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#### Business Analytics 2nd Edition by James R -Test Bank

*Business Analytics ***(Evans)**

# Chapter 1 Introduction to Business Analytics

**Â **

- Descriptive analytics:
- can predict risk and find relationships in data not readily apparent with traditional
- helps companies classify their customers into segments to develop specific marketing campaigns.
- helps detect hidden patterns in large quantities of data to group data into sets to predict behavior.
- can use mathematical techniques with optimization to make decisions that take into account the uncertainty in the

Answer: B Diff: 1

Blooms: Remember

Topic: Scope of Business Analytics

LO1: Explain and provide examples of descriptive, predictive, and prescriptive analytics. LO2: Compare and contrast tools for presenting and organizing data

- A manager at Gampco Inc. wishes to know the company’s revenue and profit in its previous quarter. Which of the following business analytics will help the manager?
- prescriptive analytics
- normative analytics
- descriptive analytics
- predictive analytics Answer: C

Diff: 1

Blooms:Â Apply AACSB: Analytic Skills

Topic: Scope of Business Analytics

LO1: Explain and provide examples of descriptive, predictive, and prescriptive analytics. LO2: Describe the major tools and criteria for decision making.

- Predictive analytics:
- summarizes data into meaningful charts and reports that can be standardized or
- identifies the best alternatives to minimize or maximize an
- uses data to determine a course of action to be executed in a given
- detects patterns in historical data and extrapolates them forward in time. Answer: D

Diff: 2

Blooms: Remember

Topic: Scope of Business Analytics

LO1: Explain and provide examples of descriptive, predictive, and prescriptive analytics. LO2: Compare and contrast tools for presenting and organizing data

- A trader who wants to predict short-term movements in stock prices is likely to use
__Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â__- predictive
- descriptive
- normative
- prescriptive Answer: A Diff: 1

Blooms:Â Apply AACSB: Analytic Skills

Topic: Scope of Business Analytics

LO1: Explain and provide examples of descriptive, predictive, and prescriptive analytics. LO2: Describe the major tools and criteria for decision making.

- Which of the following questions will prescriptive analytics help a company address?
- How many and what types of complaints did they resolve?
- What is the best way of shipping goods from their factories to minimize costs?
- What do they expect to pay for fuel over the next several months?
- What will happen if demand falls by 10% or if supplier prices go up 5%? Answer: B

Diff: 2

Blooms: Understand AACSB: Analytic Skills

Topic: Scope of Business Analytics

LO1: Explain and provide examples of descriptive, predictive, and prescriptive analytics. LO2: Describe the major tools and criteria for decision making.

- What is a database?
- a structured collection of related files and data
- simply a collection of data
- a data file holding a single file
- flat files used to store data Answer: A

Diff: 1

Blooms: Remember

Topic: Data for Business Analytics

LO1: Explain the difference between a data set and a database.

LO2: Explain how data are acquired and distinguish among different types of data and levels of measurement

- In a database, information is stored and maintained in
- fields
- measurements
- entities
- attributes Answer: C Diff: 1

Blooms: Remember

Topic: Data for Business Analytics

LO1: Explain the difference between a data set and a database.

LO2: Explain how data are acquired and distinguish among different types of data and levels of measurement

- Which of the following is an example of a measure of continuous metrics?
- four errors revealed in an invoice
- a delivery delayed by seven days
- weight and volume of a sheet of steel
- three incomplete orders on a day Answer: C

Diff: 2

Blooms: Understand

Topic: Data for Business Analytics

LO1: Explain the difference between a discrete metric and continuous metric, and provide examples of each.

LO2: Explain how data are acquired and distinguish among different types of data and levels of measurement

- Nominal data:
- are ranked according to some relationship to one
- have constant differences between observations.
- are continuous and have a natural zero.
- are sorted into categories according to specified characteristics. Answer: D

Diff: 1

Blooms: Remember

Topic: Data for Business Analytics

LO1: Describe the four groups of data classification, categorical, ordinal, interval, and ratio, and provide examples of each.

- Which of the following is a disadvantage of ordinal data?
- They bear no relationship to one
- They have no fixed units of
- They have no natural
- They are not comparable with each other. Answer: B

Diff: 2

Blooms: Understand

Topic: Data for Business Analytics

LO1: Describe the four groups of data classification, categorical, ordinal, interval, and ratio, and provide examples of each.

- Which of the following allow meaningful comparison of ranges, averages and other statistics?
- interval data
- categorical data
- ratio data
- ordinal data Answer: A Diff: 1

Blooms: Remember

Topic: Data for Business Analytics

LO1: Describe the four groups of data classification, categorical, ordinal, interval, and ratio, and provide examples of each.

- Following are the components of a data set containing purchase details of a shoe manufacturing company. Identify the ratio
- Item Number
- Rank of suppliers
- Item cost
- Arrival Date Answer: C Diff: 2

Blooms: Apply

Topic: Data for Business Analytics

- When data are classified by the type of measurement scale, which is the strongest form of measurement?
- nominal
- interval
- ordinal
- ratio Answer: D Diff: 1

Blooms: Remember

Topic: Data for Business Analytics

- The demand for coffee beans over a period of three months has been represented in the form of an L-shaped curve. Which form of model was used here?
- mathematical model
- visual model
- kinesthetic (tactile) model
- verbal model Answer: B Diff: 1

Blooms:Â Apply AACSB: Analytic Skills Topic: Decision Models

LO1: Explain the concept of a model and various ways a model can be characterized. LO2: Compare and contrast tools for presenting and organizing data

- Decision variables:
- cannot be directly controlled by the decision
- are assumed to be
- are always uncertain.
- can be selected at the discretion of the decision maker. Answer: D

Diff: 2

Blooms: Understand Topic: Decision Models

LO1: Define and list the elements of a decision model.

LO2: Describe the major tools and criteria for decision making.

- Identify the uncontrollable variable from the following inputs of a decision
- investment returns
- machine capacities
- staffing levels
- intercity distances Answer: A

Diff: 1

Blooms: Apply

Topic: Decision Models

LO1: Define and list the elements of a decision model.

LO2: Describe the major tools and criteria for decision making.

- Which of the following inputs of a decision model is an example of data?
- estimated consumer demand
- inflation rates
- costs
- investment allocations Answer: C

Diff: 1

Blooms: Remember

Topic: Data for Business Analytics

LO1: Define and list the elements of a decision model.

LO2: Describe the major tools and criteria for decision making.

- Descriptive decision models:
- aim to predict what will happen in the
- describe relationships but do not tell a manager what to
- help analyze the risks associated with various
- do not facilitate evaluation of different decisions. Answer: B

Diff: 2

Blooms: Understand Topic: Decision Models

LO1: Explain the concept of a model and various ways a model can be characterized. LO2: Describe the major tools and criteria for decision making.

- The total cost of reaching consumers (C) depends upon the number of consumers (N), advertising costs (A), and transportation costs (T). The linear cost prediction model is represented as:

*C = c – nN + aA + tT*

where c, n, a, and t are constants and c estimates the total cost when the remaining variables are zero. Which of the following interpretations is true about this model?

- Change in variables N, A, and T will cause n, a, and t to
- As n decreases, c will
- When variables N, A, and T are zero,
*C = c – n + a + t*. - Change in variables N, A, and T will not reflect any changes in c. Answer: D

Diff: 3

Blooms: Apply

Topic: Decision Models

LO1:Â Use influence diagrams to build simple mathematical models. LO2: Compare and contrast methods of summarizing and describing data

- Which of the following is the mathematical model for deriving total cost of only manufacturing?
*TC = VC + (C Ã— Q)**TC = F + (C Ã— Q)**TC = F + C**TC = F + (V Ã— Q)*

Answer: D Diff: 2

Blooms:Â Apply AACSB: Analytic Skills Topic: Decision Models

LO1: Use influence diagrams to build simple mathematical models. LO2: Describe the major tools and criteria for decision making.

- Which of the following is the mathematical model for deriving total cost of only outsourcing?
*TC = Q x C**TC = F + (C x Q)**TC = (V + C) x Q**TC = (VC + F) x Q*

Answer: A Diff: 2

Blooms:Â Apply AACSB: Analytic Skills Topic: Decision Models

LO1: Use influence diagrams to build simple mathematical models. LO2: Describe the major tools and criteria for decision making.

- Which of the following is the mathematical model for deriving the break-even volume?
*Q = (C – VC) + F**Q = F / (C -V)**Q = (V + C) / F**Q = F / (VC – C)*

Answer: B Diff: 2

Blooms:Â Apply AACSB: Analytic Skills Topic: Decision Models

LO1: Use influence diagrams to build simple mathematical models. LO2: Describe the major tools and criteria for decision making.

- When will a company use a predictive decision model?
- when it wishes to determine the best product pricing to maximize revenue
- when it wishes to know how best to use advertising strategies to influence sales
- when it wishes to know sales patterns to plan inventory levels
- when it wishes to ensure that a specified level of customer service is achieved Answer: C

Diff: 2

Blooms: Understand AACSB: Analytic Skills Topic: Decision Models

LO1: Use predictive models to compute model outputs.

LO2: Describe the major tools and criteria for decision making.

- If D is demand, P is the unit price, and c and d are constants (where d > 0 is the price elasticity), which of the following is a nonlinear demand prediction model?
*D = d + (c Ã— P)**D = (d Ã— P)*^{c}*D = c*^{d}Ã— P*D = cP*Answer: D Diff: 2^{-d}

Blooms:Â Apply AACSB: Analytic Skills Topic: Decision Models

LO1: Use predictive models to compute model outputs.

LO2: Describe the major tools and criteria for decision making.

- Which decision model incorporates the uncertainty element?
- predictive
- normative
- prescriptive
- descriptive Answer: A Diff: 1

Blooms: Remember Topic: Decision Models

LO1: Use predictive models to compute model outputs.

LO2: Describe the major tools and criteria for decision making. Use the chart below to answer the following two questions:

(Image available in PDF file So please purchase for download full PDF test bank)

- What is the slope of the sales function
*D = a – bP*?- 4
- 9
- 12
- 17 Answer: C Diff: 3

Blooms: Apply

Topic: Decision Models

- How many gallons will be sold if the price is increased to $4.75? A) 26

- B) 843
- C) 798.72
- D) 818

Answer: B Diff: 3

Blooms:Â Apply AACSB: Analytic Skills Topic: Decision Models

LO1: Use predictive models to compute model outputs.

LO2: Describe the major tools and criteria for decision making.

- Prescriptive decision models help:
- make predictions of how demand is influenced by
- make trade-offs between greater rewards and risks of potential
- decision makers identify the best solution to decision
- describe relationships and influence of various elements in the model. Answer: C

Diff: 1

Blooms: Remember Topic: Decision Models

LO1: Define the terms optimization, objective function, and optimal solution. LO2: Describe the major tools and criteria for decision making.

- The manager at Soul Walk Inc., a shoe manufacturing company, wants to set a new price (P) for a shoe model to maximize total profit. The demand (D) as a function of price is represented as:

*D = 1,500 – 2.5P*

The total cost (C) as a function of demand is represented as:

*C = 3,200 + 3.5D*

Which of the following is a model for total profit as a function of price? A) *(1,508.75Ã— price) – (2.5 Ã— price ^{2}) – 8,450*

- B)
*(3.5 Ã— price*^{2}) + 3,200 – (1925.50 Ã— price) - C)
*(1,250 Ã— price) + (5 Ã— price*^{2}) – 8,320 - D)
*[4521 + (4.5 Ã— price)] Ã— price – 9684.25*

Answer: A Diff: 3

Blooms: Apply

Topic: Decision Models

LO1: Define the terms optimization, objective function, and optimal solution. LO2: Describe the major tools and criteria for decision making.

- Which decision model incorporates the process of optimization?
- predictive
- prescriptive
- descriptive
- normative Answer: B Diff: 1

Blooms: Remember Topic: Decision Models

LO1: Define the terms optimization, objective function, and optimal solution. LO2: Describe the major tools and criteria for decision making.