C207 Data-Driven Decision Making Practice Questions - Set 1 - Part 1

Correct Answer: The results would be more accurate

A larger number of samples increases the precision of an ANOVA analysis by reducing the impact of random variations, leading to more accurate results.

Correct Answer: 16%

In a normal distribution, with a mean of 10% and a standard deviation of 10%, the likelihood of losing money (getting a value less than 0%) is 16%.

Correct Answer: Takes information from one dataset and predicts information for another dataset

Regression analysis models the relationship between variables and allows for the prediction of future outcomes based on that relationship.

Correct Answer: Independent, x

The number of cigarettes smoked is the independent variable and is placed on the x-axis, while cholesterol (the outcome) is the dependent variable placed on the y-axis.

Correct Answer: Positive

The positive slope (12) indicates that as the independent variable (x) increases, the dependent variable (y) also increases, demonstrating a positive linear relationship.

Correct Answer: R-squared measures the goodness of fit

R-squared measures how well the data fits the regression model, indicating the proportion of variance in the dependent variable explained by the independent variable(s).

Correct Answer: Trend Analysis

Time series forecasting is a technique used to predict future data points by analyzing the patterns in past data.

Correct Answer: It sorts individual data points into different groups

Cluster analysis groups data points based on their similarities, allowing managers to identify natural groupings within the data.

Correct Answer: A general upward or downward slope over a long period of time

Trends are long-term patterns observed in data, usually spanning a longer time frame, indicating overall increases or decreases.

Correct Answer: Polynomial Regression

Polynomial regression is used when the relationship between the independent and dependent variables is nonlinear, as it can model curved relationships.

Correct Answer: Wait to sell the ticket later

Based on the expected value calculation, waiting to sell has a higher expected payoff ($500 × 0.75 = $375), which is greater than $350.

Correct Answer: The violation of the assumption that variances are constant

Heteroscedasticity occurs when the spread of residuals or errors differs at different levels of the independent variable, violating the assumption of constant variance.

Correct Answer: A model showing the cumulative time decreases with increased production

The Cumulative Average-Time Learning Model shows that the average time per unit decreases at a constant rate as cumulative production increases.

Correct Answer: The variable being predicted or measured

The dependent variable is the outcome being measured or predicted in an experiment or analysis, depending on the independent variable.

Correct Answer: Compare means across multiple groups

ANOVA compares the means of different groups to see if they are significantly different from each other, helping to identify sources of variability.

Correct Answer: A decline in cost per unit as activity increases

The Experience Curve demonstrates how costs decrease as cumulative production experience increases, due to efficiencies gained over time.

Correct Answer: Identify the point at which two options become equally viable

Crossover Analysis determines the point at which two plans or strategies yield the same cost or benefit, helping decision-makers evaluate alternatives.

Correct Answer: Repeated patterns in data that align with business cycles

Cyclicality refers to fluctuations that follow or counteract business cycles, often spanning several years and repeating over time.

Correct Answer: Optimize a function subject to linear constraints

Linear programming is used to optimize an objective function, such as maximizing profits or minimizing costs, subject to a set of linear constraints.

Correct Answer: One independent and one dependent variable

Simple Linear Regression is used when there is a single independent variable and a single dependent variable to examine their linear relationship.