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8 Quantitative Business Decision Making Online Quiz Questions

Use this free practice quiz with 20 questions to review 8 Quantitative Business Decision Making, test your knowledge, and prepare for your next test or exam.

20 questions
01
Choose one
1 point

When comparing business alternatives, which costs should be excluded from an incremental payoff analysis?

  1. A

    All costs incurred before the decision, because they are already included in the business records

  2. B

    Costs that cannot be recovered and do not change between the alternatives

  3. C

    Any cost that is difficult to estimate

  4. D

    All costs associated with the alternative that has the lowest expected payoff

02
True or false
1 point

An alternative with a higher expected value is guaranteed to produce the higher payoff on the next individual decision.

  1. A

    True

  2. B

    False

03
Written response
1 point

A business estimates a 0.40.4 probability of high demand and a 0.60.6 probability of low demand. Alternative A pays 8080 thousand dollars under high demand and 2020 thousand dollars under low demand. Alternative B pays 3030 thousand dollars under high demand and 5050 thousand dollars under low demand. By how much does A's expected payoff exceed B's? Enter the difference in thousand dollars.

04
Fill in the blank
1 point

In a payoff model that includes every possible state of the world, the probabilities assigned to those states must sum to .

05
Choose one
1 point

A business study reports a small p-value for a test of a specified null hypothesis. Which interpretation is justified?

  1. A

    The probability that the null hypothesis is true

  2. B

    The size of the business effect being tested

  3. C

    Evidence against the null hypothesis, interpreted under the test assumptions

  4. D

    Proof that the observed relationship is caused by the variable being studied

06
Choose all
1 point

A business wants to estimate customer satisfaction in its target population. Which practices can improve the credibility of its sample estimate? Select all that apply.

  1. A

    Use random sampling where appropriate

  2. B

    Treat a small sample as reliable whenever its calculated result is numerically precise

  3. C

    Ensure the sample adequately covers the target population

  4. D

    Measure the relevant quantities carefully

07
True or false
1 point

If a hypothesis test fails to reject the null hypothesis, this proves that the business effect being studied does not exist.

  1. A

    True

  2. B

    False

08
Fill in the blank
1 point

If plausible changes in uncertain inputs can change which business alternative is preferred, the recommendation is .

09
Choose one
1 point

A sales regression model was fitted using prices observed between $10\$10 and $30\$30. The business wants a forecast at $100\$100. What is the most responsible response?

  1. A

    Assume the relationship will remain accurate for any value of the predictor

  2. B

    Avoid predictions far beyond the range of the observed data

  3. C

    Use the model's association as proof of causation

  4. D

    Ignore residual patterns if the model produces a forecast

10
Choose all
1 point

A manager is using a statistical test to decide whether to change a service process. Which considerations support a responsible business interpretation? Select all that apply.

  1. A

    Assess whether the estimated effect is large enough to matter to the business

  2. B

    Consider the uncertainty shown by confidence intervals

  3. C

    Treat statistical significance as sufficient evidence of business importance

  4. D

    Examine the study design and the costs of false alarms or missed opportunities

11
Open ended
1 point

A company is choosing between two investments. Investment X has a 0.20.2 probability of paying $200,000\$200{,}000 and a 0.80.8 probability of losing $20,000\$20{,}000. Investment Y guarantees a gain of $18,000\$18{,}000. The company cannot absorb a $20,000\$20{,}000 loss without breaching its operating cash requirement. Which investment should it choose? Explain using both expected monetary value and the stated constraint.

12
Choose one
1 point

A business's transaction amounts include a few unusually large purchases that pull the average upward. Which measure of a typical transaction is generally less affected by those extreme values?

  1. A

    The mean

  2. B

    The median

  3. C

    The range

  4. D

    The standard deviation

13
Choose one
1 point

A business is deciding whether to expand capacity. Which item is a possible state of the world rather than a decision alternative, constraint, or consequence?

  1. A

    Choosing whether to expand capacity

  2. B

    The level of customer demand next quarter

  3. C

    The budget allocated to expansion

  4. D

    The profit earned under a particular outcome

14
Choose one
1 point

A retailer’s weekly sales are usually similar, but one week had exceptionally high sales. Which statement best explains why the median may better represent a typical week than the mean?

  1. A

    The mean is always less affected by extreme values than the median.

  2. B

    The median is useful only when every observation is identical.

  3. C

    The median is less affected by unusually large or small values than the mean.

  4. D

    The mean and median always describe different parts of a data set.

15
Choose one
1 point

A company surveys a random selection of customers, but many selected customers do not respond. What is an important reason to be cautious about using the survey results?

  1. A

    Nonresponse may make the estimate misleading if respondents differ from nonrespondents.

  2. B

    A precise-looking estimate is reliable even when the sample has poor coverage.

  3. C

    A small sample eliminates selection effects.

  4. D

    Nonresponse affects sample size but cannot affect the conclusion.

16
Choose one
1 point

A firm compares two plans for a project and has already paid for research that cannot be recovered. How should that past expense be handled in the comparison?

  1. A

    Count every past and future expense equally.

  2. B

    Include only benefits and ignore costs.

  3. C

    Treat an unrecoverable past expense as a benefit of continuing.

  4. D

    Compare alternatives using consequences that change between them, excluding unrecoverable sunk costs.

17
Written response
1 point

What statistical term describes a range of plausible values for an estimate under the assumptions of the method?

18
Written response
1 point

A store records 12, 15, and 18 orders on three days. What is the mean number of orders per day?

19
True or false
1 point

True or false: Under the test assumptions, a small p-value is evidence against the null hypothesis, but it is not the probability that the null hypothesis is true.

  1. A

    True

  2. B

    False

20
Written response
1 point

A retailer fits a regression model using observational data and finds that sales vary with price after accounting for other measured factors. What does the fitted relationship establish on its own?