 1,000 per year on
supply of X, but there is a possibility that the price may soon increase to four
times its present figure because of a worldwide shortage of the chemical.
There is another chemical Y, which the manufacturer could use in
conjunction with a third chemical Z, in order to give the same effect as
chemical X. Chemicals Y and Z would together cost the manufacturer Rs
3,000 per year, but their prices are unlikely to rise. If the coefficient
of optimism is 0.4, then find the course of action that minimizes the cost. *
(1 Point)
The Course of action i.e. "use X", has the least cost i.e. Rs. 2800, so Manufacturer should
adopt this.
The Course of action i.e. "use Y & Z", has the least cost i.e. Rs. 2200, so Manufacturer
should adopt this.
The Course of action i.e. "use X", has the least cost i.e. Rs. 2500, so Manufacturer should
adopt this.
The Course of action i.e. "use Y & Z", has the least cost i.e. Rs. 2100, so Manufacturer
should adopt this.
32
probability that exactly two cities are in California? * (1 Point)
0.0526
0.1333
0.0238
0.453
0.0034
33
The Oil India Corporation (OIC) is wondering whether to go for an offshore

oil drilling contract that is to be awarded in Bombay high. If OIC bid, value
would be rupees 600 million with a 65% chance of gaining the contract. The
OIC may set up a new drilling operation or move to already existing
operation, which has already proved successful for a new site. The
probability of success and expected returns are given in the table below; If
the corporation do not bid or lose the contract they can use Rs. 600 million
to modernize their operation. This would result in a return of either 5% or
8% on the sum invested with the probability 0.45 and 0.55 (assume that all
cost and revenue have been discounted to the present value). By applying an
appropriate decision criteria recommended whether or not to oil
India corporation should bid the contract. * (1 Point)
Not to bid since it is a loss making business (EOL is very high 647.58)
Go for bid and establish a new drilling operation (EMV is very high 257.34)
Not to bid but modernize since it seems to be best option on the basis of EOL 39.9)
Go for bid but not establish a new drilling operation (since max EMV is not only 348.42)
34
A TV dealer finds that the cost of holding a TV in stock for a week is Rs. 50.
Customers who cannot obtain new TV sets immediately tend to go to other
dealers and he estimates that for every customer who cannot get immediate
delivery he loses an average of Rs. 200. For one particular model of TV the
probabilities of demand of 0, 1, 2, 3, 4 and 5 TV sets in a week are 0.05, 0.10,
0.20, 0.30, 0.20 and 0.15, respectively. For this Computed value of EVPI is; *
(1 Point)
EVPI =82.50
EVPI =81.90
EVPI =83.92
EVPI = 85.60
35
The probability that a call to an emergency help line is answered in less than
10 seconds is 0.8. Assume that the calls are independent of each other. Using
the normal approximation for binomial with a correction for continuity, the
probability that at least 75 of 100 calls are answered within 10 seconds is
approximately _______ * (1 Point)
0.1313
0.9154
0.8687
0.5235
0.8
36
probability that exactly three of the cities are ones with more than 24 million
rooms sold? * (1 Point)
0.0526
0.1333
0.0238
0.1143
0.0034
37
The manager of a flower shop promises its customers delivery within four
hours on all flower orders. All flowers are purchased on the previous day and
delivered to Parker by 8.00 am the next morning. The daily demand for roses
is as follows.
Dozens of roses : 70, 80, 90, 100
Probability : 0.1, 0.2, 0.4, 0.3
The manager purchases roses for Rs 10 per dozen and sells them for Rs 30.
All unsold roses are donated
to a local hospital. How many dozens of roses should Parker order each
evening to maximize its profits? What is the optimum expected profit?
* (1 Point)
Since the highest EMV of Rs 168 corresponds to the course of action 90, the flower shop
should purchase 90 dozen roses everyday.
38
What is the probability that the household does not have a ceiling fan and
does have an outdoor grill?
* (1 Point)
0.76
0.16
0.47
0.16
0.29
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9/8/22, 10:29 AM MID TERM EXAM _XLRI_BMD_22-24

MID TERM EXAM _XLRI_BMD_22-24

Use these data to find: P(D|F)= ?

If x is a normal random variable with mean 80 and standard deviation 5, the

Suppose 18 major computer companies operate in the United States and

A certain piece of equipment has to be purchased for a construction project

Failure : 0, 1, 2

Probability : 0.80, 0.15, 0.05

EPPI = Rs 275, EVPI =1275

EPPI = Rs 375, EVPI =1175

EPPI = Rs 375, EVPI =1575

EPPI = Rs 275, EVPI =1375

A certain piece of equipment has to be purchased for a construction project

Failure : 0, 1, 2

Probability : 0.80, 0.15, 0.05

Determine optimal EMV* and optimal number of spares to purchase initially.

A certain piece of equipment has to be purchased for a construction project

Failure : 0, 1, 2

Probability : 0.80, 0.15, 0.05

Based on opportunity losses, determine the optimal course of action and

Name of the Candidate *

While using Hurwiez criterion, the coefficient of realism * (1 Point)

represents the degree of optimism

represents the degree of pessimisms

is the probability of a state of nature

none of the above

Consider the random variable X, representing the percentage change in the

Each of these statements is a statement about X, conditional upon the

8.4% and 26.2

A manufacturer manufactures a product, of which the principal ingredient is

Through maximin decision-making criteria manufacturer should use the course of action

An investor is given the following investment alternatives and percentage

Use these data to find: P(G|C)= ?

A businessman has two independent investment portfolios A and B available

A company has 140 employees, of which 30 are supervisors. Eighty of the

Suppose x is a normal random variable with mean 60 and standard deviation

A large steel manufacturing company has three options with regard to

The company should build pilot plant.

The company should stop producing steel

The company should produce commercially

Completion time (from start to finish) of a building remodeling project is

At a certain workstation in an assembly line, the time required to assemble a

The decision-making criterion that should be used to achieve maximum

Use these data to find: P(B|F)= ?

A manufacturer manufactures a product, of which the principal ingredient is

The Oil India Corporation (OIC) is wondering whether to go for an offshore

Dozens of roses : 70, 80, 90, 100

Probability : 0.1, 0.2, 0.4, 0.3

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