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Chapter: 1 -Problem: 6 >> Consider the five homes in Table 1.1. What do you think you would have to pay for a Ruby model on a treed lot? Transcribed Image Text: A Data Set Describing Five Home Sales OS HomeSales TABLE 1.1 Lot Type Selling Price Home Model Design List Price $494,000 $447,000 $494,000 $494,000 $447,000 $494,00
Answer Preview: 398 000 …

, Chapter: 14 -Problem: 68 >> United Oil is attempting to develop a middle-grade gasoline that will deliver high gasoline mileages. As part of its development process, United Oil will study the effect of three middle-grade gasoline types (A, B, and C) and the amounts 0, 1, 2, and 3 units of additive VST. Mileage tests are run, with the results shown on the page margin. (1) Develop an appropriate model describing these data. (2
Answer Preview: From MegaStat we have Regression Analysis R 0 940 Adjusted R 0 921 n 22 R 0 969 k 5 Std Error 0 711 …

, Chapter: 18 -Problem: 20 >> Carry out a posterior analysis of the investor€™s decision problem. That is, determine the investment choice that should be made and find the expected monetary value of that choice assuming:a. The economist says €œmarket up.€ b. The economist says €œmarket flat.€ c. The economist says €œmarket down.€ An Introduction to Decision Analysis, 2nd ed., Robert T. Clemen presents an example in which an
Answer Preview: a If the economist says market up EMV high risk 1500 8…

, Chapter: 18 -Problem: 24 >> Construct a decision tree for a prior analysis of the control device situation. Then determine whether the engineers should be sent, assuming that the piece of test equipment is not employed to check the device’s alignment. Also find the expected monetary value associated with the best alternative action. A firm designs and manufactures automatic electronic control devices that are installed at cu
Answer Preview: EMV not send 150…

, Chapter: 2 -Problem: 44 >> Explain the purpose behind constructing a contingency table.
Answer Preview: Contingency ta…

, Chapter: 17 -Problem: 22 >> What are the assumptions needed for the validity of the parametric test identified in Exercise 17.21 that are not needed for the Kruskal–Wallis H test? Exercise 17.21Identify the parametric test corresponding to the Kruskal–Wallis H test.
Answer Preview: One way ANOVA req…

, Chapter: 1 -Problem: 10 >> Explain each of the following terms:a. Descriptive statistics.b. Statistical inference.c. Random sample.d. Process.e. Statistical model.
Answer Preview: a Descriptive statistics is the science of describing the important aspects of …

, Chapter: 15 -Problem: 33 >> Which method—method A or method B—gives the smallest MAD? The smallest MSD? The smallest MAPE? Compare two forecasting methods—method A and method B. Suppose that method A gives the point forecasts 57, 61, and 70 of three future time series values. Method B gives the point forecasts 59, 65, and 73 of these three future values. The three future values turn out to be 60, 64, and 67.
Answer Preview: Smallest MAD …

, Chapter: 3 -Problem: 14 >> Compute the mean team operating income and the median team operating income, and explain the difference between the values of these statistics. In the National Basketball Association (NBA) lockout of 2011, the owners of NBA teams wished to change the existing collective bargaining agreement with the NBA Players Association. The owners wanted a €œhard salary cap€ restricting the size of team payro
Answer Preview: The mean Team Operating Income of is …

, Chapter: 17 -Problem: 8 >> Explain the circumstances in which we use the Wilcoxon rank sum test.
Answer Preview: We use the Wilcoxon Rank Sum test …

, Chapter: 1 -Problem: 9 >> (1) Define a population. (2) Give an example of a population that you might study when you start your career after graduating from college. (3) Explain the difference between a census and a sample.
Answer Preview: A population is the set of all elements about which we wis…

, Chapter: 1 -Problem: 26 >> When is cluster sampling used? Why do we describe this type of sampling by using the term cluster?
Answer Preview: Cluster sampling is often used when …

, Chapter: 2 -Problem: 86 >> Figure 2.43 was used in various Chevrolet magazine advertisements in 1997 to compare the overall resale values of Chevrolet, Dodge, and Ford trucks in the years from 1990 to 1997. What is somewhat misleading about this graph?Figure 2.43 Transcribed Image Text: 70% 65% 60% 55% Ford Chevy Dodge
Answer Preview: The graph indicates that …

, Chapter: 2 -Problem: 25 >> Table 2.13 gives America€™s top 40 best small companies of 2014 as rated on the Forbes.com website on January 14, 2015.a. Develop a frequency distribution and a frequency histogram for the sales values. Describe the distribution of these sales values. b. Develop a percent frequency histogram for the sales growth values and then describe this distribution. Distribution The
Answer Preview: a We will use 6 classes since n 40 Note that Max Min Classes 95…

, Chapter: 2 -Problem: 72 >> Construct a percentage bar chart of the overall mechanical quality ratings for each of the following: automobiles of United States origin; automobiles of Pacific Rim origin (Japan/Korea); and automobiles of European origin (Germany/Italy/Great Britain/Sweden). Compare the three distributions in a written report. Based on the data in Table 2.23 (see page 100). This table gives the results of the J.
Answer Preview: The US and Europe have very similar mechanical …

, Chapter: 2 -Problem: 2 >> Explain how to compute the relative frequency and percent frequency for each class if you are given a frequency distribution.
Answer Preview: Relative frequency of any category i…

, Chapter: 2 -Problem: 35 >> If a data set consists of 1,000 measurements, would you summarize the data set by using a stem-and-leaf display or a histogram? Explain.
Answer Preview: With a large data set e g 1 000 meas…

, Chapter: 1 -Problem: 1 >> Define what we mean by a variable, and explain the difference between a quantitative variable and a qualitative (categorical) variable.
Answer Preview: Any characteristic of a population elemen…

, Chapter: 2 -Problem: 34 >> What are the advantages of using a stem-and-leaf display?
Answer Preview: Several advantages of the stem …

, Chapter: 1 -Problem: 16 >> A company that produces and markets trash bags has developed an improved 30-gallon bag. The new bag is produced using a specially formulated plastic that is both stronger and more biodegradable than previously used plastics, and the company wishes to evaluate the strength of this bag.The breaking strength of a trash bag is considered to be the amount (in pounds) of a representative trash mix that
Answer Preview: We estimate that most b…

, Chapter: 2 -Problem: 58 >> When we construct a bar chart or graph, what is the effect of starting the vertical axis at a value that is far above zero? Explain.
Answer Preview: When the vertical axis does not start at …

, Chapter: 3 -Problem: 15 >> The mean team operating income is the operating income each NBA team would receive if the NBAowners divided the total of their operating incomes equally among the 30 NBA teams. (Of course, some of the owners might object to dividing their operating incomes equally among the teams).a. How would the players use the mean team operating income to justify their position opposing a hard salary cap? b. U
Answer Preview: a The players would use the mean Team Operating Income against the idea of a hard salary cap by n…

, Chapter: 1 -Problem: 7 >> Consider the five homes in Table 1.1. What do you think you would have to pay for a Diamond model on a lake lot? For a Ruby model on a lake lot? Transcribed Image Text: A Data Set Describing Five Home Sales OS HomeSales TABLE 1.1 Lot Type Selling Price Home Model Design List Price $494,000 $447,000
Answer Preview: 494 000 for a Di…

, Chapter: 18 -Problem: 2 >> Explain how to use the(a) Maximin criterion,(b) Maximax criterion,(c) Expected monetary value criterion.
Answer Preview: a Under the maximin criterion we choose the alternative …

, Chapter: 2 -Problem: 62 >> Discuss how each of the following is used: gauge, bullet graph, treemap, sparkline.
Answer Preview: 1 A gauge allows us to visualize an organizations key performance …

, Chapter: 14 -Problem: 54 >> What two values does the dependent variable equal in logistic regression? What do these values represent?
Answer Preview: The dependent variable y in logis…

, Chapter: 19 -Problem: 2 >> Explain how we use the SAC and SPAC.
Answer Preview: We look at the SAC and SPAC to …

, Chapter: 2 -Problem: 76 >> Construct a contingency table of automobile origin versus overall design quality rating. Set up rows corresponding to the United States, the Pacific Rim (Japan/Korea), and Europe (Germany/Italy/Great Britain/Sweden), and set up columns corresponding to the ratings €œamong the best€ through €œthe rest.€ Describe any apparent relationship between origin and overall design quality. Based on the dat
Answer Preview: All three regions tend to receive average design rating…

, Chapter: 18 -Problem: 9 >> For the information in the payoff table find a. The expected payoff under certainty. b. The expected value of perfect information, EVPI. The example involves a capacity-planning problem in which a company must choose to build a small, medium, or large production facility. The payoff obtained will depend on whether future demand is low, moderate, or high, and the payoffs are as given in the first t
Answer Preview: a EMV certainty …

, Chapter: 2 -Problem: 63 >> What is data drill down?
Answer Preview: Data drill down is a ver…

, Chapter: 15 -Problem: 9 >> Explain how the multiplicative decomposition model estimates seasonal factors.
Answer Preview: The seasonal factor is estimated …

, Chapter: 1 -Problem: 18 >> Discuss the basic ideas ofa. Anomaly (outlier) detection.b. Association learning.c. Classification.d. Cluster detection.e. Prediction.f. Factor detection.
Answer Preview: a Anomaly outlier detection is a set of tools for finding unusual observations in a dat…

, Chapter: 3 -Problem: 10 >> Compute the mean team revenue and the median team revenue, and explain the difference between the values of these statistics. In the National Basketball Association (NBA) lockout of 2011, the owners of NBA teams wished to change the existing collective bargaining agreement with the NBA Players Association. The owners wanted a €œhard salary cap€ restricting the size of team payrolls. This would al
Answer Preview: The mean Team Revenue is and the …

, Chapter: 1 -Problem: 4 >> Consider a medical study that is being performed to test the effect of smoking on lung cancer. Two groups of subjects are identified; one group has lung cancer and the other one doesn’t. Both are asked to fill out a questionnaire containing questions about their age, sex, occupation, and number of cigarettes smoked per day. (1) What is the response variable? (2) Which are the factors? (3) What typ
Answer Preview: The response variable is whether o…

, Chapter: 1 -Problem: 12 >> In the page margin, we list 15 companies that have historically performed well in the food, drink, and tobacco industries. Consider the random numbers given in the random number table of Table 1.4(a) on page 12. Starting in the upper left corner of Table 1.4(a) and moving down the two leftmost columns, we see that the first three two digit numbers obtained are: 33, 03, and 92. Starting with these
Answer Preview: We would select companies 3 8 9 …

, Chapter: 1 -Problem: 14 >> A bank manager has developed a new system to reduce the time customers spend waiting to be served by tellers during peak business hours. Typical waiting times during peak business hours under the current system are roughly 9 to 10 minutes. The bank manager hopes that the new system will lower typical waiting times to less than 6 minutes and wishes to evaluate the new system. When the new system is
Answer Preview: a 5 47 b We would estimate that the wait times of most …

, Chapter: 1 -Problem: 17 >> Explain each of the following terms:a. Descriptive analytics.b. Predictive analyticsc. Data mining.d. Prescriptive analytics.
Answer Preview: a Descriptive analytics are graphical summaries of data inte…

, Chapter: 2 -Problem: 73 >> Construct a percentage pie chart of the overall design quality ratings for each of the following: automobiles of United States origin; automobiles of Pacific Rim origin (Japan/Korea); and automobiles of European origin (Germany/Italy/Great Britain/Sweden). Compare the three distributions in a written report. Based on the data in Table 2.23 (see page 100). This table gives the results of the J.D. P
Answer Preview: All three regions have a majority of mode…

, Chapter: 1 -Problem: 20 >> Read the approximate predicted waiting times for Soarin€™ and Test Track at 8 p.m. off of the time series plots in Figure 1.9. Construct a hand-drawn bullet graph of these two predicted waiting times.Figure 1.9 Transcribed Image Text: Time Series Plots of Predicted Waiting Times for Soarin' and Test
Answer Preview: Test Tra…

, Chapter: 2 -Problem: 21 >> Recall that Table 1.8 presents the satisfaction ratings for the XYZ-Box video game system that have been given by 65 randomly selected purchasers. Figure 2.15 gives the Excel output of a histogram of these satisfaction ratings.Figure 2.15a. Describe where the satisfaction ratings seem to be concentrated. b. Describe and interpret the shape of the distribution of ratings. c. Write out the eight cla
Answer Preview: a The video game satisfaction ratings are concentrated between 40 and 46 …

, Chapter: 1 -Problem: 5 >> What is a data warehouse? What does the term big data mean?
Answer Preview: A data warehouse is a central repository of an organizat…

, Chapter: 2 -Problem: 82 >> Table 2.24 presents data concerning the largest U.S. charities in 2014 as rated on the Forbes.com website on January 14, 2015.a. Construct a percent frequency histogram of each of(1) The charities€™ private support figures,(2) The charities€™ total revenues,(3) The charities€™ fundraising efficiencies.b. Describe the shape of each histogram.
Answer Preview: a 1 There are 50 charities in the list so we will use 6 classes The maximum private support is 3…

, Chapter: 1 -Problem: 3 >> (1) Discuss the difference between cross-sectional data and time series data.(2) If we record the total number of cars sold in 2015 by each of 10 car salespeople, are the data cross-sectional or time series data?(3) If we record the total number of cars sold by a particular car salesperson in each of the years 2011, 2012, 2013, 2014, and 2015, are the data cross-sectional or time series data?
Answer Preview: 1 Cross sectional data are collected at approximately the same poi…

, Chapter: 2 -Problem: 33 >> Explain the difference between a histogram and a stem-and-leaf display.
Answer Preview: Both the histogram and the ste…

, Chapter: 2 -Problem: 65 >> In the treemap in Figure 2.41, dark blue represents the lowest ozone level and bright red represents the highest ozone level. Where is the ozone level higher, Chicago or New York City? Transcribed Image Text: Treemap of the Population Sizes and Ozone Levels of 52 U.S. Cities (for Exercise 2.65) FIGU
Answer Preview: The ozone level is …

, Chapter: 2 -Problem: 28 >> When we construct a dot plot, what does the horizontal axis represent? What does each dot represent?
Answer Preview: The horizontal axi…

, Chapter: 3 -Problem: 11 >> Construct a histogram and a stem-and-leaf display of the teams€™ player expenses. In the National Basketball Association (NBA) lockout of 2011, the owners of NBA teams wished to change the existing collective bargaining agreement with the NBA Players Association. The owners wanted a €œhard salary cap€ restricting the size of team payrolls. This would allow €œsmaller market teams€ having less rev
Answer Preview: Using a statistical software package with default classes a histogram of T…

, Chapter: 2 -Problem: 71 >> Develop a relative frequency distribution of the overall design quality ratings. Describe the distribution. Based on the data in Table 2.23 (see page 100). This table gives the results of the J.D. Power initial quality study of 2014 automobiles. Each model is rated on overall mechanical quality and overall design quality on a scale from €œamong the best€ to €œthe rest€ (see the Scoring Legend).
Answer Preview: Design Quality Class Midpoint Frequenc…

, Chapter: 1 -Problem: 33 >> According to the website of the American Association for Justice,14 Stella Liebeck of Albuquerque, New Mexico, was severely burned by McDonald€™s coffee in February 1992. Liebeck, who received third-degree burns over 6 percent of her body, was awarded $160,000 in compensatory damages and $480,000 in punitive damages. A postverdict investigation revealed that the coffee temperature at the local Alb
Answer Preview: Basing the limits on the minimum and maximum temperatu…

, Chapter: 2 -Problem: 77 >> Develop a table of row percentages for the contingency table you set up in Exercise 2.76. Using these row percentages, construct a percentage frequency distribution of overall design quality rating for each of the United States, the Pacific Rim, and Europe. Illustrate these three frequency distributions using percentage pie charts and compare the distributions in a written report. Based on the dat
Answer Preview: See the table in 2 76 Same observations as in 2 76 United States Pac…

, Chapter: 4 -Problem: 51 >> A pop quiz consists of three true–false questions and three multiple choice questions. Each multiple choice question has five possible answers. If a student blindly guesses the answer to every question, what is the probability that the student will correctly answer all six questions?
Answer Preview: Total number of …

, Chapter: 14 -Problem: 39 >> How do we model the interaction between two independent variables?
Answer Preview: The interaction betw…

, Chapter: 3 -Problem: 58 >> Explain how hierarchical clustering and k-means clustering differ with respect to reassigning an item to a different cluster.
Answer Preview: In hierarchical clustering find the average distance between e…

, Chapter: 5 -Problem: 45 >> Explain the meaning of a positive covariance.
Answer Preview: A positive covariance mean…

, Chapter: 7 -Problem: 2 >> What does the Central Limit Theorem tell us about the sampling distribution of the sample mean? Distribution The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Answer Preview: If the sample size n …

, Chapter: 13 -Problem: 42 >> How do we check the normality assumption?
Answer Preview: We check the sha…

, Chapter: 3 -Problem: 46 >> The following is a frequency distribution summarizing earnings per share (EPS) growth data for the 30 fastest growing firms as given on Fortune magazine’s website on January 14, 2015.EPS Growth (Percent) .............Frequency 37,87..............................................15 87,137..............................................7 137,187............................................6 187,237.....
Answer Preview: a Approximate population mean b Approximate EPS Growth 37 87 …

, Chapter: 3 -Problem: 49 >> If we know the initial value of an investment and its geometric mean return over a period of years, can we compute the ending value of the investment? If so, how?
Answer Preview: If we know the initial investment and …

, Chapter: 3 -Problem: 68 >> In the previous XLMiner output, show how the lift ratio of 1.1111(rounded) for the recommendation of C to renters of B has been calculated. Interpret this lift ratio.
Answer Preview: The lift ratio confidence percentage of …

, Chapter: 6 -Problem: 37 >> Under what condition may we use the normal approximation to the binomial distribution?
Answer Preview: We may use the normal distr…

, Chapter: 14 -Problem: 29 >> Consider a hospital for which XRay = 56,194, BedDays = 14,077.88, and LengthStay = 6.89. A 95 percent prediction interval for the labor hours corresponding to this combination of values of the independent variables is given in the following MegaStat output:Find and report the prediction interval on the output. Then, use this interval to determine if the actual number of labor hours used by the hos
Answer Preview: y 17207 31 is above t…

, Chapter: 11 -Problem: 12 >> In your own words, explain why we sometimes employ the randomized block design.
Answer Preview: We would use the randomized bloc…

, Chapter: 8 -Problem: 14 >> Discuss when it is appropriate to use the t-based confidence interval for ?.
Answer Preview: We use the t distribution whens is unknow…

, Chapter: 13 -Problem: 14 >> What is estimated by the mean square error, and what is estimated by the standard error?
Answer Preview: MSE estimates 2 the var…

, Chapter: 3 -Problem: 69 >> The XLMiner output of an association rule analysis of the DVD renters data using a specified support percentage of 40 percent and a specified confidence percentage of 70 percent is shown below.a. Summarize the recommendations based on a lift ratio greater than 1. b. Consider the recommendation of DVD B based on having rented C & E. (1) Identify and interpret the support for C & E. Do the same for
Answer Preview: a Using the criteria that i The support percentage for both the antecedent and the co…

, Chapter: 6 -Problem: 2 >> How do we use the continuous probability distribution (or probability curve) of a random variable x to find probabilities? Explain. Distribution The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are
Answer Preview: Probabilities …

, Chapter: 9 -Problem: 49 >> What assumption must hold to make statistical inferences about a population variance?
Answer Preview: In order to use the distri…

, Chapter: 5 -Problem: 19 >> Suppose that x is a binomial random variable. Explain what the values of x represent. That is, how are the values of x defined?
Answer Preview: Values of x ar…

, Chapter: 12 -Problem: 15 >> What is the purpose behind summarizing data in the form of a two-way contingency table?
Answer Preview: We summarize data in …

, Chapter: 6 -Problem: 47 >> Explain the relationship between the Poisson and exponential distributions.
Answer Preview: If the number of events occurring per uni…

, Chapter: 10 -Problem: 13 >> Explain how a paired difference experiment differs from an independent samples experiment in terms of how the data for these experiments are collected.
Answer Preview: The data for an independent samples experiment i…

, Chapter: 11 -Problem: 2 >> Explain the assumptions that must be satisfied in order to validly use the one-way ANOVA formulas.
Answer Preview: In order for the one way ANOVA formulas to be valid …

, Chapter: 13 -Problem: 54 >> When developing a regression model to predict a dependent variable y, it is best, if there are enough data, to €œbuild€ the model using one data set (called the training data set) and then €œvalidate€ the model by using it to analyze a different data set (called the validation data set). To illustrate this, Kutner, Nachtsheim, Neter, and Li (2005) consider 108 observations described by the depen
Answer Preview: 1 y versus x 1 x …

, Chapter: 3 -Problem: 40 >> Consider calculating a student’s grade point average using a scale where 4.0 represents an A and 0.0 represents an F. Explain why the grade point average is a weighted mean. What are the xi values? What are the weights?
Answer Preview: Grades are weighted by credit hours Th…

, Chapter: 4 -Problem: 67 >> What proportion of the U.S. residents who believed that the amount of violent programming had increased, believed that the overall quality of programming had decreased?
Answer Preview: P Quality d…

, Chapter: 3 -Problem: 65 >> Table 3.14 shows the output of a factor analysis of the ratings of 82 respondents who were asked to evaluate a particular discount store on 29 attributes using a 7-point Likert scale. Interpret and give names to the five factors. Transcribed Image Text: TABLE 3.14 Factor Analysis of the Discount Sto
Answer Preview: Factor 1 Quality of the staff …

, Chapter: 3 -Problem: 71 >> Figure 3.37 gives five-number summaries comparing the base yearly salaries of employees in marketing and employees in research for a large company. Interpret these summaries. Transcribed Image Text: FIGURE 3.37 Five-Number Summaries Comparing Base Salaries in Marketing and Base Salaries in Research
Answer Preview: The median marketing base salary is h…

, Chapter: 10 -Problem: 15 >> Suppose a company wishes to compare the hourly output of its employees before and after vacations. Explain how you would collect data for a paired difference experiment to make this comparison.
Answer Preview: To collect data for a paired differ…

, Chapter: 4 -Problem: 64 >> What proportion of the 1,000 U.S. residents believed that the overall quality of programming had decreased over the past 10 years?
Answer Preview: P Qual…

, Chapter: 4 -Problem: 48 >> A credit union has two branches; each branch has two departments, and each department has four employees. How many total people does the credit union employ? If you work for the credit union, and one employee is randomly selected to go to a convention, what is the probability that you will be chosen?
Answer Preview: Number of emp…

, Chapter: 9 -Problem: 35 >> What condition must be satisfied in order for the methods of this section to be appropriate?
Answer Preview: In order to use the normal table when t…

, Chapter: 11 -Problem: 19 >> What is a treatment in the context of a two-factor factorial experiment?
Answer Preview: A treatment in a two f…

, Chapter: 8 -Problem: 2 >> Explain the meaning of the term “95 percent confidence.”
Answer Preview: 95 of all possible samp…

, Chapter: 6 -Problem: 1 >> A discrete probability distribution assigns probabilities to individual values. To what are probabilities assigned by a continuous probability distribution? Distribution The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement
Answer Preview: For continuous probabi…

, Chapter: 4 -Problem: 45 >> Explain why counting rules are useful.
Answer Preview: Counting rules are help…

, Chapter: 9 -Problem: 9 >> Explain what a p-value is, and explain how it is used to test a hypothesis.
Answer Preview: A p value is the probability computed assuming that the null …

, Chapter: 3 -Problem: 41 >> When we perform grouped data calculations, we represent the measurements in a class by using the midpoint of the class. Explain the assumption that is being made when we do this.
Answer Preview: Since one value must be chosen to be a …

, Chapter: 3 -Problem: 66 >> What is the purpose of association rules?
Answer Preview: Association rules a…

, Chapter: 13 -Problem: 34 >> Use the sales volume data in Figure 3.22(a) to find (1) A point estimate of and a 95 percent confidence interval for the mean sales volume in all sales regions when advertising expenditure is 10 (that is, $100,000).(2) A point prediction of and a 95 percent prediction interval for the sales volume in an individual sales region when advertising expenditure is 10.Figure 3.22(a)
Answer Preview: 1 Point estimate y 66 2121 4 4303 10 110 5151 distance 9…

, Chapter: 13 -Problem: 35 >> Use the real estate sales price data in Table 13.7 to find(1) A point estimate of and a 95 percent confidence interval for the mean sales price of all houses having a size of 20 (that is, 2,000 square feet).(2) A point prediction of and a 95 percent prediction interval for the sales price of a single house having a size of 20.Table 13.7y ....................x 180..............23 98.1.............1
Answer Preview: 1 Point estimate y 48 0244 5 7003 20 162 0304 distance 95 …

, Chapter: 3 -Problem: 48 >> In words, explain the interpretation of the geometric mean return for an investment.
Answer Preview: The geometric mean return for a…

, Chapter: 3 -Problem: 59 >> Explain what complete linkage means.
Answer Preview: In k means clustering we begin by setting k the desired number of clusters and random…

, Chapter: 5 -Problem: 5 >> What conditions must be satisfied by the probabilities in a discrete probability distribution? Explain what these conditions mean.
Answer Preview: The probabilities in a discrete …

, Chapter: 4 -Problem: 63 >> What proportion of the 1,000 U.S. residents believed that the amount of violent programming had increased over the past 10 years?
Answer Preview: P Viole…

, Chapter: 4 -Problem: 69 >> What sort of dependence seems to exist between whether U.S. residents believed that the amount of violent programming had increased and whether U.S. residents believed that the overall quality of programming had decreased? Explain your answer.
Answer Preview: The events are dependent Those who believe t…

, Chapter: 3 -Problem: 53 >> Refer to Exercise 3.52. The values of the DJIA on the first day of trading in 2005, 2006, 2007, 2008, and 2009 were 10,729.43, 10,847.41, 12,474.52, 13,043.96, and 9,034.69.a. Calculate the geometric mean rate of return for the DJIA from 2005 to 2013. b. If an investment of $100,000 is made in 2005 and the portfolio performs with returns equal to those of the DJIA, what is the investment worth in
Answer Preview: a R 1 1 100 R 2 15 000 …

, Chapter: 14 -Problem: 38 >> When does a scatter plot suggest the use of the quadratic regression model?
Answer Preview: A scatter plot of y versus x sug…

, Chapter: 11 -Problem: 14 >> How can we test to determine if the blocks we have chosen are reasonable?
Answer Preview: Use the F test for block …

, Chapter: 8 -Problem: 4 >> For a fixed sample size, what happens to a confidence interval for ? when we increase the level of confidence?
Answer Preview: The confidence …

, Chapter: 7 -Problem: 15 >> If the sample size n is large, the sampling distribution of p? is approximately a normal distribution. What condition must be satisfied to guarantee that n is large enough to say that p? is approximately normally distributed? Distribution The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, accou
Answer Preview: In order for us to say that the …

, Chapter: 14 -Problem: 30 >> What is a qualitative independent variable?
Answer Preview: A qualitative in…

, Chapter: 3 -Problem: 61 >> In order to carry out a k-means cluster analysis, we can use Minitab, JMP, or XLMiner. For example, consider using XLMiner to carry out a k-means cluster analysis of the sports perception data in Table 3.9, where we (somewhat arbitrarily) choose to use k = 5 clusters. In this case, the XLMiner output shown on page 192 gives the final members of the five clusters, the centroids of each cluster (tha
Answer Preview: a Cluster 1 Baseball Cluster 2 Golf Bowling Cluster 3 Sw…

, Chapter: 7 -Problem: 17 >> Describe the effect of increasing the sample size on the population of all possible sample proportions.
Answer Preview: Increasing the …

, Chapter: 6 -Problem: 36 >> Explain why it might be convenient to approximate binomial probabilities by using areas under an appropriate normal curve.
Answer Preview: Binomial tables are often una…

, Chapter: 12 -Problem: 12 >> Consider the sample of 60 bottle design ratings given in Table 1.6. Use these data to carry out a chi-square goodness-of-fit test to determine whether the population of all bottle design ratings is normally distributed. Use α = .05, and note that x̅ = 30.35 and s = 3.1073 for the 60 bottle design ratings. Transcribed Im
Answer Preview: H 0 the bottle ratings are normally distributed H a the bottle ratings are not normally distributed …

, Chapter: 5 -Problem: 20 >> Explain the logic behind the rare event approach to making statistical inferences.
Answer Preview: If the chance of an events occurrence i…

, Chapter: 11 -Problem: 30 >> In an article in the Accounting Review, Brown and Solomon study the effects of two factors€”confirmation of accounts receivable and verification of sales transactions€”on account misstatement risk by auditors. Both factors had two levels€”completed or not completed€”and a line plot of the treatment mean misstatement risks is shown in Figure 11.16. This line plot makes it appear that interaction ex
Answer Preview: The risk of misstatement assoc…

, Chapter: 14 -Problem: 10 >> What is the purpose of the overall F test?
Answer Preview: The purpose of the overall F …

, Chapter: 14 -Problem: 9 >> What is estimated by the mean square error, and what is estimated by the standard error?
Answer Preview: The mean square errors estimates the …

, Chapter: 3 -Problem: 54 >> What is the difference between a classification tree and a regression tree?
Answer Preview: A classification tree is used to …

, Chapter: 4 -Problem: 68 >> What proportion of the U.S. residents who believed that the overall quality of programming had decreased, believed that the amount of violent programming had increased?
Answer Preview: P Violence …

, Chapter: 6 -Problem: 17 >> Explain how to compute the z value corresponding to a value of a normally distributed random variable. What does the z value tell us about the value of the random variable?
Answer Preview: To find the z value corresponding to x …

, Chapter: 3 -Problem: 60 >> In this exercise we consider a marketing research study concerning the similarities and differences between the 10 types of food shown in Table 3.11. Each type of food was given an integer rating of 1 to 7 by 50 randomly selected restaurant-goers on three scales: bland (1) versus spicy (7), light (1) versus heavy (7), and low calories (1) versus high calories (7). Table 3.11 gives the average valu
Answer Preview: a The food types above Axis I are all Asian cuisines while those below Axis I are all Western cu…

, Chapter: 12 -Problem: 4 >> When performing a chi-square goodness-of-fit test, explain why a large value of the chi-square statistic provides evidence that H0 should be rejected.
Answer Preview: The larger the the more the observed frequen…

, Chapter: 9 -Problem: 34 >> If we wish to test a hypothesis to provide evidence supporting the claim that fewer than 5 percent of the units produced by a process are defective, formulate the null and alternative hypotheses.
Answer Preview: H 0 p 0 05 vers…

, Chapter: 3 -Problem: 20 >> Table 3.3 gives spending data for the football programs at the 10 universities that spent the most money on football in 2012. Calculate the population range, variance, and standard deviation of the 10 total football spending figures. Do the same for the 10 spending per scholarship player figures. Transcribed Image Text:
Answer Preview: Total spending Range Max Min 37 77 23 25 14 52 mil x x x 2 34 36 6 7…

, Chapter: 4 -Problem: 47 >> Explain when it is appropriate to use the counting rule for combinations.
Answer Preview: The counting rule …

, Chapter: 5 -Problem: 1 >> Explain the concept of a random variable.
Answer Preview: A random variable is …

, Chapter: 14 -Problem: 42 >> Use Excel, MegaStat, or Minitab to perform a regression analysis of the Bonner Frozen Foods sales volume data in Table 14.5 on page 599 by using the model y = β0+ β1x1+ β2x2+ β3x1x2+ ε.Table 14.5a Determine if the interaction term x1x2 is important in the model. b Find (1) a point estimate of and a 95 percent confidence interval for the mean sales volume in all sales regions when $2,000 is sp
Answer Preview: 1 The interaction term is important its ass…

, Chapter: 4 -Problem: 52 >> A company employs eight people and plans to select a group of three of these employees to receive advanced training. How many ways can the group of three employees be selected?
Answer Preview: The number of ways …

, Chapter: 5 -Problem: 44 >> Explain the meaning of a negative covariance.
Answer Preview: A negative covariance mean…

, Chapter: 5 -Problem: 37 >> In the context of the hypergeometric distribution, explain the meanings of N, r, and n.
Answer Preview: In the hypergeometric distribution N …

, Chapter: 10 -Problem: 14 >> Why is a paired difference experiment sometimes more informative than an independent samples experiment? Give an example of a situation in which a paired difference experiment might be advantageous.
Answer Preview: A paired difference experiment is sometimes m…

, Chapter: 3 -Problem: 21 >> Consider Exercise 3.20.a. Compute and interpret the z€“score for each total spending figure. b. Compute and interpret the z€“score for each spending per scholarship player figure. Transcribed Image Text: Football Spending Data for 2012's Top 10 College Football Spenders (for Exercises 3.20 and 3.21)
Answer Preview: a Total spending 27 599 5 1075 round this to 5 108 x x z x Interpretation 34 36 6 761 1 324 x is 1 3…

, Chapter: 4 -Problem: 35 >> Explain the purpose behind using Bayes’ theorem.
Answer Preview: We use Bayes …

, Chapter: 3 -Problem: 52 >> The following table gives the value of the Dow Jones Industrial Average (DJIA), NASDAQ, and the S&P 500 on the first day of trading for the years 2010 through 2013.a. For each stock index, compute the rate of return from 2010 to 2011, from 2011 to 2012, and from 2012 to 2013. b. Calculate the geometric mean rate of return for each stock index for the period from 2010 to 2013. c. Suppose that an in
Answer Preview: a Year DJIA NASDAQ S P 500 2010 10 583 96 2308 42 1132 99 2011 11 670 75 2691 5…

, Chapter: 5 -Problem: 4 >> What is a discrete probability distribution? Explain in your own words.
Answer Preview: The probability distribution of a discr…

, Chapter: 3 -Problem: 63 >> Why does factor analysis do factor rotation?
Answer Preview: Factor rotation yields final factors w…

, Chapter: 3 -Problem: 73 >> Table 3.19 on the next page gives data concerning America€™s 30 largest private companies of 2014 as rated by Forbes magazine. a. Construct a box-and-whiskers display of the large company revenues. b. Construct a box-and-whiskers display of the large company numbers of employees. c. Interpret the displays of parts a and b.
Answer Preview: a The following plots were constructed in MegaStat b c The distribution of re…

, Chapter: 3 -Problem: 67 >> Discuss the meanings of the terms support percentage, confidence percentage, and lift ratio.
Answer Preview: The support percentage is the percentage of times an item or group of it…

, Chapter: 12 -Problem: 13 >> Consider the sample of 100 waiting times given in Table 1.9. Use these data to carry out a chi-square goodness-of-fit test to determine whether the population of all waiting times is normally distributed. Use α = .10, and note that xÌ…  5.46 and s = 2.475 for the 100 waiting times. Transcribed Image Text:
Answer Preview: H 0 waiting times are normally distributed H a waiting times are not norm…

, Chapter: 4 -Problem: 66 >> What proportion of the 1,000 U.S. residents believed that either the amount of violent programming had increased or the overall quality of programming had decreased over the past 10 years?
Answer Preview: P Violence i…

, Chapter: 3 -Problem: 62 >> What is the purpose of factor analysis?
Answer Preview: Factor analysis is intended to reduce a l…

, Chapter: 3 -Problem: 64 >> In Applied Multivariate Techniques (John Wiley and Sons, 1996), Subhash Sharma considers a study in which 143 respondents rated three brands of laundry detergents on 12 product attributes using a 5-point Likert scale. The 12 product attributes are:V1: Gentle to natural fabricsV2: Won€™t harm colorsV3: Won€™t harm syntheticsV4: Safe for lingerieV5: Strong, powerfulV6: Gets dirt outV7: Makes colors
Answer Preview: Only the first two factors have eigenvalues or variances above 1 the …

, Chapter: 13 -Problem: 36 >> Explain what is meant by the population correlation coefficient ?.
Answer Preview: The population correlation co…

, Chapter: 15 -Problem: 16 >> Compute an approximate 95 percent prediction interval forecast of tractor sales for each of the quarters next year. Use the fact that the half-lengths of 95 percent prediction intervals for the deseasonalized sales values in the four quarters of next year are, respectively, 14, 14.4, 14.6, and 15. International Machinery, Inc., produces a tractor and wishes to use quarterly tractor sales data obse
Answer Preview: 95 Prediction Intervals Quarte…

, Chapter: 4 -Problem: 65 >> What proportion of the 1,000 U.S. residents believed that both the amount of violent programming had increased and the overall quality of programming had decreased over the past 10 years?
Answer Preview: P Violence…

, Chapter: 18 -Problem: 34 >> In the book Production/Operations Management, William J. Stevenson presents a decision tree concerning a firm€™s decision about the size of a production facility. This decision tree is given in Figure 18.9 (payoffs are given in millions of dollars). Use the decision tree to determine which alternative (build small or build large) should be chosen in order to maximize the expected monetary payoff.
Answer Preview: The firm should …

, Chapter: 3 -Problem: 35 >> On its website, the Statesman Journal newspaper (Salem, Oregon, 2005) reports mortgage loan interest rates for 30 year and 15-year fixed-rate mortgage loans for a number of Willamette Valley lending institutions. Of interest is whether there is any systematic difference between 30 year rates and 15-year rates (expressed as annual percentage rate or APR). The table below displays the 30 year rate a
Answer Preview: The top 75 of the 30 …

, Chapter: 15 -Problem: 29 >> Consider the monthly international passenger totals in Table 15.8 on page 690. Use Minitab and Winters€™ method in month 132 to find point predictions of and 95 percent prediction intervals for the monthly international passenger totals in months 133 through 144. Set each of the smoothing constants alpha, gamma, and delta equal to .2.
Answer Preview: Results of using Minitab to fit a multiplicative Winters model to airline pas…

, Chapter: 6 -Problem: 55 >> If a normal probability plot has the appearance of a straight line, what should we conclude?
Answer Preview: That the da…

, Chapter: 16 -Problem: 15 >> Write a short paragraph explaining why a process that is in statistical control is not necessarily capable of meeting customer requirements (specifications).
Answer Preview: When a process is in statistical cont…

, Chapter: 3 -Problem: 43 >> Sound City sells the TrueSound-XL, a top-of-the-line satellite car radio. Over the last 100 weeks, Sound City has sold no radios in three of the weeks, one radio in 20 of the weeks, two radios in 50 of the weeks, three radios in 20 of the weeks, four radios in 5 of the weeks, and five radios in 2 of the weeks. The following table summarizes this information.Number of Number of Weeks...............
Answer Preview: 3 0 20 …

, Chapter: 18 -Problem: 3 >> Explain how to find the expected value of perfect information.
Answer Preview: The expected value of perfect information is the difference …

, Chapter: 4 -Problem: 46 >> Explain when it is appropriate to use the counting rule for multiple-step experiments.
Answer Preview: Counting rules are useful for mul…

, Chapter: 17 -Problem: 3 >> Consider the following sample of five chemical yields:a. Use this sample to test H0: Md = 800 versus Ha: Md ‰  800 by setting α = .01. b. Use this sample to test H0: Md = 750 versus Ha: Md > 750 by setting α = .05. Transcribed Image Text: 801 814 784 836 820
Answer Preview: a S 4 p value 2P x 4 …

, Chapter: 4 -Problem: 2 >> Explain the properties that must be satisfied by a probability.
Answer Preview: 1 The probability of a sam…

, Chapter: 15 -Problem: 31 >> Why does the MSD penalize a forecasting method much more for large forecast errors than for small forecast errors?
Answer Preview: A squared forecast error is especially large when the error itse…

, Chapter: 6 -Problem: 3 >> What two properties must be satisfied by a continuous probability distribution (or probability curve)? Distribution The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Answer Preview: 1 f x 0 for all …

, Chapter: 15 -Problem: 23 >> When do we use double exponential smoothing?
Answer Preview: We use double expone…

, Chapter: 15 -Problem: 19 >> What is the purpose of a smoothing constant in exponential smoothing?
Answer Preview: It determines the weights at…

, Chapter: 16 -Problem: 6 >> Explain why the initial control limits calculated for a set of subgrouped data are called “trial control limits.”
Answer Preview: They are called trial control limits …

, Chapter: 15 -Problem: 30 >> What is the MAD? What is the MSD? What is the MAPE? How do we use these quantities?
Answer Preview: MAD mean absolute deviation or mean of all value…

, Chapter: 15 -Problem: 24 >> When do we use the multiplicative Winters’ method?
Answer Preview: We use the multiplicativ…

, Chapter: 14 -Problem: 45 >> List the criteria and model selection procedures we use to compare regression models.
Answer Preview: We can compare regression models by us…

, Chapter: 18 -Problem: 6 >> Given the payoff table, find the alternative that would be chosen using the maximax criterion. The example involves a capacity-planning problem in which a company must choose to build a small, medium, or large production facility. The payoff obtained will depend on whether future demand is low, moderate, or high, and the payoffs are as given in the first table.
Answer Preview: Using the maximin criterion we would …

, Chapter: 15 -Problem: 35 >> Explain the difference between a Laspeyres index and a Paasche index.
Answer Preview: A Laspeyres Index computes …

, Chapter: 8 -Problem: 5 >> For a fixed level of confidence, what happens to a confidence interval for ? when we increase the sample size?
Answer Preview: The confidence …

, Chapter: 16 -Problem: 20 >> Suppose that x? and R charts based on subgroups of size 3 are used to monitor the moisture content of a type of paper. The x? and R charts are found to be in statistical control with x?? = 6.0 percent and R? = .4 percent. Further, a histogram of the individual moisture content readings suggests that these measurements are approximately normally distributed. a. Compute the natural tolerance limits
Answer Preview: a b No the natural toler…

, Chapter: 8 -Problem: 49 >> Define a population total. Give an example of a population total that a business might estimate.
Answer Preview: The population t…

, Chapter: 18 -Problem: 21 >> Carry out a preposterior analysis of the investor€™s decision problem by finding:a. The expected monetary value associated with consulting the economist; that is, find the EPS. b. The expected monetary value associated with not consulting the economist; that is, find the EPNS. c. The expected value of sample information, EVSI. d. The maximum amount the investor should be willing to pay for the eco
Answer Preview: a EPS 485 1163 92 3 500 215 …

, Chapter: 14 -Problem: 27 >> Use the Bonner Frozen Foods sales volume data in Table 14.5 on page 599 and the model y = ?0 + ?1x1 + ?2x2 + ? to find(1) A point estimate of and a 95 percent confidence interval for the mean sales volume in all sales regions when $2,000 is spent on radio and television advertising and $5,000 is spent on print advertising.(2) A point prediction of and a 95 percent prediction interval for the sales
Answer Preview: 1 y 19 1012 95 confiden…

, Chapter: 17 -Problem: 27 >> Explain the circumstances in which we use Spearman’s rank correlation coefficient.
Answer Preview: We use Spearmans rank correlation coeffici…

, Chapter: 7 -Problem: 1 >> The sampling distribution of the sample mean x? is the probability distribution of a population. Describe this population. Distribution The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among th
Answer Preview: This population consists of al…

, Chapter: 4 -Problem: 34 >> What is a prior probability? What is a posterior probability?
Answer Preview: A prior probability is the init…

, Chapter: 13 -Problem: 8 >> What does the simple coefficient of determination measure?
Answer Preview: It measures the …

, Chapter: 18 -Problem: 16 >> Identify and list each of the following for the investor€™s decision problem: a. The investor€™s alternative actions. b. The states of nature. c. The possible results of sampling (that is, of information gathering). An Introduction to Decision Analysis, 2nd ed., Robert T. Clemen presents an example in which an investor wishes to choose between investing money in (1) a high-risk stock, (2) a low-ri
Answer Preview: a Alternatives Invest in savings accou…

, Chapter: 3 -Problem: 37 >> Discuss how the least squares line is used to predict y on the basis of x.
Answer Preview: Once the least squares eq…

, Chapter: 18 -Problem: 22 >> Identify and list each of the following for the control device situation: a. The firm’s alternative actions. b. The states of nature. c. The possible results of sampling (that is, of information gathering). A firm designs and manufactures automatic electronic control devices that are installed at customers’ plant sites. The control devices are shipped by truck to customers’ sites; while in transit
Answer Preview: a Alternative actions send engine…

, Chapter: 7 -Problem: 14 >> The sampling distribution of p? is the probability distribution of a population. Describe this population. Distribution The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Answer Preview: This population consists …

, Chapter: 16 -Problem: 26 >> In your own words, define a nonconforming unit.
Answer Preview: A nonconformi…

, Chapter: 16 -Problem: 37 >> In an issue of Quality Progress, Hoexter and Julien discuss the quality of the services delivered by law firms. One aspect of such service is the quality of attorney€“client communication. Hoexter and Julien present a cause-and-effect diagram for €œpoor client€“attorney telephone communications.€ This diagram is shown in Figure 16.28. a. Using this diagram, what (in your opinion) are the most imp
Answer Preview: a Opinions will vary but if a lawyer doe…

, Chapter: 18 -Problem: 33 >> In the book Making Hard Decisions: An Introduction to Decision Analysis, Robert T. Clemen presents a decision tree for a research and development decision (note that payoffs are given in millions of dollars, which is denoted by M). Based on this decision tree (shown in Figure 18.8), answer the following: a. Should development of the research project be continued or stopped? Justify your answer by
Answer Preview: a The research project should cont…

, Chapter: 18 -Problem: 25 >> Set up probability revision tables to: a. Find the probability that the test equipment “reads in,” and find the posterior probabilities of in alignment and out of alignment given that the test equipment “reads in.” b. Find the probability that the test equipment “reads out,” and find the posterior probabilities of in alignment and out of alignment given that the test equipment “reads out.” A firm
Answer Preview: a P device reads in 9 8 1 1 730 Posterior Probabilities P in alignment devi…

, Chapter: 18 -Problem: 13 >> Figure 18.3 gives a decision tree presented in the book Production/Operations Management by William J. Stevenson. Use this tree diagram to do the following: a. Find the expected monetary value for each of the alternatives (subcontract, expand, and build). b. Determine the alternative that should be selected in order to maximize the expected monetary value.
Answer Preview: a Expected monetary value for su…

, Chapter: 15 -Problem: 12 >> Find and identify the four seasonal factors for quarters 1, 2, 3, and 4. International Machinery, Inc., produces a tractor and wishes to use quarterly tractor sales data observed in the last four years to predict quarterly tractor sales next year. The following MegaStat output gives the tractor sales data and the estimates of the seasonal factors and trend line for the data:
Answer Preview: The seasonal factor…

, Chapter: 18 -Problem: 18 >> Carry out a prior analysis of the investor€™s decision problem. That is, determine the investment choice that should be made and find the expected monetary value of that choice assuming that the investor does notconsult the economist about future stock market behavior. An Introduction to Decision Analysis, 2nd ed., Robert T. Clemen presents an example in which an investor wishes to choose between
Answer Preview: EMV for high risk 1500 5 100 3 10…

, Chapter: 16 -Problem: 5 >> Explain (1) the purpose of an x? chart, (2) the purpose of an R chart, (3) why both charts are needed.
Answer Preview: An x chart monitors the process level while an R chart monit…

, Chapter: 18 -Problem: 7 >> Suppose that the company assigns prior probabilities of .3, .5, and .2 to low, moderate, and high demands, respectively.a. Find the expected monetary value for each alternative (small, medium, and large).b. What is the best alternative if we use the expected monetary value criterion? The example involves a capacity-planning problem in which a company must choose to build a small, medium, or large
Answer Preview: a Expected monetary value for …

, Chapter: 16 -Problem: 24 >> Suppose that a normally distributed process (centered at target) has three sigma capability. If the process shifts 1.5 sigmas to the right, show that the process will produce defective products at a rate of 66,800 per million.
Answer Preview: P defective P x 3 or x 3 If the …

, Chapter: 16 -Problem: 16 >> Explain the interpretation of the natural tolerance limits for a process. What assumptions must be made in order to properly make this interpretation? How do we check these assumptions?
Answer Preview: The natural tolerance limits will include almost all 99 73 …

, Chapter: 14 -Problem: 70 >> Although natural gas is currently inexpensive and nuclear power currently (and perhaps deservedly) does not have a good reputation, it is possible that more nuclear power plants will be constructed in the future. Table 14.19 presents data concerning the construction costs of light water reactor (LWR) nuclear power plants. The dependent variable C, construction cost, is expressed in millions of dol
Answer Preview: The partial results of all possible regressions showing the 20 highest ranking models where rank is based on s and adjusted R 2 Stepwise regressi

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12 Reviews for Business Statistics In Practice Using Data Modeling And Analytics Textbook Questions And Answers