Consider the file named EmployeeData.xlsx that accompanies this book. What errors (or potential errors) can you find in this data set?
> Prepare a line graph of these data. Do the data appear to be stationary or nonstationary?
> Use regression analysis to answer the following questions. a. Fit a linear trend model to the data set. What is the estimated regression function? b. Interpret the R2 value for your model. c. Prepare a line graph comparing the linear trend predictions ag
> Use Holt’s method to create a model that minimizes the MSE for the data set. Use Solver to estimate the optimal values of a and b. a. What are the optimal values of a and b? b. Prepare a line graph comparing the predictions from Holt’s method against the
> In the wake of the Enron scandal two public accounting firms, Oscar Anderson (OA) and TriceMilkhouse -Loopers (TML), merged (forming OATML) and are reviewing their methods for detecting management fraud during audits. The two firms had each developed the
> Create a Double Moving Average model (with k 5 4) for the data set. a. Prepare a line graph comparing the Double Moving Average predictions against the original data. b. What are the forecasts for the next 4 months using this technique?
> Prepare a line graph of these data. Do the data appear to be stationary or nonstationary?
> Prepare a line graph of these data. Do the data appear to be stationary or nonstationary?
> Use Holt-Winter’s multiplicative method to create a seasonal model that minimizes the MSE for the data set. Use Solver to determine the optimal values of a, b, and g. a. What are the optimal values of a, b, and g? b. Prepare a line graph comparing the pr
> Use Holt-Winter’s additive method to create a seasonal model that minimizes the MSE for the data set. Use Solver to determine the optimal values of a, b, and g. a. What are the optimal values of a, b, and g? b. Prepare a line graph comparing the predicti
> Use Holt’s method to create a model that minimizes the MSE for the data set. Use Solver to determine the optimal values of a and b. a. What are the optimal values of a and b? b. Prepare a line graph comparing the predictions from Holt’s method against th
> Use regression analysis to fit a quadratic trend model to the data set. a. What is the estimated regression function? b. Compare the adjusted-R2 value for this model to that of the linear trend model. What is implied by this comparison? c. Prepare a line
> Use regression analysis to fit a linear trend model to the data set. a. What is the estimated regression function? b. Interpret the R2 value for your model. c. Prepare a line graph comparing the linear trend predictions against the original data. d. Wha
> Use Holt’s method to create a model that minimizes the MSE for the data set. Use Solver to estimate the optimal values of a and b. a. What are the optimal values of a and b? b. Are these values surprising? Why or why not? Questions 35 through 39 refer to
> Create an exponential smoothing model that minimizes the MSE for the data set. Use Solver to estimate the optimal value of a. a. What is the optimal value of a? b. Prepare a line graph comparing the exponential smoothing predictions against the original
> A company has three warehouses that supply four stores with a given product. Each warehouse has 30 units of the product. Stores 1, 2, 3, and 4 require 20, 25, 30, and 35 units of the product, respectively. The per unit shipping costs from each warehouse
> Use Solver to determine the weights for a four-period weighted moving average on the data set that minimizes the MSE. a. What are the optimal values for the weights? b. Prepare a line graph comparing the weighted moving average predictions against the or
> Compute the two-period and four-period moving average predictions for the data set. a. Prepare a line graph comparing the moving average predictions against the original data. b. Compute the MSE for each of the two moving averages. Which appears to prov
> Prepare a line graph of these data. Do the data appear to be stationary or nonstationary?
> Each month, Joe’s Auto Parts uses exponential smoothing (with a 5 0.25) to predict the number of cans of brake fluid that will be sold during the next month. In June, Joe forecast that he would sell 37 cans of brake fluid during July. Joe actually sold 4
> Use regression analysis to fit an additive seasonal model with linear trend to the data set. a. What is the estimated regression function? b. Interpret the R2 value for your model. c. Interpret the parameter estimates corresponding to the indicator varia
> Use Holt-Winter’s multiplicative method to create a seasonal model that minimizes the MSE for the data set. Use Solver to determine the optimal values of a, b, and g. a. What are the optimal values of a, b, and g? b. Prepare a line graph comparing the pr
> Use Holt-Winter’s additive method to create a seasonal model that minimizes the MSE for the data set. Use Solver to determine the optimal values of a, b, and g. a. What are the optimal values of a, b, and g? b. Prepare a line graph comparing the predicti
> Use Holt’s method to create a model that minimizes the MSE for the data set. Use Solver to determine the optimal values of a and b. a. What are the optimal values of a and b? b. Prepare a line graph comparing the predictions from Holt’s method against th
> Use the multiplicative seasonal technique for stationary data to model the data. Use Solver to determine the optimal values of a and b. a. What are the optimal values of a and b? b. Prepare a line graph comparing the predictions from this method against
> Use the additive seasonal technique for stationary data to model the data. Use Solver to determine the optimal values of a and b. a. What are the optimal values of a and b? b. Prepare a line graph comparing the predictions from this method against the or
> Nolan Banks is an auditor for the Public Service Commission for the state of Georgia. The Public Service Commission is a government agency responsible for ensuring that utility companies throughout the state manage their operations efficiently so that th
> Baldwin Enterprises is a large manufacturing company with operations and sales divisions located in the United States and several other countries. The CFO of the organization is concerned about the amount of money Baldwin has been paying in transaction c
> Use regression analysis to fit a quadratic trend model to the data set. a. What is the estimated regression function? b. Compare the adjusted-R2 value for this model to that of the linear trend model. What is implied by this comparison? c. Prepare a line
> Use regression analysis to fit a linear trend model to the data set. a. What is the estimated regression function? b. Interpret the R2 value for your model. c. Prepare a line graph comparing the linear trend predictions against the original data. d. Wha
> Use regression analysis to fit an additive seasonal model with linear trend to the data set. a. What is the estimated regression function? b. Interpret the R2 value for your model. c. Interpret the parameter estimates corresponding to the indicator varia
> Use Holt-Winter’s multiplicative method to create a seasonal model that minimizes the MSE for the data set. Use Solver to determine the optimal values of a, b, and g. a. What are the optimal values of a, b, and g? b. Prepare a line graph comparing the p
> A manufacturing company uses a certain type of steel rod in one of its products. The design specifications for this rod indicate that it must be between 0.353 and 0.357 inches in diameter. The machine that manufactures these rods is set up to produce the
> Use Holt-Winter’s additive method to create a seasonal model that minimizes the MSE for the data set. Use Solver to determine the optimal values of a, b, and g. a. What are the optimal values of a, b, and g? b. Prepare a line graph comparing the predicti
> Use the multiplicative seasonal technique for stationary data to model the data. Use Solver to determine the optimal values of a and b. a. What are the optimal values of a and b? b. Prepare a line graph comparing the predictions from this method against
> Use the additive seasonal technique for stationary data to model the data. Use Solver to determine the optimal values of a and b. a. What are the optimal values of a and b? b. Prepare a line graph comparing the predictions from this method against the or
> Use regression analysis to fit a quadratic trend model to the data set. a. What is the estimated regression function? b. Compare the adjusted-R2 value for this model to that of the linear trend model. What is implied by this comparison? c. Prepare a line
> Use regression analysis to fit a linear trend model to the data set. a. What is the estimated regression function? b. Interpret the R2 value for your model. c. Prepare a line graph comparing the linear trend predictions against the original data. d. Wha
> Use Solver to create a Sensitivity Report for question 22 at the end of Chapter 3 and answer the following questions: a. Which of the constraints in the problem are binding? b. If the company was going to eliminate one of its products, which should it be
> Use regression analysis to answer the following questions. a. Fit a linear trend model to the data set. What is the estimated regression function? b. Interpret the R2value for your model. c. Prepare a line graph comparing the linear trend predictions aga
> Use Holt’s method to create a model that minimizes the MSE for the data set. Use Solver to determine the optimal values of a and b. a. What are the optimal values of a and b? b. Prepare a line graph comparing the predictions from Holt’s method versus the
> Create a double moving average model (with k 5 2) for the data set. a. Prepare a line graph comparing the double moving average predictions against the original data. b. What are the forecasts for the next 2 years using this technique?
> Prepare a line graph of these data. Do the data appear to be stationary or nonstationary?
> Use regression analysis to fit a linear trend model to the data set. a. What is the estimated regression function? b. Interpret the R2 value for your model. c. Prepare a line graph comparing the linear trend predictions against the original data. d. Wha
> What is the result of using regression analysis to estimate a linear trend model for a stationary time series?
> The manager of the commercial loan department for a bank wants to develop a rule to use in determining whether or not to approve various requests for loans. The manager believes that three key characteristics of a company’s performance
> The Royalty Gold Corporation prospects for undiscovered gold deposits around the world. The company is currently investigating a possible site on the island of Milos off the coast of Greece in the Mediterranean. When prospecting, the company drills to co
> The director of the MBA program at Salter dine University wants to develop a procedure to determine which applicants to admit to the MBA program. The director believes that an applicant’s undergraduate grade point average (GPA) and scor
> Refer to the Universal Bank example used to demonstrate the various classification techniques in this chapter. Suppose the Universal Bank data had included the home zip code for each customer. What issues might arise in using the customer’s zip code as a
> The 2000 U.S. presidential election was one of the most controversial in history with the final outcome ultimately being decided in a court of law rather than in the voting booth. At issue were the election results in Palm Beach, Florida. Palm Beach Coun
> What would a lift chart look like for a classification technique with 100% accuracy?
> It can be argued that regression analysis and discriminate analysis both use a set of independent variables to predict the value of a dependent variable. What, then, is the difference between regression analysis and discriminate analysis?
> What is a centroid?
> Colleges and universities are often interested in identifying their peer institutions. The file named Colleges.xlsm that accompanies this book contains a number of (artificial) metrics for 307 higher education institutions in the United States. a. Use k-
> Home Basics is a home improvement retail store selling all manner of products that are needed by home owners to repair, remodel, and redecorate their homes. The management of Home Basics is analyzing buying patterns of its customers to evaluate the layou
> Explain the purpose of the training, validation, and test data sets in data mining.
> Prepare scatter plots of the values of X1 and X2 against Y. a. Do these relationships seem to be linear or nonlinear? b. Determine the parameter estimates for the regression function represented by: Ŷi 5 b0 1 b1X1i 1 b2X2i 1 b3X3i 1 b4X4i where X4i 5 X
> Roger Gallagher owns a used car lot that deals solely in used Corvettes. He wants to develop a regression model to help predict the price he can expect to receive for the cars he owns. He collected the data found in the file Corvettes.xlsx describing the
> The IRS wants to develop a method for detecting whether or not individuals have overstated their deductions for charitable contributions on their tax returns. To assist in this effort, the IRS supplied data found in the file IRS.xlsx that accompanies thi
> Use Solver to create a Sensitivity Report for question 19 at the end of Chapter 3 and answer the following questions: a. Is the solution degenerate? b. Would the solution change if the price of raisins was $2.80 per pound? c. Would the solution change if
> An accounting firm that specializes in auditing mining companies collected the data found in the file MiningAudit.xlsx that accompanies this book describing the long-term assets and long-term debt of its 12 clients. a. Prepare a scatter plot of the data.
> Members of the Roanoke Health and Fitness Club pay an annual membership fee of $250 plus $3 each time they use the facility. Let X denote the number of times a person visits the club during the year. Let Y denote the total annual cost for membership in t
> Least squares regression finds the estimated values for the parameters in a regression model to minimize ESS 5 o n i 5 1 (Yi 2 Ŷi ) 2 . Why is it necessary to square the estimation errors? What problem might be encountered if we attempt to minimize just
> Suppose the variable X is being used to predict Y using a linear regression function of the form Ŷi 5 b0 1 b1Xi. If there is no linear relation between X and Y, what is the optimal regression function (i.e., what are the optimal values of b0 and b1)? Exp
> Throughout our discussion of regression analysis, we used the Regression command to obtain the parameter estimates that minimize the sum of squared estimation errors. Suppose that we want to obtain parameter estimates that minimize the absolute value of
> Throughout our discussion of regression analysis, we used the Regression command to obtain the parameter estimates that minimize the sum of squared estimation errors. Suppose that we want to obtain parameter estimates that minimize the sum of the absolut
> Caveat Emptor, Inc. is a home inspection service that provides prospective homebuyers with a thorough assessment of the major systems in a house prior to the execution of the purchase contract. Prospective homebuyers often ask the company for an estimate
> The personnel director for a small manufacturing company has collected the data found in the file Manufacturing.xlsx describing the salary (Y) earned by each machinist in the factory along with the average performance rating (X1) over the past three year
> A cost estimator for a construction company has collected the data found in the file Construction.xlsx describing the total cost (Y) of 97 different projects and the following five independent variables thought to exert relevant influence on the total co
> Hydroxyethyl cellulose (HEC) is a gelling and thickening agent created from a molecular combination of cellulose, ethylene oxide (EO), and nitric acid. It is designed to mix with a water-based solution to increase the viscosity of the mixture. This added
> With Christmas coming, Ryan Bellison was searching for the perfect gift for his wife. After several years of marriage, Ryan leaned back in his chair at the office and tried to think of the one thing his wife has wanted during the years they pinched penni
> Chris Smith is a sports car enthusiast with a particular love for Mini Coopers. He downloaded data from eBay on completed auctions of Mini Coopers and used it to create the data set in file MiniCooper.xlsx showing the selling prices, age, mileage, and lo
> An appraiser collected the data found in file Appraiser.xlsx describing the auction selling price, diameter (in inches), and item type of several pieces of early 20th century metal tableware manufactured by a famous artisan. The item type variable is cod
> In comparing two different regression models that were developed using the same data, we might say that the model with the higher R2 value will provide the most accurate predictions. Is this true? Why or why not?
> Duque Power Company wants to develop a regression model to help predict its daily peak power demand. This prediction is useful in determining how much generating capacity needs to be available (or purchased from competitors) on a daily basis. The daily p
> Auto Reports is a consumer magazine that reports on the cost of maintaining various types of automobiles. The magazine collected the data found in the file AutoReports.xlsx describing the annual maintenance cost of a certain type of luxury imported autom
> Creative Confectioners is planning to introduce a new brownie. A small-scale “taste test” was conducted to assess consumer’s preferences (Y) with regard to moisture content (X1) and sweetness (X2). Da
> Goldtone Chemical Company is developing a new stain-resistant liquid product that can be applied to different types of fabric. The product can be manufactured in different ways that result in different costs and differing levels of stability for applicat
> When interest rates decline, Patriot Bank has found they get inundated with requests to refinance home mortgages. To better plan its staffing needs in the mortgage processing area of its operations, Patriot wants to develop a regression model to help pre
> Oriented Strand Board (OSB) is manufactured by gluing woodchips together to form panels. Several panels are then bonded together to form a board. One of the factors influencing the strength of the final board is the amount of glue used in the production
> An analyst for Phidelity Investments wants to develop a regression model to predict the annual rate of return for a stock based on the price-earnings (PE) ratio of the stock and a measure of the stock’s risk. The data found in the file
> Advertising is the primary source of revenue for newspaper companies. Over the past 10 to15 years, the newspaper industry has been adjusting to changes in the mix of services that produce this revenue. The two main categories of services are run on press
> The O-rings in the booster rockets on the space shuttle are designed to expand when heated to seal different chambers of the rocket so that solid rocket fuel is not ignited prematurely. According to engineering specifications, the O-rings expand by some
> Golden Years Easy Retirement Homes owns several adult care facilities throughout the southeast United States. A budget analyst for Golden Years has collected the data found in the file GoldenYears.xlsx describing for each facility: the number of beds (X1
> A recruiter for Big Box stores has collected the data in the file BigBox.xlsx summarizing the amount of money the company spent on print, web, and TV advertising in California over the past 22 months and the resulting number of applications received from
> Members of the Roanoke Health and Fitness Club pay an annual membership fee of $250 plus $3 each time they use the facility. Let X denote the number of times a person visits the club during the year. Let Y denote the total annual cost for membership in t
> The XYZ Company produces two products. The total profit achieved from these products is described by the following equation Every 1,000 units of X1 require 1 hour of time in the shipping department, and every 1,000 units of X2 require 30 minutes in the
> A car dealership needs to determine how to allocate its $20,000 advertising budget. They have estimated the expected profit from each dollar (X) spent in four different advertising media as follows: If the company wants to spend at least $500 on each me
> The PENTEL Corporation manufactures three different types of computer chips. Each type of chip requires different amounts of processing time in three different departments as summarized in the following table The total profit for each type of chip may b
> Consider the following function: Y 5 37.684 2 15.315X 1 3.095X2 2 0.218X3 1 0.005X4 a. Plot this function on an X-Y graph for positive values of X from 1 to 20. b. How many local maximum solutions are there? c. How many local minimum solutions are the
> Consider the following function’s 5 37.684 2 15.315X 1 3.095X2 2 0.218X31 0.005X4 a. Plot this function on an X-Y graph for positive values of X from 1 to 20. b. How many local maximum solutions are there? c. How many local minimum solutions are there? d
> The Major Motors Corporation manufactures heavy trucks at a plant in Dublin, Virginia. The factory’s stock of spare and custom parts is stored in a huge shelving system that is several stories high and runs the length of several footbal
> Walla Corporation is a privately held manufacturer of doors and windows with annual sales in excess of $900 million. Some of the company’s products are “standard size” and sold through wholesale and retail building material centers. However, much of thei
> Consider the following function: Y 5 20.865 1 8.454X 2 1.696X2 1 0.132X3 2 0.00331X4 a. Plot this function on an X-Y graph for positive values of X from 1 to 20. b. How many local maximum solutions are there? c. How many local minimum solutions are there
> A small printing shop has 10 jobs it must schedule. The processing times and due dates for each job are summarized in the following table: a. Suppose the jobs are scheduled in ascending order by processing time. How many jobs will be late? By how many t
> A mortgage company owns the following 10 mortgages. Investors will purchase packages of mortgages worth at least $1 million. What is the maximum number of such packages that can be created from this set of mortgages? a. Create a spreadsheet model for th
> World Delivery Service (WDS) specializes in the pick-up and delivery of packages at homes and businesses throughout the United States and around the world. WDS utilizes a fleet of trucks that leave from local depots and make a number of pickup and delive
> Barbara Roberts recently received $30,000 as a small inheritance from a distant relative. She wants to invest the money so as to earn $900 to buy a notebook computer next year when she enters graduate school one year from now. (Barbara plans to use her i
> Sometimes the historical data on returns and variances may be poor predictors of how investments will perform in the future. In this case, the scenario approach to portfolio optimization may be used. Using this technique, we identify several different sc
> Mona Obiekwu wants to invest in the stocks of companies A, B, C, and D, whose annual Returns for the past 13 years are as follows. a. Suppose Muna is completely risk averse. What percentage of her portfolio should be invested in each stock and what wou
> An investor wants to determine the safest way to structure a portfolio from several investments. Investment A produces an average annual return of 14% with a variance of 0.025. Investment B produces an average rate of return of 9% with a variance of 0.01
