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Chapter: 4 -Problem: 3 >> Amanda Boleyn, an entrepreneur who recently sold her start-up for a multi-million-dollar sum, is looking for alternate investments for her newfound fortune. She is considering an investment in wine, similar to how some people invest in rare coins and fine art. To educate herself on the properties of fine wine, she has collected data on 13 different characteristics of 178 wines. Amanda has applied
Answer Preview: To determine the best value of k for a k-means clustering, we compare the inter-cluster distances to the within-cluster distances. This provides a mea…

, Chapter: 2 -Problem: 27 >> Huron Lakes Candies (HLC) has developed a new candy bar called Java Cup that is a milk chocolate cup with a coffee-cream center. In order to assess the market potential of Java Cup, HLC has developed a taste test and follow-up survey. Respondents were asked to taste Java Cup and then rate Java Cup’s taste, texture, creaminess of filling, sweetness, and depth of the chocolate flavor of the cup on a
Answer Preview: a. Using the Excel function COUNTBLANK we find that there is one blank response in column C (Texture…

, Chapter: 3 -Problem: 21 >> Below is a sample of the data in the file NFLAttendance which contains the 32 teams in the National Football League, their conference affiliation, their division, and their average home attendance. a. Create a treemap using these data that separates the teams into their conference affiliations (NFC and AFC) and uses size to represent each team€™s average home attendance. Note that you will need to
Answer Preview: a. b. c. The treemap chart makes it very easy to identify the conference affiliat…

, Chapter: 4 -Problem: 4 >> Jay Gatsby categorizes wines into one of three clusters. The centroids of these clusters, describing the average characteristics of a wine in each cluster, are listed in the following table. Jay has recently discovered a new wine from the Piedmont region of Italy with the following characteristics. In which cluster of wines should he place this new wine? Justify your choice with appropriate calcul
Answer Preview: To determine which cluster is the most appropriate for the new wine observation, we c…

, Chapter: 2 -Problem: 28 >> Marilyn Marshall, a Professor of sports economics, has obtained a data set of home attendance for each of the 30 major league baseball franchises for each season from 2010 through 2016. Dr. Marshall suspects the data, provided in the file AttendMLB, is in need of a thorough cleansing. You should also find a reliable source of Major League Baseball attendance for each franchise between 2010 and 201
Answer Preview: a. Using the Excel function COUNTBLANK we find that one observation is missing in column B and one observation missing in column C. Additional investigation shows that the missing value in column B is …

, Chapter: 3 -Problem: 2 >> The following table shows an example of gross domestic product values for five countries over six years in equivalent U.S. dollars ($). a. How could you improve the readability of this table? b. The file GDPyears contains sample data from the United Nations Statistics Division on 30 countries and their GDP values from Year 1 to Year 6 in US$. Create a table that provides all these data for a user.
Answer Preview: a. The readability of the table could be improved by: removing unnecessary gridlines, left-aligning …

, Chapter: 11 -Problem: 17 >> You are considering the purchase of a new car and are weighing the choice between a Ford Fusion Hybrid sedan (which assists a gasoline engine with an electric motor powered via regenerative braking) and the Ford Fusion Non-Hybrid sedan (just a standard gasoline engine). The non-hybrid version costs $23,240 with fuel economy of 21 miles per gallon in city driving and 32 miles per gallon in highway
Answer Preview: a. The average cost savings of a hybrid versus a non-hybrid is $915. b. There is a 0 046 probability …

, Chapter: 11 -Problem: 30 >> As admissions director for an exclusive executive MBA program which takes place on Necker Island in the Caribbean, Richard Branson must decide which applicants should receive admission offers. This is a difficult decision-making problem, as an applicant may or may not accept an admission offer. Currently, Richard is considering 30 applicants, each of which has a different probability of accepting
Answer Preview: A portion of a spreadsheet model follows. The average value is 64 65 …

, Chapter: 12 -Problem: 23 >> During each month, there is enough production capacity to produce up to 32,000 total balls (football 1 soccer balls), and there is enough storage capacity to store up to 20,000 total balls (football 1 soccer balls) at the end of the month. Brendamore wants to meet these demands on time and it currently has 7,000 footballs and 5,000 soccer balls in inventory. In anticipation of demand beyond the si
Answer Preview: Let A = amount in dollars to invest stock A B = amount in dollars to invest stock B C = amount in do…

, Chapter: 11 -Problem: 32 >> A European put option on a currency allows you to sell a unit of that currency at the specified strike price (exchange rate) at a particular point in time after the purchase of the option. For example, suppose Press Teag Worldwide (from Section 11.3) purchases a three-month European put option for a British pound with a strike price of £0.630 per U.S. dollar. Then, if the exchange rate in thre
Answer Preview: The average revenue advantage from hedging is $475. There is a 0 663 probability that hedging will r…

, Chapter: 11 -Problem: 27 >> Young entrepreneur Fan Bingbing has launched a business venture in which she uses stories submitted by university students as the basis for comics in a monthly animestyle magazine. Based on market research, Fan estimates that average monthly demand will be 500 copies. She has decided to model monthly demand as normal random variable with a mean of 500 and a standard deviation of 300. Fan must pay
Answer Preview: a. A normal distributions lower limit is negative infinity and upper limit is positive infinity. Because we are modeling demand, negative demand values do not make practical sense, nor do extremely large demand values. Because the mean is 500 and standard deviation is 300, the probability of generating a negative demand value …

, Chapter: 5 -Problem: 28 >> A random variable has a triangular probability density function with a = 50, b = 375, and m = 250.a. Sketch the probability distribution function for this random variable. Label the points a = 50, b = 375, and m = 250 on the x-axis.b. What is the probability that the random variable will assume a value between 50 and 250?c. What is the probability that the random variable will assume a value great
Answer Preview: a. b. c. 0 007 0 006 0 …

, Chapter: 11 -Problem: 21 >> Steve Austin is the fleet manager for SharePlane, a company that sells fractional ownership of private jets. SharePlane must carefully maintain their jets at all times. If a jet breaks down, it must be repaired immediately. Even if a jet functions well, it must be maintained at regularly scheduled intervals. Currently, Steve is managing two jets, Jet A and Jet B, for a collection of clients and is
Answer Preview: a. The time to first failure is modeled with a Gamma distribution and the repair t…

, Chapter: 3 -Problem: 22 >> For this problem we will use the data in the file Global100 that was referenced in Section 3.4 as an example for creating a treemap. Here we will use these data to create a GIS chart. A portion of the data contained in Global100 is shown below. Use Excel to create a GIS chart that1) displays the Market Value of companies in different countries as a heat map;2) Allows you to filter the results so t
Answer Preview: a. The United Kingdom has the highest total market value for Global 100 companies. The Global 100 co…

, Chapter: 11 -Problem: 7 >> The Dallas Mavericks and the Golden State Warriors are two teams in the National Basketball Association. Dallas and Golden State will play multiple times over the course of an NBA season. Assume that the Dallas Mavericks have a 25% probability of winning each game against the Golden State Warriors. a. Construct a simulation model that uses the negative binomial distribution to simulate the number
Answer Preview: a. A portion of the simulation model using a negative binomial distribution is shown in the Excel sc…

, Chapter: 11 -Problem: 10 >> Using the file LandSharkBeta, evaluate bid amounts from $1,229,000 to $1,329,000 in increments of $20,000 by building a table listing 95% confidence intervals around the average return and probability of winning the auction. Which of these bid amounts do you recommend?
Answer Preview: A bid amount of $1,309,000 appears to maximize the expected …

, Chapter: 10 -Problem: 9 >> Goal Kick Sports (GKS) is a retail chain that sells youth and adult soccer equipment. The GKS financial planning group has developed a spreadsheet model to calculate the net discounted cash flow of the first five years of operations for a new store. This model is used to assess new locations under consideration for expansion.a. Use Excel€™s Formula Auditing tools to audit this model and correct an
Answer Preview: a. There are errors in the calculations of Rent in row 26 for Years 2 through 5. As shown below, ins…

, Chapter: 4 -Problem: 22 >> Companies can learn a lot about customer experiences by monitoring the social media web site Twitter. The file AirlineTweets contains a sample of 36 tweets of an airline’s customers. Normalize the terms by using stemming and generate binary term-document matrix. a. What are the five most common terms occurring in these tweets? How often does each term appear? b. Apply hierarchical clustering using
Answer Preview: a. The five most commonly appearing terms are: The term flight appears 13 times, bag 10 times, gate …

, Chapter: 6 -Problem: 53 >> A well-respected polling agency has conducted a poll for an upcoming Presidential election. The polling agency has taken measures so that its random sample consists of 50,000 people and is representative of the voting population. The file Pedro contains survey data for 50,000 respondents in both a pre-election survey and a post-election poll. a. Based on the data in the “Support Pedro in Pre-Elect
Answer Preview: a. Sample Proportion = 0 4643 Pedro should not be optimistic about winning the election beca…

, Chapter: 4 -Problem: 2 >> In an effort to inform political leaders and economists discussing the deregulation of electric and gas utilities, data on eight numerical variables from utility companies have been grouped using hierarchical clustering based on Euclidean distance as the similarity measure and complete linkage as the clustering method. a. Based on the following dendrogram, what is the most appropriate number of cl
Answer Preview: a. A relatively large jump in within-cluster dissimilarity (Euclidean distance in this case) occurs …

, Chapter: 3 -Problem: 23 >> Zeitler€™s Department Stores sells its products online and through traditional brick-andmortar stores. The following parallel-coordinates plot displays data from a sample of 20 customers who purchased clothing from Zeitler€™s either online or in-store. The data include variables for the customer€™s age, annual income, and the distance from the customer€™s home to the nearest Zeitler€™s store. Acco
Answer Preview: Online customers appear …

, Chapter: 4 -Problem: 16 >> Apply k-means clustering with values of k = 2, 3, 4, and 5 to cluster the data in DemoKTC based on the Age, Income, and Children variables. Normalize the values of the input variables to adjust for the different magnitudes of the variables. How many clusters do you recommend? Why?
Answer Preview: Use the data file DemoKTC file to conduct the following analysis. Two clusters: Four clusters: Five …

, Chapter: 4 -Problem: 1 >> The regulation of electric and gas utilities is an important public policy question affecting consumer€™s choice and cost of energy provider. To inform deliberation on public policy, data on eight numerical variables have been collected for a group of energy companies. To summarize the data, hierarchical clustering has been executed using Euclidean distance as the similarity measure and Ward€™s me
Answer Preview: A big jump in within-cluster dissimilarity (Euclidean distance in this case) occurs when tr…

, Chapter: 11 -Problem: 28 >> Bianca Peterson is a marketing engineer for Hexagon Composites, a company which sells carbon composite storage tanks. In an effort to gain product adoptions from customers, Bianca goes on sales trips (often to foreign countries). For each of 120 previous sales trips, the file SalesTrips lists (1) whether the trip resulted in the visited customer adopting the product, and (2) the revenue generated
Answer Preview: a. Revenue is assumed to be uniformly distributed. Based on 1000 trials, the average revenue Bianca …

, Chapter: 4 -Problem: 23 >> The online review service Yelp helps millions of consumers find the goods and services they seek. To help consumers make more-informed choices, Yelp includes over 120 million reviews. The file YelpItalian contains a sample of 21 reviews for an Italian restaurant. Normalize the terms by using stemming and a generate binary term-document matrix. a. What are the five most common terms in these review
Answer Preview: a. The five most commonly appearing terms are: The term pizza appears 12 times (in 10 different revi…

, Chapter: 2 -Problem: 12 >> Approximately 1.65 million high school students take the Scholastic Aptitude Test (SAT) each year, and nearly 80% of the college and universities without open admissions policies use SAT scores in making admission decisions. The current version of the SAT includes three parts: reading comprehension, mathematics, and writing. A perfect combined score for all three parts is 2400. A sample of SAT sco
Answer Preview: a. Class Frequency 800-1000 1 1000-1200 3 1200-1400 6 1400-1600 10 1600-1800 7 1800-2…

, Chapter: 4 -Problem: 5 >> Leggere, an internet book retailer, is interested in better understanding the purchase decisions of its customers. For a set of 2,000 customer transactions, it has categorized the individual book purchases comprising those transactions into one or more of the following categories: Novels, Willa Bean series, Cooking Books, Bob Villa Do-It-Yourself, Youth Fantasy, Art Books, Biography, Cooking Books
Answer Preview: a. A Bottura cooking book is a specific type of cooking book, so whenever a customer purchases a Bottura cooking book they must also have bought a cooking book. Thus, the confidence of If a customer p…

, Chapter: 4 -Problem: 18 >> Josephine Mater works for the supply-chain analytics division of Trader Joe’s, a national chain of specialty grocery stores. Trader Joe’s is considering a redesign of its supply chain. Josephine knows that Trader Joe’s uses frequent truck shipments from its distribution centers to its retail stores. To keep costs low, retail stores are typically located near a distribution center. The file TraderJ
Answer Preview: The solution for eight clusters is shown below. According to this solution, between one (Clusters 4 …

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