Question 1

The _________ criterion is the alternative associated with the highest payoff in the decision table.

Accepted Answer

A) maximax 
B) minimax regret 
C) equally likely 
D) maximin

Question 2

Based on the decision tree, which of the following choices describes the final decision for Hats- R- Us?

Accepted Answer

A) Do not conduct the survey and choose a small production quantity. 
B) Do not conduct the survey and choose a large production quantity. 
C) Conduct the survey and choose a large production quantity if survey results are positive and choose a small production quantity if survey results are negative. 
D) Conduct the survey and choose a large production quantity regardless of the survey results.

Question 3

Jeff sells the New York Times Sunday newspaper at a city corner near several churches. He sells each newspaper for $6.50 after purchasing them for $4.00. Any unsold newspaper can be returned to the New York Times for a $0.75 credit. Jeff expects demand on Sunday to be 75, 100, 125, or 150 newspapers and would like to order one of these four quantities from the New York Times. If the Jeff uses the maximin criterion, how many newspapers will he order?

Accepted Answer

A) 125 
B) 75 
C) 150 
D) 100

Question 4

Jeff sells the New York Times Sunday newspaper at a city corner near several churches. He sells each newspaper for $6.50 after purchasing them for $4.00. Any unsold newspaper can be returned to the New York Times for a $0.75 credit. Jeff expects demand on Sunday to be 75, 100, 125, or 150 newspapers and would like to order one of these four quantities from the New York Times. If the Jeff uses the minimax regret criterion, how many newspapers will he order?

Accepted Answer

A) 100 
B) 75 
C) 125 
D) 150

Question 5

Positive autocorrelation is present in a time series when we observe a pattern of positive or negative residuals in succession.

Accepted Answer

A) True 
 B)False

Question 6

The exponential smoothing technique works well for generating forecasts from data that have significant trend or seasonal components.

Accepted Answer

A) True 
 B)False

Question 7

The average forecasting error for a time- series technique can be determined through the mean absolute deviation.

Accepted Answer

A) True 
 B)False

Question 8

Residuals describe the difference between the actual and predicted values of independent variables in a regression analysis.

Accepted Answer

A) True 
 B)False

Question 9

The test statistic for the Kruskal- Wallis test follows _______ the probability distribution.

Accepted Answer

A) binomial 
B) chi- square 
C) normal 
D) Student's t

Question 10

If the company decides not to conduct the survey, the probability that demand for the new product will be weak is _______.

Accepted Answer

A) 0.40 
B) 0.80 
C) 0.60 
D) 0.20

Question 11

A __________  component is present in a time series if a consistent pattern in the data can be associated with a calendar.

Accepted Answer

A) random 
B) cyclical 
C) seasonal 
D) trend

Question 12

If the Spearman rank- order correlation coefficient is greater than the critical value for the correlation coefficient when performing a one- tail test of significance, the null hypothesis is rejected.

Accepted Answer

A) True 
 B)False

Question 13

The purpose of Bayes' Theorem is to update prior probabilities based on information provided by posterior probabilities.

Accepted Answer

A) True 
 B)False

Question 14

The primary goal of a seasonal forecasting technique is to remove the random movements in a time series by averaging the historical data.

Accepted Answer

A) True 
 B)False

Exam 16: Forecasting Techniques and Analysis for Time Series Data

The _________ criterion is the alternative associated with the highest payoff in the decision table.

Based on the decision tree, which of the following choices describes the final decision for Hats- R- Us?

Positive autocorrelation is present in a time series when we observe a pattern of positive or negative residuals in succession.

The exponential smoothing technique works well for generating forecasts from data that have significant trend or seasonal components.

The average forecasting error for a time- series technique can be determined through the mean absolute deviation.

Residuals describe the difference between the actual and predicted values of independent variables in a regression analysis.

The test statistic for the Kruskal- Wallis test follows _______ the probability distribution.

If the company decides not to conduct the survey, the probability that demand for the new product will be weak is _______.

A __________ component is present in a time series if a consistent pattern in the data can be associated with a calendar.

If the Spearman rank- order correlation coefficient is greater than the critical value for the correlation coefficient when performing a one- tail test of significance, the null hypothesis is rejected.

The purpose of Bayes' Theorem is to update prior probabilities based on information provided by posterior probabilities.

The primary goal of a seasonal forecasting technique is to remove the random movements in a time series by averaging the historical data.