Question 1

What is the standard deviation of the ending balance? What does the distribution look like now? What should Amanda infer from this?

Accepted Answer

The standard deviation has dropped considerably,to about $370,000,and the distribution is not nearly as skewed.The reduction is expected value is clearly offset by an accompanying reduction in risk.

Question 2

In warranty cost models,the key input random variable is product lifetime.

Accepted Answer

A) True 
 B)False  True

Question 3

A key objective in cash flow models is often to determine the amount of debt that must be taken out to maintain a minimum cash balance.

Accepted Answer

A) True 
 B)False  True

Question 4

A marketing simulation model can be used to determine the expected profit under uncertain customer loyalty,and then we can use an optimization model to determine the optimal amount to spend on increasing customer loyalty.

Accepted Answer

A) True 
 B)False

Question 5

Uncertain timing and the events that follow in process modeling can be modeled using IF statements.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is among the questions that financial analysts try to answer with simulation models?

Accepted Answer

A)  Mean and variance of a project NPV 
B)  Probability that a project with have a negative NPV 
C)  Probability that a company will have to borrow a certain amount during the next year 
D)  Mean and variance of a company's profit during the next fiscal year 
E)  All of these options 
A)  Mean and variance of a project NPV 
B)  Probability that a project with have a negative NPV 
C)  Probability that a company will have to borrow a certain amount during the next year 
D)  Mean and variance of a company's profit during the next fiscal year 
E)  All of these options

Question 7

Which of the following distributions is most likely to be used to develop a simulation model for estimating the time until failure of a product in a simulation model?

Accepted Answer

A)  Binomial 
B)  Gamma 
C)  Normal 
D)  Chi-square 
A)  Binomial 
B)  Gamma 
C)  Normal 
D)  Chi-square

Question 8

Bidding for contracts is an example of which of the following types of simulation model application?

Accepted Answer

A)  Operations models 
B)  Financial models 
C)  Marketing models 
D)  Games of chance 
E)  None of these options 
A)  Operations models 
B)  Financial models 
C)  Marketing models 
D)  Games of chance 
E)  None of these options

Question 9

In financial simulation models,we are typically more interested in the expected NPV of a project than in the extremes of the outcomes.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following are not among the marketing applications of simulation?

Accepted Answer

A)  The entry of new brands into the market 
B)  Customer preferences for different attributes of products 
C)  Brand-switching behavior of customers 
D)  The effect of advertising on sales 
E)  None of these options 
A)  The entry of new brands into the market 
B)  Customer preferences for different attributes of products 
C)  Brand-switching behavior of customers 
D)  The effect of advertising on sales 
E)  None of these options

Question 11

RISKTARGET is a function that allows us to determine the cumulative probability of a particular value in an output distribution,such as the probability of meeting a due date in manufacturing.

Accepted Answer

A) True 
 B)False

Question 12

The two random variables we typically simulate as inputs in bidding models are?

Accepted Answer

A)  Number of bidding competitors and bid amount 
B)  Number of bidding competitors and bid profit 
C)  Individual bid amounts and net bidding profits 
D)  Mean number of bidding competitors and net bidding profit 
E)  None of these options 
A)  Number of bidding competitors and bid amount 
B)  Number of bidding competitors and bid profit 
C)  Individual bid amounts and net bidding profits 
D)  Mean number of bidding competitors and net bidding profit 
E)  None of these options

Question 13

The value at risk (VAR)is typically defined as the:

Accepted Answer

A)  5th percentile of NPV distribution 
B)  10th percentile of NPV distribution 
C)  50th percentile of NPV distribution 
D)  90th percentile of NPV distribution 
E)  95th percentile of NPV distribution 
A)  5th percentile of NPV distribution 
B)  10th percentile of NPV distribution 
C)  50th percentile of NPV distribution 
D)  90th percentile of NPV distribution 
E)  95th percentile of NPV distribution

Question 14

In a warranty cost modeling model,which of the following is a key input random variable?

Accepted Answer

A)  Warranty cost 
B)  Warranty time limitation 
C)  Lifetime of product 
D)  Replacement cost of product 
E)  All of these options 
A)  Warranty cost 
B)  Warranty time limitation 
C)  Lifetime of product 
D)  Replacement cost of product 
E)  All of these options

Question 15

In marketing and sales models,the primary issue is the uncertain amount of sales that can be obtained,given an assumed timing.

Accepted Answer

A) True 
 B)False

Question 16

Given your answers to Questions 51 through 55,would you invest in this project?
Suppose that GM earns a $4000 profit each time a person buys a car.We want to determine how the expected profit earned from a customer depends on the quality of GM's cars.The customer is assumed to buy a new car every five years,for a total of 10 cars through her lifetime.The customer will keep buying GM cars so long as they are satisfied with them.The probability that the customer will be satisfied with her GM car is 80%.If she is not satisfied with her GM car,she will buy another brand (we'll call all other brands cumulatively "Toyota").The probability that she is satisfied with "Toyota" is 85%.

Accepted Answer

Although this project has a po

Question 17

In financial simulation models,the value at risk (VAR)is the 5th percentile of an output distribution,and it indicates nearly the worst possible outcome.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following @RISK functions can be used to find the probability of a particular value in an output distribution?

Accepted Answer

A)  RISKMIN 
B)  RISKMAX 
C)  RISKPERCENTILE 
D)  RISKTARGET 
E)  None of these options 
A)  RISKMIN 
B)  RISKMAX 
C)  RISKPERCENTILE 
D)  RISKTARGET 
E)  None of these options

Question 19

A @RISK output range allows us to obtain a summary chart that shows the entire simulated range at once.

Accepted Answer

A) True 
 B)False

Question 20

The amount of variability of a financial output caused by different inputs can be investigated using:

Accepted Answer

A)  the NPV function 
B)  a histogram of the NPV 
C)  a tornado chart of NPV 
D)  the value at risk (VAR) 
E)  All of these options 
A)  the NPV function 
B)  a histogram of the NPV 
C)  a tornado chart of NPV 
D)  the value at risk (VAR) 
E)  All of these options

What is the standard deviation of the ending balance? What does the distribution look like now? What should Amanda infer from this?

In warranty cost models,the key input random variable is product lifetime.

A key objective in cash flow models is often to determine the amount of debt that must be taken out to maintain a minimum cash balance.

A marketing simulation model can be used to determine the expected profit under uncertain customer loyalty,and then we can use an optimization model to determine the optimal amount to spend on increasing customer loyalty.

Uncertain timing and the events that follow in process modeling can be modeled using IF statements.

Which of the following is among the questions that financial analysts try to answer with simulation models?

Which of the following distributions is most likely to be used to develop a simulation model for estimating the time until failure of a product in a simulation model?

Bidding for contracts is an example of which of the following types of simulation model application?

In financial simulation models,we are typically more interested in the expected NPV of a project than in the extremes of the outcomes.

Which of the following are not among the marketing applications of simulation?

RISKTARGET is a function that allows us to determine the cumulative probability of a particular value in an output distribution,such as the probability of meeting a due date in manufacturing.

The two random variables we typically simulate as inputs in bidding models are?

The value at risk (VAR)is typically defined as the:

In a warranty cost modeling model,which of the following is a key input random variable?

In marketing and sales models,the primary issue is the uncertain amount of sales that can be obtained,given an assumed timing.

In financial simulation models,the value at risk (VAR)is the 5^th percentile of an output distribution,and it indicates nearly the worst possible outcome.

Which of the following @RISK functions can be used to find the probability of a particular value in an output distribution?

A @RISK output range allows us to obtain a summary chart that shows the entire simulated range at once.

The amount of variability of a financial output caused by different inputs can be investigated using:

Introduction to Data Analysis and Decision Making

Describing the Distribution of a Single Variable

Finding Relationships Among Variables

Probability and Probability Distributions

Normal, Binomial, Poisson, and Exponential Distributions

Decision Making Under Uncertainty

Sampling and Sampling Distributions

Confidence Interval Estimation

Hypothesis Testing

Regression Analysis: Estimating Relationships

Regression Analysis: Statistical Inference

Time Series Analysis and Forecasting

Introduction to Optimization Modeling

Optimization Models

Introduction to Simulation Modeling

Data Mining

Importing Data Into Excel

Analysis of Variance and Experimental Design

Statistical Process Control

Filters

Exam 16: Simulation Models

What is the standard deviation of the ending balance? What does the distribution look like now? What should Amanda infer from this?

In warranty cost models,the key input random variable is product lifetime.

A key objective in cash flow models is often to determine the amount of debt that must be taken out to maintain a minimum cash balance.

A marketing simulation model can be used to determine the expected profit under uncertain customer loyalty,and then we can use an optimization model to determine the optimal amount to spend on increasing customer loyalty.

Uncertain timing and the events that follow in process modeling can be modeled using IF statements.

Which of the following is among the questions that financial analysts try to answer with simulation models?

Which of the following distributions is most likely to be used to develop a simulation model for estimating the time until failure of a product in a simulation model?

Bidding for contracts is an example of which of the following types of simulation model application?

In financial simulation models,we are typically more interested in the expected NPV of a project than in the extremes of the outcomes.

Which of the following are not among the marketing applications of simulation?

RISKTARGET is a function that allows us to determine the cumulative probability of a particular value in an output distribution,such as the probability of meeting a due date in manufacturing.

The two random variables we typically simulate as inputs in bidding models are?

The value at risk (VAR)is typically defined as the:

In a warranty cost modeling model,which of the following is a key input random variable?

In marketing and sales models,the primary issue is the uncertain amount of sales that can be obtained,given an assumed timing.

In financial simulation models,the value at risk (VAR)is the 5th percentile of an output distribution,and it indicates nearly the worst possible outcome.

Which of the following @RISK functions can be used to find the probability of a particular value in an output distribution?

A @RISK output range allows us to obtain a summary chart that shows the entire simulated range at once.

The amount of variability of a financial output caused by different inputs can be investigated using:

Introduction to Data Analysis and Decision Making

Describing the Distribution of a Single Variable

Finding Relationships Among Variables

Probability and Probability Distributions

Normal, Binomial, Poisson, and Exponential Distributions

Decision Making Under Uncertainty

Sampling and Sampling Distributions

Confidence Interval Estimation

Hypothesis Testing

Regression Analysis: Estimating Relationships

Regression Analysis: Statistical Inference

Time Series Analysis and Forecasting

Introduction to Optimization Modeling

Optimization Models

Introduction to Simulation Modeling

Data Mining

Importing Data Into Excel

Analysis of Variance and Experimental Design

Statistical Process Control

Filters

In financial simulation models,the value at risk (VAR)is the 5^th percentile of an output distribution,and it indicates nearly the worst possible outcome.