MGMT 630 MT Exam Questions with Verified Solutions Graded A+
At the break-even point? - Answers Total revenue equals total cost AND Profit is zero
In decision making under ________, there are several possible outcomes for each
alternative, and the decision maker knows the probability of occurrence of each outcome. -
Answers risk
Bayes' theorem enables decision makers to revise probabilities based on - Answers additional
information
Which of the following is an assumption of the regression model? - Answers The errors are
independent
Decision trees are particularly useful when - Answers a sequence of decisions must be made
Which of the following variables is considered random or probabilistic? - Answers future interest
rates
In decision analysis when constructing a utility curve, - Answers the certainty of a certain
amount is compared with the willingness to gamble that amount on a larger amount
The expected value of sample information (EVSI) can be used to - Answers establish a
maximum amount to spend on additional information
Properties of the normal distribution include - Answers a continuous bell-shaped distribution for
which the mean, median and mode overlap
The dean of students of a university is planning to charge students $150 to attend a summer
freshmen's seminar course. It cost $3000 to reserve a room, hire an instructor,
and bring in the necessary presentation equipment. Assume it costs $25 per student for the
dean to provide the course materials. How many students would have to register for the
seminar for the university to break-event? - Answers 3,000 + 25x = 150x
x = 24
Assume that you have tried three different forecasting models. For the first, the MAD = 2.5, for
the second, the MSE = 10.5, and for the third, the MAPE = 2.7. We can then say: - Answers no
method is best or worst
When does P(A|B) = P(A)? - Answers when A and B are statistically independent
Which of the following statement(s) are true regarding the advantages of quantitative analysis
approach in using modeling (or management science modeling)? - Answers Models accurately
, represent reality, help decision makers, save time, AND may be the only way to solve some large
problems in a timely manner
If computing a causal linear regression model of Y = a + bX and the resultant r2 is very near zero,
then one would be able to conclude that - Answers Y = a + bX is not a good forecasting method
Which of the following is true about the expected value of perfect information? - Answers It is
calculated as expected value with perfect information minus maximum EMV
EKA company manufactures a small plastic toy for children. Each toy is sold for $15. The unit
production cost of the toy is $3. The fixed monthly cost of operating the
manufacturing facility is $3000. How many toys have to be sold in a month to break-even? -
Answers 3,000 + 3x = 15x
x = 250
A conditional probability P(B|A) is equal to its marginal probability P(B) if - Answers statistical
independence exists
The three decision-making environments are decision making under ________ - Answers risk,
certainty, and uncertainty
The ABC Corporation is considering introducing a new product, which will require buying new
equipment for a monthly payment of $5,000. Each unit produced can be sold for
$20.00. ABC incurs a variable cost of $10.00 per unit. Suppose that ABC would like to realize a
monthly profit of $50,000. How many units must they sell each month to realize
this profit? - Answers 20x - (5,000 + 10x) = 50,000
x = 5,500
A pessimistic decision making criterion is - Answers maximin
Which of the following is an equation to determine the break-even point (BEP) in units? -
Answers BEP = fixed cost / (selling price per unit - variable cost per unit)
Which of the following equalities is correct? - Answers SST = SSR + SSE
In Bayesian analysis, conditional probabilities are also known as which of the following? -
Answers posterior probabilities
A judgmental forecasting technique that uses decision makers, staff personnel, and respondent
to determine a forecast is called - Answers the Delphi method
Which of the following is a technique used to determine forecasting accuracy? - Answers mean
absolute percent error (MAPE)
At the break-even point? - Answers Total revenue equals total cost AND Profit is zero
In decision making under ________, there are several possible outcomes for each
alternative, and the decision maker knows the probability of occurrence of each outcome. -
Answers risk
Bayes' theorem enables decision makers to revise probabilities based on - Answers additional
information
Which of the following is an assumption of the regression model? - Answers The errors are
independent
Decision trees are particularly useful when - Answers a sequence of decisions must be made
Which of the following variables is considered random or probabilistic? - Answers future interest
rates
In decision analysis when constructing a utility curve, - Answers the certainty of a certain
amount is compared with the willingness to gamble that amount on a larger amount
The expected value of sample information (EVSI) can be used to - Answers establish a
maximum amount to spend on additional information
Properties of the normal distribution include - Answers a continuous bell-shaped distribution for
which the mean, median and mode overlap
The dean of students of a university is planning to charge students $150 to attend a summer
freshmen's seminar course. It cost $3000 to reserve a room, hire an instructor,
and bring in the necessary presentation equipment. Assume it costs $25 per student for the
dean to provide the course materials. How many students would have to register for the
seminar for the university to break-event? - Answers 3,000 + 25x = 150x
x = 24
Assume that you have tried three different forecasting models. For the first, the MAD = 2.5, for
the second, the MSE = 10.5, and for the third, the MAPE = 2.7. We can then say: - Answers no
method is best or worst
When does P(A|B) = P(A)? - Answers when A and B are statistically independent
Which of the following statement(s) are true regarding the advantages of quantitative analysis
approach in using modeling (or management science modeling)? - Answers Models accurately
, represent reality, help decision makers, save time, AND may be the only way to solve some large
problems in a timely manner
If computing a causal linear regression model of Y = a + bX and the resultant r2 is very near zero,
then one would be able to conclude that - Answers Y = a + bX is not a good forecasting method
Which of the following is true about the expected value of perfect information? - Answers It is
calculated as expected value with perfect information minus maximum EMV
EKA company manufactures a small plastic toy for children. Each toy is sold for $15. The unit
production cost of the toy is $3. The fixed monthly cost of operating the
manufacturing facility is $3000. How many toys have to be sold in a month to break-even? -
Answers 3,000 + 3x = 15x
x = 250
A conditional probability P(B|A) is equal to its marginal probability P(B) if - Answers statistical
independence exists
The three decision-making environments are decision making under ________ - Answers risk,
certainty, and uncertainty
The ABC Corporation is considering introducing a new product, which will require buying new
equipment for a monthly payment of $5,000. Each unit produced can be sold for
$20.00. ABC incurs a variable cost of $10.00 per unit. Suppose that ABC would like to realize a
monthly profit of $50,000. How many units must they sell each month to realize
this profit? - Answers 20x - (5,000 + 10x) = 50,000
x = 5,500
A pessimistic decision making criterion is - Answers maximin
Which of the following is an equation to determine the break-even point (BEP) in units? -
Answers BEP = fixed cost / (selling price per unit - variable cost per unit)
Which of the following equalities is correct? - Answers SST = SSR + SSE
In Bayesian analysis, conditional probabilities are also known as which of the following? -
Answers posterior probabilities
A judgmental forecasting technique that uses decision makers, staff personnel, and respondent
to determine a forecast is called - Answers the Delphi method
Which of the following is a technique used to determine forecasting accuracy? - Answers mean
absolute percent error (MAPE)
