Chapter 3 Test Materials Flashcards
Statistics provides a _______________ using mathematical tools to conduct research.
a. system b. discipline c. structure d. all the above
All of the above
TRUE or FALSE: Time series analysis compares results over time to identify trends.
True
TRUE or FALSE: Organizations that experience seasonal variations in results (e.g. peak months in retail sales) can smooth the measurement of results by using twelve, 12-month intervals, beginning at one month and measured in consecutive months over a year.
True
TRUE or FALSE: If an organization uses a moving 12 month method of assessing results, as suggested in Question 3 above, it will need data from 24 months.
True
a. Assume Organization A uses a January 1 to December 31 fiscal calendar. A March 31, 2012 statistical analysis of the organization’s first Quarter 2012 results indicates that sales revenue is 10% less than budgeted. It chooses to offset this lower revenue with expense reduction. How many months of 2012 are left to reduce expenses?
a. nine months if they reduce expenses on April 1
b. six months if the wait until July 1 to reduce expenses
c. three months if it takes until October 1 to reduce expenses.
d. Any of the above depending on how fast the organization reacts to the slow sales
d. Any of the above depending on how fast the organization reacts to the slow sales
Suppose Organization A described in Question 5.a. above analyzes sales trends over the past 36 months and a regression trend line reveals that sales throughout 2012 will be 10% less than budgeted. If Organization A’s leaders achieve a 10% reduction in monthly expenses by July 1, what will be the effect of that reduction on annual expenses for 2012?
a. 5% Annual Expense Reduction b. 10% Annual Expense Reduction c. 15% Annual Expense Reduction d. 20% Annual Expense Reduction
a. 5% Annual Expense Reduction
Organization A’s marketing department has just implemented a new online sales strategy. This strategy has been successfully used for years by other organizations in the same industry. A regression analysis incorporating the positive effect of this new online sales strategy on sales revenue develops an R2 value of 0.8222. How confident should Organization A’s leadership be in accepting the revised forecast?
a. Very confident
b. Not very confident
c. Uncertain what to do
a. Very confident
Suppose Organization A’s marketing analysis forecasts that the new online marketing strategy will improve sales so that the 2012 sales revenue will be only 5% below budget instead of 10% below budget. In order for this to be true, how much of an increase in sales revenue will be needed in the last 6 months of the year to offset half of the forecasted 10% budget deficit?
a. 5% for the months of July through December b. 10% for the months of July through December c. 15% for the months of July through December d. 20% for the months of July through December
b. 10% for the months of July through December
Organization A’s leaders accept the possibility that sales revenue can be increased by 10% for the last two quarters of 2012, and they decide to decrease expenses by 10% for the time period of July through December as a precaution. If both of these strategies are effective for the last six months of 2012, will Organization A be able to achieve its original budget?
a. Yes b. No
Yes
If you are an owner of Organization A and you are interested in achieving budgeted revenue and expense goals, would you support leadership action that chooses to correct shortfall in revenue solely by changes in strategic marketing plans?
a. Yes b. No
No
. If you are an owner of Organization A, and your primary interest is in helping the company grow and earn profits, which of the following actions by the organization’s leaders are you most likely to prefer:
a. Choose only the action with the greatest likelihood (probability) of success
b. Choose both online sales strategy and expense reduction since forecasts are still only
estimates of possible results
c.Do both and explore additional sales opportunities
c .Do both and explore additional sales opportunities
The leaders of Organization A choose to adopt the new online sales strategy and they decide to reduce expenses by 10% before October 1, 2012. As a statistician, would you recommend detailed monthly measurement of both actual sales revenue and expenses?
a. Yes
b. No
Yes
Assume Organization A described above has a significant degree of seasonality in its revenue and expenses. Should the leaders also use a moving average of sales and expenses to better understand changes in their annual sales and expenses?
a. Yes
b. No
Yes
Should Organization A have an action plan prepared to further reduce expenses if sales results do not improve as the marketing department forecasts?
a. Yes b. No
Yes
Regression analysis is a tool used to estimate values of one variable based on the values of:
a. another variable b. the independent variable c. values of x d. all the above
All of the above
In simple linear regression analysis the variable that is estimated is known as:
a. the independent variable
b. the dependent variable
c. value of x
d. the slope
b. the dependent variable
TRUE or FALSE: If a study of three independent variables is used to estimate the effect on some other dependent variable, the three independent variables are named x1, x2, and x3.
True
In regression analysis, which of the following symbols represents the independent variable?
a. x b. σ c. μ d. y
x
. In regression analysis, which of the following symbols represents the dependent variable?
a. x b. σ c. μ d. y
y
TRUE or FALSE: The formula used in simple linear regression to estimate values of the dependent variable for two variables (x-bar and y-hat) is: y-hat = b0 + b1 x Y = β0 + β1 X
True
TRUE or FALSE: The formula used in simple linear regression to estimate values of the dependent variable for three x variables ( x1 , x2 , x3) is: y-hat = b0 + b1 x1 + b2 x2 + b3 x3
True
In simple linear regression the symbol b0 for a sample (or β0 for a population) stands for which of the following:
a. the y intercept b. the slope of the regression line c. the sum of the squares d. the correlation coefficient
b. the slope of the regression line
TRUE or FALSE: In order for Excel to create the regression line it needs to calculate the slope and the y intercept.
True
TRUE or FALSE: When illustrating two variables on a scatter diagram, the vertical line represents values of the independent variable, x.
False
