Pre-Assessment - Quantitative Analysis For Business (PHFO) questions with complete solutions

Pre-Assessment - Quantitative Analysis For
Business (PHFO)

A car stereo company is planning to introduce a new product into the market. It faces
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stiff competition from two other organizations with similar products. The company's
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marketing manager has asked the production manager to perform a break-even
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analysis using three different price points. The marketing manager will use the results to
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set a price for the new product.
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Which type of method is a break-even analysis? - answer-Quantitative
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Over the last three months, a small rural hospital has seen a sudden increase in the
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number of patients coming to the emergency room for non-emergency treatment. The
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hospital administrator wants to know why there is a sudden increase in demand and is
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considering three options to find out.
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Classify each method available to the administrator as qualitative or quantitative.
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Answer options may be used more than once or not at all. Select your answers from the
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pull-down list. - answer-Qualitative--Including an open-ended question on the intake
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form asking patients, "Please explain why you selected this ER for treatment." Intake
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forms can be sorted into non-emergency and emergency categories; the "non-
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emergency" responses can be analyzed to determine reasons the hospital was selected.
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Qualitative Group brainstorming with the nurses and doctors in the hospital to see what
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ideas people have for why so many people are suddenly coming to the ER for non-
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emergency treatment. v




Quantitative Pulling the hospital's records for the last 10 years and sorting by medical
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codes to check for similar patterns in past years. A regression model can be built using
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non-emergency treatments as the dependent variable, and various independent
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variables can be tested, such as population change and unemployment levels.
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A local music store that hosts live music has been a very popular hangout for years.
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However, the owner is concerned that the increasing popularity of new methods of
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music delivery will soon make the business obsolete. The owner is considering building
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a small recording studio in the basement of the store. The nearest professional studio is
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50 miles away, so a new studio may appeal to local musicians and increase foot traffic.
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The owner has all the costs of building the studio and has also estimated how much
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, vrevenue might increase due to the new studio (from studio rental fees, increased food
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vand drink sales if more people come to the live music shows, etc.). The owner will use
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vthis information to determine the net present value for the studio.
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Which method of analysis should this owner use to make a determination? - answer-
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Quantitative

How should quantitative analysis improve subsequent decision making for a firm that
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wants to determine whether its revenue has been increasing or decreasing for the past
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10 years? - answer-It will let the company determine the average revenue it made.
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An employee working for the Highway Safety Department in Albany, New York has the
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job to predict the automobile accidents in Albany for the next year. The employee
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currently has monthly data on the following variables for the city of Albany: the number
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of automobiles registered, the sales of alcoholic beverages, and the rainfall in inches.
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How can this employee realistically predict the accidents in Albany for next year? -
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answer-Use a multiple regression equation using accident as the dependent variable
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and others as independent variables
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A marketing manager for a corporation that markets a broad range of food brands needs
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to plan a monthly marketing, advertising, and sales promotion budget for next year and
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is looking at monthly sales. One brand shows dramatic fluctuations in sales over the
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past three years.
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How should this manager use quantitative analysis to make budgeting decisions for this
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brand? - answer-Compute seasonality indices for each month to forecast next year's
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monthly sales
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Y-hat = a + b 1 X 1 + b 2 X 2v v v v v v v v v v v v v
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The constant is 3, the b 1 coefficient is 4, the b 2 coefficient is -1, X 1 is 3, and X 2 is 6.
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What is the predicted value of Y? - answer-9
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Y-hat = a + b 1 X 1 + b 2 X 2 + b 3 X 3 + b 4 X 4 - answer--44
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What is the value of the following expression?
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7 ^ 2/3^ 4 - answer-49/81 = 0.6049
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A hair stylist placed an ad on the home page of the online community shopper website.
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Daily site visit demographics indicate the following age categories of visitors:
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Age Category Age Range Percent of Site Visits
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A Younger than age 18 10
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B Ages 18 to 24 13
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C Ages 25 to 36 15
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