C723 QUANTITATIVE ANALYSIS FOR BUSINESS
(PA) QUESTIONS AND CORRECT SOLUTIONS
1 A car stereo company is planning to introduce a new product into the
market. It faces stiff competition from two other organizations with similar
products. The company's marketing manager has asked the production manager
to perform a break-even analysis using three different price points. The
marketing manager will use the results to set a price for the new product.
Which type of method is a break-even analysis?
O Expert judgment
O Quantitative
O Qualitative
O Payback table - Correct answer~ Quantitative
cuz break-even analysis using price points involves numbers
Quantitative or Quantity=Number
2 Over the last three months, a small rural hospital has seen a sudden
increase in the number of patients coming to the emergency room for non-
emergency treatment. The hospital administrator wants to know why there is a
sudden increase in demand and is considering three options to find out.
Classify each method available to the administrator as qualitative or quantitative.
Answer options may be used more than once or not at all. Select your
answers from the pull-down list.
Including an open-ended question on the intake form asking patients, "Please
explain why you selected this ER for
treatment." Intake forms can be sorted into non-emergency and emergency
categories; the "non-emergency"
responses can be analyzed to determine reasons the hospital was selected
,Qualitative
Pulling the hospital's records for the last 10 years and sorting by medical
codes to check for similar patterns in past
years. A regression - Correct answer~ Qualitative
cuz a why you selected question is an opinion.
Qualitative or Quality=Opinion
Qualitative
cuz the question can't be counted like 1+2+3+4+5=15.
Qualitative or Quality=Opinion
Quantitative cuz how many ideas are counted for ER visits.
Quantitative or Quantity=Number
3 A local music store that hosts live music has been a very popular hangout
for years. However, the owner is concerned that the increasing popularity of
new methods of music delivery will soon make the business obsolete. The
owner is considering building a
small recording studio in the basement of the store. The nearest professional
studio is 50 miles away, so a new studio may appeal to local musicians and
increase foot traffic. The owner has all the costs of building the studio and
has also estimated how much revenue might increase due to the new studio
(from studio rental fees, increased food and drink sales if more people come
to the live music shows, etc.). The owner will use this information to
determine the net present value for the studio.
Which method of analysis should this owner use to make a determination?
O Decision tree
O Expert judgment
,O Quantitative
O Qualitative - Correct answer~ Quantitative
cuz counting number cost of building, food, drink, etc. Quantitative or
Quantity=Number.
4 How should quantitative analysis improve subsequent decision making for a
firm that wants to determine whether its revenue has
been increasing or decreasing for the past 10 years?
O It will help the company see why it has been making a profit
O It will let the company determine the average revenue it made.
O It will help the company see which customers bought its items.
O It will help the company see the competitors' average revenue. - Correct
answer~ It will let the company determine the average revenue it made.
cuz revenue is the question to answer
5 An employee working for the Highway Safety Department in Albany, New
York has the job to predict the automobile accidents in
Albany for the next year. The employee currently has monthly data on the
following variables for the city of Albany: the number of
automobiles registered, the sales of alcoholic beverages, and the rainfall in
inches.
How can this employee realistically predict the accidents in Albany for next
year?
O Use the ratio of accidents versus each of the other variables and then
average the three values
O Use a multiple regression equation using accident as the dependent variable
and others as independent variables
, O Use a multiple regression equation using automobiles registered as the
dependent variable and others as independent
variables
O Use the sales of alcoholic beverages because the other variables are less
significant - Correct answer~ Use a multiple regression equation using accident
as the dependent variable and others as independent variables.
cuz accidents the question, are the dependent variable the reason why is
because rain, alcohol, distracted, etc.
6 A marketing manager for a corporation that markets a broad range of food
brands needs to plan a monthly marketing, advertising,
and sales promotion budget for next year and is looking at monthly sales. One
brand shows dramatic fluctuations in sales over the past three years.
How should this manager use quantitative analysis to make budgeting decisions
for this brand?
O Compute quarterly averages based on each month in the quarter
O Use last year's budget amounts regardless of average sales values
O Compute seasonality indices for each month to forecast next year's monthly
sales
O Use average sales values for all of the months over the past two years -
Correct answer~ Compute seasonality (seasonal) indices (indexes) for each month
to forecast next year's monthly sales.
cuz it will give you visuals to see fluctuations in price over time.
7 Y-hat=a+b1X1 +b2X2
(PA) QUESTIONS AND CORRECT SOLUTIONS
1 A car stereo company is planning to introduce a new product into the
market. It faces stiff competition from two other organizations with similar
products. The company's marketing manager has asked the production manager
to perform a break-even analysis using three different price points. The
marketing manager will use the results to set a price for the new product.
Which type of method is a break-even analysis?
O Expert judgment
O Quantitative
O Qualitative
O Payback table - Correct answer~ Quantitative
cuz break-even analysis using price points involves numbers
Quantitative or Quantity=Number
2 Over the last three months, a small rural hospital has seen a sudden
increase in the number of patients coming to the emergency room for non-
emergency treatment. The hospital administrator wants to know why there is a
sudden increase in demand and is considering three options to find out.
Classify each method available to the administrator as qualitative or quantitative.
Answer options may be used more than once or not at all. Select your
answers from the pull-down list.
Including an open-ended question on the intake form asking patients, "Please
explain why you selected this ER for
treatment." Intake forms can be sorted into non-emergency and emergency
categories; the "non-emergency"
responses can be analyzed to determine reasons the hospital was selected
,Qualitative
Pulling the hospital's records for the last 10 years and sorting by medical
codes to check for similar patterns in past
years. A regression - Correct answer~ Qualitative
cuz a why you selected question is an opinion.
Qualitative or Quality=Opinion
Qualitative
cuz the question can't be counted like 1+2+3+4+5=15.
Qualitative or Quality=Opinion
Quantitative cuz how many ideas are counted for ER visits.
Quantitative or Quantity=Number
3 A local music store that hosts live music has been a very popular hangout
for years. However, the owner is concerned that the increasing popularity of
new methods of music delivery will soon make the business obsolete. The
owner is considering building a
small recording studio in the basement of the store. The nearest professional
studio is 50 miles away, so a new studio may appeal to local musicians and
increase foot traffic. The owner has all the costs of building the studio and
has also estimated how much revenue might increase due to the new studio
(from studio rental fees, increased food and drink sales if more people come
to the live music shows, etc.). The owner will use this information to
determine the net present value for the studio.
Which method of analysis should this owner use to make a determination?
O Decision tree
O Expert judgment
,O Quantitative
O Qualitative - Correct answer~ Quantitative
cuz counting number cost of building, food, drink, etc. Quantitative or
Quantity=Number.
4 How should quantitative analysis improve subsequent decision making for a
firm that wants to determine whether its revenue has
been increasing or decreasing for the past 10 years?
O It will help the company see why it has been making a profit
O It will let the company determine the average revenue it made.
O It will help the company see which customers bought its items.
O It will help the company see the competitors' average revenue. - Correct
answer~ It will let the company determine the average revenue it made.
cuz revenue is the question to answer
5 An employee working for the Highway Safety Department in Albany, New
York has the job to predict the automobile accidents in
Albany for the next year. The employee currently has monthly data on the
following variables for the city of Albany: the number of
automobiles registered, the sales of alcoholic beverages, and the rainfall in
inches.
How can this employee realistically predict the accidents in Albany for next
year?
O Use the ratio of accidents versus each of the other variables and then
average the three values
O Use a multiple regression equation using accident as the dependent variable
and others as independent variables
, O Use a multiple regression equation using automobiles registered as the
dependent variable and others as independent
variables
O Use the sales of alcoholic beverages because the other variables are less
significant - Correct answer~ Use a multiple regression equation using accident
as the dependent variable and others as independent variables.
cuz accidents the question, are the dependent variable the reason why is
because rain, alcohol, distracted, etc.
6 A marketing manager for a corporation that markets a broad range of food
brands needs to plan a monthly marketing, advertising,
and sales promotion budget for next year and is looking at monthly sales. One
brand shows dramatic fluctuations in sales over the past three years.
How should this manager use quantitative analysis to make budgeting decisions
for this brand?
O Compute quarterly averages based on each month in the quarter
O Use last year's budget amounts regardless of average sales values
O Compute seasonality indices for each month to forecast next year's monthly
sales
O Use average sales values for all of the months over the past two years -
Correct answer~ Compute seasonality (seasonal) indices (indexes) for each month
to forecast next year's monthly sales.
cuz it will give you visuals to see fluctuations in price over time.
7 Y-hat=a+b1X1 +b2X2
