Quantitative Methods SET 1Solution

Game Time 1, 1
st
Term, 2013-2014
Introductory Concepts, Probabilities. Statistical Quality Control, Decision Analysis, Forecasting

Part I. Objective Portion (Individual - Closed Notes) (30%)

A. Multiple Choice/Fill in the Blanks/True or False. Select the most appropriate answer by
highlighting the corresponding letter; or filling in the proper term called for; or highlighting
True or False for items requiring for such. One (1) point each, total of 20 points.

1. Associated with highest probability among states of nature.
a. EMV c. Rationality
b. EVPI d. Maximum likelihood

2. The purpose of control charts is to distinguish between _natural causes and variations due to
assignable causes.

3. The saddle point is where you find the
a. Mean c. x-chart
b. Value of the game d. Standard deviation

4. A pessimists choice.
a. Maximax c. Maximin
b. Realism d. Equally likely

5. The current conflict between the proponent and opponents of the Divorce Bill can best be resolved
using a zero-sum game approach. TRUE FALSE, use negotiable games

6. Identify which of the following is not a judgmental forecast.
a. Customer survey c. Sales force composite
b. Time series regression d. Jury of executive opinion

7. The coefficient of correlation measures the variation in the dependent variable as explained by the
independent variable. TRUE FALSE, its the coefficient of determination

8. Events are said to be _mutually exclusive_ if only one of the events can occur on any one trial.

9. Provides the general direction of the errors.
a. Bias c. MAD
b. MSE d. MAPE

10. In marginal analysis, the condition of carrying and selling an additional item is the marginal profit.
TRUE FALSE

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Quamet Game 1 (Continued)

11. The following attribute of a good MS/OR solution pertains to the need to consider cost/benefit.
a. Technically appropriate c. Creative
b. Reliable d. Economically viable

12. Which of the following forecast models makes use of a prior forecast together with its error measure?
a. Moving average c. Simple linear regression
b. Sales force composite d. Exponential smoothing

13. In negotiable games, there can only be one winner and one loser. TRUE FALSE, both can win

14. A DM under risk approach where all states of nature are equal: _criterion of rationality_

15. The ANOVA is used in regression analysis to determine the strength of the linear relationships
of variables. TRUE FALSE, its the coefficient of correlation

16. Best employed when there is a series of decisions to be made: __decision trees_.

17. Allows the incorporation of the decision makers risk preference and other subjective factors.
a. Maximum likelihood c. Decision trees
b. Utility theory d. Realism

18. EV with perfect information is less than EV under regret. TRUE FALSE, should be higher than

19. Which probability distribution employs the Bernoulli process? _Binomial distribution__.

20. These are charts which count the number of defects in a sample.
a. p-charts c. x bar-chart
b. c-charts d. R-charts


Note: For true or false items where your answer is false, get 0.5 point each by specifying how to
make the statement true.


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Quamet Game 1 (Continued)

B. For the following items , identify the most likely quantitative method that will be employed in
the following situations. Please be specific in identifying the method. One point five (1.5) points
each, total of 9 points. Additional one (1) point if all answers are correct.


21. Model most likely to be employed in a collective bargaining agreement. _Negotiable game _

22. A decision maker using model under risk, with leftover stocks which can still be sold for an
economic value: __EV with salvage value__

23. A quality control specialist trying to find the probability of an event given the measures of mean
and standard deviation. _Normal distribution___

24. A human resource officer using the attributes of age, gender, IQ and examination score to predict
the performance of job applicants. __Multiple linear regression___

25. A confident investor evaluating three possible areas of new business to start up.
__Maximax___

26. A corporate planner trying to determine the general sales movements during the 12 months of the
year. _Seasonal index__


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