Spreadsheet Modeling And Decision Analysis 7th Edition By Cliff Ragsdale – Test Bank

1. The essence of decision analysis is:
   1. breaking down complex situations into manageable
   2. choosing the best course of action among
   3. finding the root cause of why something has gone
   4. thinking ahead to avoid negative

ANSWER: b

2. Why would someone wish to use a spreadsheet model?
   1. To implement a computer
   2. Because spreadsheets are
   3. To analyze decision
   4. All of

ANSWER: d

3. Which of the following fields of study is defined in Chapter One as the one that “uses computers, statistics, and mathematics to solve business problems”?
   1. Accounting
   2. Information systems
   3. Business analytics
   4. Scientific management

ANSWER: c

4. In a decision-making problem, anchoring effects occur when
   1. decision makers are tied too closely to previous
   2. organizations refuse to consider new
   3. a seemingly trivial factor serves as a starting point for
   4. a person in a position of authority exerts his or her opinion very

ANSWER: c

5. Virtually everyone who uses a spreadsheet today for model building and decision making
   1. is a practitioner of business
   2. possesses an advanced knowledge of mathematics and computer programming
   3. is a
   4. is in a position to influence decision

ANSWER: a

6. Which of the following statements is true of using models in problem solving and decision analysis?
   1. It is a fairly new
   2. It is required in order to find good
   3. It is something everyone has done
   4. It is tied to the use of

ANSWER: c

7. A road map is an example of
   1. a mathematical
   2. a mental
   3. a physical
   4. a visual

ANSWER: d

8. The textbook figure of the problem-solving process is an example of a
   1. mental
   2. prescriptive
   3. graphical
   4. visual

ANSWER: d

9. Which of the following is most likely to be used when faced with the decision of how to arrange furniture in a room?
   1. Mathematical model
   2. Mental model
   3. Physical model
   4. Visual model

ANSWER: b

10. To illustrate how a complex system will be built, an engineer will likely use a
    1. mathematical
    2. mental
    3. physical
    4. visual

ANSWER: d

11. Which of the following is the type of model used throughout this textbook?
    1. Mathematical model
    2. Mental model
    3. Physical model
    4. Visual model

ANSWER: a

12. The best models
    1. accurately reflect relevant characteristics of the real-world object or
    2. are mathematical
    3. replicate all aspects of the real-world object or
    4. replicate the characteristics of a component in isolation from the rest of the

ANSWER: a

13. A mathematical model is considered to be “valid” when
    1. it accurately represents the relevant characteristics of the object or
    2. it has passed a validation
    3. it replicates all aspects of the object or
    4. the left-hand and right-hand sides of expressions are

ANSWER: a

14. All of the following are benefits of modeling except:
    1. Modeling delivers needed information on a more timely
    2. Modeling finds the right answers to incorrect or flawed problem
    3. Modeling is helpful in examining things that would be impossible to do in
    4. Modeling is less expensive than implementing several alternative

ANSWER: b

15. Better decision making due to using a modeling process is achieved due to
    1. the interaction with the
    2. the visualization of the system being
    3. the insight gained through the
    4. the timeliness of the results

ANSWER: c

16. In this text we use the term “mathematics” to encompass

1. familiar elements of math such as

1. i only
2. ii only
3. Both i and ii
4. Neither i nor ii

ANSWER: c

17. The specification or description of the relationship between the dependent and independent variables is generally called
    1. a
    2. a
    3. a
    4. a mathematical

ANSWER: c

18. Variables are termed independent when they satisfy which of the following?
    1. The function value depends upon their
    2. The decision maker has no control over
    3. The variables have no relationship to one
    4. The variable is described as an output of the spreadsheet

ANSWER: a

19. In the following expression, which is (are) the dependent variable(s)?

PROFIT = REVENUE − EXPENSES

1. Profit
2. Revenue
3. Expenses
4. (b) and (c)

ANSWER: a

20. In a spreadsheet, input cells correspond conceptually to
    1. dependent
    2. independent
    3. output

ANSWER: c

21. The categories of modeling techniques presented in this book include all of the following except:
    1. descriptive
    2. predictive
    3. prescriptive
    4. preventive

ANSWER: d

22. Consider the spreadsheet model shown in the figure This is an example of a

A

B

C

1

2

3

Purchase price

$ 32,500

4

less:

5

Down payment

$ 6,500

6

Trade-in

$ 4,000

7

Amount financed

$ 22,000

8

9

Term of loan

5 years

10

11

Annual interest rate

11.25%

12

13

Monthly payment

$ 481.08

14

1. descriptive
2. predictive
3. prescriptive
4. preventive

ANSWER: c

23. Solutions to which of the following categories of modeling techniques indicate a course of action to the decision maker?
    1. Descriptive models
    2. Predictive models
    3. Prescriptive models
    4. Preventive models

ANSWER: c

24. In which of the following categories of modeling techniques do the independent variables have unknown or uncertain values or coefficients?
    1. Descriptive models
    2. Predictive models
    3. Prescriptive models
    4. Probabilistic models

ANSWER: a

25. In which of the following categories of modeling techniques are the specifications of the relationships between dependent and independent variables unknown or ill-defined?
    1. Descriptive models
    2. Open models
    3. Predictive models
    4. Prescriptive models

ANSWER: c

26. Which of the following categories of modeling techniques includes optimization techniques?
    1. Capitalistic models
    2. Descriptive models
    3. Predictive models
    4. Prescriptive models

ANSWER: d

27. Which of the following categories of modeling techniques includes simulation?
    1. Descriptive models
    2. Predictive models
    3. Prescriptive models
    4. Scale models

ANSWER: a

28. Which of the following categories of modeling techniques includes discriminant analysis?
    1. Biased
    2. Descriptive
    3. Predictive
    4. Prescriptive

ANSWER: c

29. To be effective, a modeler must
    1. be an effective presenter of
    2. collect the proper input data for the
    3. understand how modeling fits into the problem-solving
    4. apply the correct modeling

ANSWER: c

30. Identifying the real problems faced by the decision maker
    1. is not important since the decision maker has already defined the
    2. requires insight, some imagination, time and a good bit of detective
    3. first requires a well-defined problem
    4. will lead to developing the best

ANSWER: b

31. The ultimate goal of the problem identification step of the problem-solving process is
    1. collecting lots of
    2. helping the decision maker realize there is a
    3. identifying the root problem or problems causing the
    4. convincing the decision maker the mess is really a problem that can be

ANSWER: c

32. Which step of the problem-solving process is considered the most important?
    1. Identify
    2. Analyze
    3. Test
    4. Implement

ANSWER: a

33. Which of the following steps in the problem-solving process is most likely to incur resistance from people affected by the proposed solution?
    1. Formulate model
    2. Use model to analyze problem
    3. Test results
    4. Implement solution

ANSWER: d

34. There are a variety of problems a manager might While presenting and defending your approach, how would you complete this thought?

Several different modeling techniques are available to solve managerial decision problems,

1. the wrong choice of modeling technique is a common source of implementation
2. students should develop a strong preference and expertise in one technique so when faced with problems as managers they can formulate them as a model that can be solved by their favorite
3. fundamental characteristics of the problem guide the selection of an appropriate modeling
4. most problems faced by managers are fundamentally the

ANSWER: c

35. In which step of the problem-solving process is the main focus to generate and evaluate alternatives?
    1. Identify problem
    2. Formulate model
    3. Use model to analyze problem
    4. Test results

ANSWER: c

36. Which of the following is true of “What if?” analysis?
    1. A well-designed spreadsheet facilitates “What if?”
    2. It is not very useful when working with non mathematical
    3. “What if?” analysis is an efficient optimization
    4. “What if?” analysis is useful in creating a well-defined problem

ANSWER: a

37. Beneficial uses of the testing process include all of the following except:
    1. double checking the validity the
    2. finding that some important assumption has been left out of the
    3. giving no new insights into the nature of the
    4. improving solutions after the implementation

ANSWER: d

38. Implementing solutions to problems involves people and Which of the following is a suggested approach to effectively implement solutions?
    1. Decision-making authority centralized to those who have specialized training in decision
    2. Involve anyone affected by the decision in all steps of the problem-solving
    3. Making decisions according to majority
    4. More skillful communication of management

ANSWER: b

39. Which of the following problem-solving steps is often considered the most difficult?
    1. Identify the
    2. Analyze the
    3. Test
    4. Implement the

ANSWER: d

40. If we do not identify the correct problem, the best we can hope for is:
    1. wasted time and
    2. useful experience in problem definition
    3. a descriptive
    4. the right answer to the wrong

ANSWER: d

41. Chapter One discussed all of the following except:
    1. how models of decision problems differ in a number of important
    2. how spreadsheet modeling and analysis fit into the problem-solving
    3. how spreadsheet models of decision problems can be used to analyze the consequences of possible courses of
    4. how to implement a problem formulation as a spreadsheet

ANSWER: d

42. The Chapter One “The World of Business Analytics” case reading offers the CEO alternatives to start the OR/MS collaboration All the following are alternatives offered except:
    1. Require the OR/MS group to save their yearly salary in every
    2. Use OR/MS personnel as
    3. Hire some OR/MS professionals and give them a problem to
    4. All are recommended

ANSWER: a

43. The main point brought forward in the Chapter One “The World of Business Analytics” case reading is:
    1. At a cocktail party, it is more efficient to divide the dip into several bowls and place them around the
    2. Competitive rivalry between IS and OR/MS groups can be turned to advantage when tackling business process re-engineering
    3. Information system analysts trained in management science can help turn ordinary information systems into money-saving decision-support
    4. OR/MS professionals lack communication skills and tend to focus on “rigor without relevance”.

ANSWER: c

44. Operations Research got its start
    1. during World War
    2. with the first Univac computers in the early 1950’s.
    3. from roots in Operations
    4. from Frederick Taylor’s Scientific

ANSWER: a

45. The Chapter One “The World of Business Analytics” case reading discusses the relationship between OR/MS and IS Which of the following statements is NOT true?
    1. OR/MS analysts need IS professionals’ data for their
    2. OR/MS analysts need to take many of the IS
    3. The IS professional cannot use OR/MS tools in their
    4. The IS tools can start to recommend solutions using OR/MS

ANSWER: d

46. The goal of the modeling approach to problem solving is to
    1. help individuals make good
    2. ensure optimality of
    3. determine a set of optimal
    4. determine feasibility of

ANSWER: a

47. A situation when decision quality is good and the resulting outcome quality is good is referred to as
    1. pure
    2. deserved
    3. dumb
    4. poetic

ANSWER: b

48. A factor that plays a role in determining whether a good or bad outcome occurs is called

ANSWER: a

49. Consistently using a structured, model based process to make decisions
    1. should produce good outcomes more
    2. is less effective than making decisions in a haphazard
    3. is evidence that luck plays an important role in decision
    4. always leads to well-deserved success in managerial decision

ANSWER: a

50. In a decision-making framework presented in Chapter One, the term “poetic justice” refers to a situation when the following occur:
    1. Good decision quality and good outcome
    2. Good decision quality and bad outcome
    3. Bad decision quality and good outcome
    4. Bad decision quality and bad outcome

ANSWER: d

51. A purely rational decision maker should
    1. consistently select the same alternative, regardless of how the problem is
    2. disregard the consequences of his/her
    3. always select optimal
    4. allow emotions influence the

ANSWER: a

52. Project 1.1

Assignment: Read the assigned case. You are not expected to understand the specifics of the technique employed. Read the case to comprehend the overall goals and objectives of the effort, the general use of the techniques employed, and the results obtained. Based on your reading of the assigned article, provide short essay responses to the following questions:

1. What types of model or models were employed?

1. What was the objective of the model development and study as presented in the article?

1. What were the independent and dependent variables in the model?

1. How were these models used to improve decision making? How might these models be used to improve decision making?

1. Did the authors employ the problem-solving process as defined in Chapter One of the text and if so, what specific actions were completed within each of the steps of the process? If the problem-solving process differed, or no systematic process was discussed, what is your most reasonable estimate as to the process employed to solve the problem posed?

1. Discuss the good decision-bad outcome dilemma with respect to the situation described in the article you

1. If the authors discussed data gathering what level of effort was implied in their discussion? Do you think their effort represented a below normal, normal, or above normal level of effort with respect to data gathering and data preparation?

1. What were the final conclusions with respect to the quantitative management techniques employed?

ANSWER: Answer not provided.

53. Project 1.2

Assignment: Conduct a search of Internet news sites or trade journals for an instance of a company using a business analytics technique. Provide a short note summarizing the application, which technique was employed, and any benefits noted.

ANSWER: Answer not provided.

54. Two of the effects associated with decision problems are:
    1. anchoring and
    2. anchoring and
    3. framing and
    4. none of the answers provided is

ANSWER: a

55. Anchoring occurs when:
    1. a trivial factor is used as a starting point for estimations in a decision-making
    2. a difficult factor is incorporated in a
    3. an easy solution is obtained to a difficult
    4. obtaining a solution is

ANSWER: a

56. Framing effect refers to:
    1. how a decision maker views the alternatives in a decision
    2. how difficult the decision
    3. whether a software program can be used to obtain an optimal solution to a decision
    4. how structured the decision problem

ANSWER: a

57. In a model Y=f(x₁, x₂), Y is called:
    1. a dependent
    2. an independent
    3. a confounded
    4. a convoluted

ANSWER: a

58. In a model Y=f(x₁, x₂), x₁is called:
    1. an independent
    2. a dependent
    3. a confounded
    4. a convoluted

ANSWER: a

59. A valid model:
    1. accurately represents a decision problem being
    2. produces an optimal
    3. produces a good
    4. produces a feasible

ANSWER: a

60. Integer programming is an example of:
    1. a prescriptive
    2. a predictive
    3. a descriptive
    4. a sound

ANSWER: a

61. A situation when decision quality is good and the resulting outcome quality is bad is referred to as
    1. pure
    2. deserved
    3. bad
    4. poetic

ANSWER: c

62. A situation when decision quality is bad and the resulting outcome quality is bad is referred to as
    1. pure
    2. deserved
    3. bad
    4. poetic

ANSWER: d

63. A situation when decision quality is bad and the resulting outcome quality is good is referred to as
    1. dumb
    2. deserved
    3. bad
    4. poetic

ANSWER: a

64. In a decision-making framework presented in Chapter One, the term “dumb luck” refers to a situation when the following occur:
    1. Good decision quality and good outcome
    2. Good decision quality and bad outcome
    3. Bad decision quality and good outcome
    4. Bad decision quality and bad outcome

ANSWER: c

65. In a decision-making framework presented in Chapter One, the term “deserved success” refers to a situation when the following occur:
    1. Good decision quality and good outcome
    2. Good decision quality and bad outcome
    3. Bad decision quality and good outcome
    4. Bad decision quality and bad outcome

ANSWER: a

66. In a decision-making framework presented in Chapter One, the term “bad luck” refers to a situation when the following occur:
    1. Good decision quality and good outcome
    2. Good decision quality and bad outcome
    3. Bad decision quality and good outcome
    4. Bad decision quality and bad outcome

ANSWER: b

67. In which step of the problem-solving process is the concept of “probortunity” introduced?
    1. Identify problem
    2. Formulate model
    3. Use model to analyze problem
    4. Test results

ANSWER: a

68. Business analytics focuses on
    1. identifying and leveraging business
    2. formulating analytical
    3. using models to analyze
    4. testing and implementing

ANSWER: a

69. In order to be useful to a decision-maker, decision problems need to be

ANSWER: a

70. Business opportunities can be viewed and formulated as
    1. decision
    2. analytical
    3. empirical
    4. testing

ANSWER: a

71. The notion that every problem is also an opportunity is reflected in the term
    1. business

ANSWER: a

72. In the textbook the words “opportunity” and “problem” are
    1. used
    2. mutually

ANSWER: b

73. The approaches presented in the textbook
    1. are a subset of the total problem-solving
    2. cover the entire spectrum of decision support
    3. are
    4. are

ANSWER: a

74. The concept of “probortunity” is
    1. the first step in the problem-solving
    2. a decision support
    3. part of testing
    4. part of solution

ANSWER: a

75. If results testing produces unsatisfactory results
    1. the problem-solving process requires new formulation and
    2. minor adjustments to the existing
    3. checking the solution
    4. repeated

ANSWER: a