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?
> 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
> Consider the file named EmployeeData.xlsx that accompanies this book. What errors (or potential errors) can you find in this data set?
> 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
> 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
> The Wiggly Piggly Grocery Company owns and operates numerous grocery stores throughout the state of Florida. It is developing plans to consolidate warehouse operations so that there will be 3 different warehouses that supply stores in 10 different region
> Water is delivered throughout New York City using eight main waterlines that are connected at six pumping stations as shown in Figure 8.43. The numbers on each of the arcs indicates the maximum allowable flow of water through each waterline (in 1,000s of
> “So it’s come down to this,” thought Roger Mellichamp as he looked around at the empty Styrofoam coffee cups and papers littering his office. When he accepted the job of campaign manager for his long-
> Beth Dale is the Director of Development for a nonprofit organization that depends largely on charitable gifts for its operations. Beth needs to assign four different staff people to make trips to call on four possible donors. Only one staff person can c
> Consider an optimization problem with two variables and the constraints X1 # 5, X2 # 5 where both X1 and X2 are nonnegative. a. Sketch the feasible region for this problem. b. Sketch level curves of a nonlinear objective for this problem that would have
> The Heat-Aire Company has two plants that produce identical heat pump units. However, production costs at the two differ due to the technology and labor used at each plant. The total costs of production at the plants depend on the quantity produced, and
> An air-ambulance service in Colorado is interested in keeping its helicopter in a central location that would minimize the flight distance to four major ski resorts. An X-Y grid was laid over a map of the area to determine the following latitude and long
> The Rigger Corporation is a Seattle-based R&D company that recently developed a new type of fiber substrate that is waterproof and resists dirt. Several carpet manufacturers in northeast Georgia want to use Rugger as their sole supplier for this new
> The Arctic Oil Company has recently drilled two new wells in a remote area of Alaska. The company is planning to install a pipeline to carry the oil from the two new wells to a transportation and refining (T&R) center. The locations of the oil wells
> A pharmaceutical company is hiring five new salespeople to expand its sales in a western state. Pharmaceutical sales representatives do not sell directly to doctors because doctors do not purchase and distribute drugs. However, doctors do write prescript
> A new mother wants to establish a college education fund for her newborn child. She wants this fund to be worth $100,000 in 18 years. a. If she invests $75 per month, what is the minimum rate of return she would need to earn on her investment? Assume mon
> Carnival Confections, Inc. produces two popular southern food items, pork rinds and fried peanuts, which it sells at a local recreation area on weekends. The owners of the business have estimated their profit function on these items to be: Note that p i
> Howie Jones, owner of Blue Ridge Hot Tubs, is facing a new problem. Although sale of the two hot tubs manufactured by his company (Aqua-Spas and Hydro-Luxes) have been brisk, the company is not earning the level of profits that Howie wants to achieve. Ha
> The summer before completing his MBA, Noah Franklin finally decided to take the trip to Europe that he had always dreamed about. However, given his limited bank account, he knows he will have to plan and budget wisely in order to go everywhere and see ev
> Kan Nutimbo’s family has been planning a visit to a major theme park in Florida. As the family wants to make the most of their time at the park, Kwane has collected data (in the file ParkData.xlsx accompanying this book) that includes estimated walking
> The Radford hardware store expects to sell 1,500 electric garbage disposal units in the coming year. Demand for this product is fairly stable over the year. It costs $20 to place an order for these units and the company assumes a 20% annual holding cost
> In describing the NLP solution strategy summarized in Figure 8.2, we noted that the fastest improvement in the objective function is obtained by moving from point A in a direction that is perpendicular to the level curve of the objective function. Howeve
> Super City is a large retailer of electronics and appliances. The store sells three different models of TVs that are ordered from different manufacturers. The demands, costs, and storage requirements for each model are summarized in the following table:
> The United Delivery Service (UDS) has four vehicles that it uses to make deliveries from its depot to 36 locations in and around Moscow, Idaho. The travel times between each of the delivery locations is summarized in the file UDSData.xlsx that accompanie
> The file InvestmentData.xlsx that accompanies this book contains data on the average returns and covariance’s for 15 different mutual funds. Use this data to answer the following questions: a. Create the efficient frontier associated with this collection
> Lax Rex is an aspiring rock band composed of college friends based in Raleigh, NC. They are planning a short tour that will take them to five other college towns throughout the MidAtlantic region over a 10-day period. The distances between each of the ci
> Vijay Bashwani is organizing a charity golf tournament where teams of four players will play in a captain’s choice format. The handicaps of the 40 players who have registered for the tournament are summarized in the following table. Vij
> Suppose a gift shop in Myrtle Beach has an annual demand for 15,000 units for a souvenir kitchen magnet that it buys for $0.50 per unit. Assume it costs $10 to place an order and the inventory carrying cost is 25% of the item’s unit cost. Use Solver to d
> In the insurance problem discussed in section 8-8 of this chapter, suppose that Thom is confident that he can invest his money to earn a 15% annual rate of return compound quarterly. Assuming a fixed 15% return, suppose he now wants to determine the mini
