# C207 Study Guide

A general direction in which something is developing or changing is a

Trend

Verifies if multiple populations of data are the same or at least one is different than the others.

ANOVA

Describes results that go up and down periodically, but don't necessarily follow the calendar.

Cyclicality

Assumes that the variance of a dependent variable is consistent across the range of values.

Homoscedasticity

The midpoint value of a group of measurements

median

A group of observations that have something in common

Autocorrelation

The average of a group of measurements

mean

The assumption that the variance of a dependent variable change across the range of values

Heteroscedasticity

In an equation, the value of the ___ is calculated from the value of the other variables.

statistical population

Occurs when there is a one-time unusual measurement in a process

Outlier

_____________ describes variability in a process that occurs at the same time of year each year.

Seasonality

______________ describes events whose probability of occurring depends upon the events that occurred previously.

Dependent variable

______________ describes the variability that occurs in events for which we have no explanation.

Random variation

A variable in an equation to which we can assign a specific value is the

independent variable

A(n) ___ is a measurement that is very different than other measurements of similar events.

Irregularity

The most common measurement of a group of events.

mode

There are three elementary schools in a community, and the third grade students take a standardized math test. Which tool would help us analyze whether all three of the schools' students perform similarly on this math test or whether the performance of th

ANOVA

When data tends to occur around a central value with no bias right or left, it gets close to a normal distribution. All normal distributions look like a symmetric, bell-shaped curve

Normal Distribution

Which of the following statistical tests helps us understand the probability of our being wrong if we reject the null hypothesis?

P-value

We have a situation where we have to make some decisions, interspersed with a series of events that we do not control. Which tool will help us make a better decision?

Decision Analysis

An entrepreneur has a great idea. She has researched the startup costs and cost of providing the product to potential customers, and she has researched the market and determined the price it will sell for. If the entrepreneur wants to know the minimum cap

Breakeven Analysis

A fast-food company has three products they provide their customers from the same kitchen area. They want to maximize their profits by determining the production mix that best uses their limited numbers of grills and other equipment. Which analysis tool w

Linear Programming

A company wants to provide a new service. There are three computer companies providing three different solutions to enable them to implement the new service. If they want to know which one will be least expensive at the volume of service they expect to pr

Crossover Analysis

An overall
management plan to
guarantee the
integrity of data
(The "system")

Quality Assurance

A series of analytical
measurements used to
assess the quality of the
analytical data
(The "tools")

Quality Control

Quality Control

uncovers defects so they can be fixed - Reactive-Inspection and repair

Quality Assurance

prevents defects from occurring - Proactive --Design and training

Linear Programming finds a maximum or minimum solutions in a situation that has various constraints.

True

If we are analyzing which among three equipment options for a new office would be the best choice, we might use Crossover Analysis.

True

In a Crossover Analysis considering three options, every crossover point is essential to our analysis.

True

Simulations utilize Probabilistic Inputs that represent the randomness of the real world.

True

The Average and the Mean are synonyms.

True

Regression Analysis creates a "Best Fit" line for a set of data.

True

ANOVA (Analysis of Variance) helps us determine statistical differences between groups of data.

True

Cluster Analysis is used to find groupings in a set of data.

True

Least Squares and Linear Regression are synonyms.

True

Seasonality refers to patterns that return each January.

True

A general increase in sales over time is considered a Trend.

True

Multiple Linear Regression has more than one Independent Variable.

True

Decision Analysis uses a weighted average of all possible outcomes to determine the best course of action.

True

An organized method of recording data

A check sheet

A tool that identifies process elements (causes) that
might affect an outcome

Cause-and-Effect Diagram

A graph of the value of one variable vs. another variable

Scatter Diagram

A chart with time on the horizontal axis to plot values of a statistic

Statistical Process Control Chart

A chart that describes the steps in a process

Flowchart (Process Diagram)

A graph to identify and plot problems or defects in descending order of frequency

Pareto Chart

A distribution showing the frequency of occurrences of a variable

Histogram

A table or chart that shows the strength of the
relationships between items or sets of items

Matrix diagram

Established a certification program to guarantee that organizations are dedicated to quality concepts and are continually working to ensure the highest level of quality possible. � The certification shows that an organization has a quality management syst

The International Organization for Standardization (ISO)

Results-based management is built upon a system of partnership and inclusiveness

True

An incidence rate would be useful for assessing if a treatment or preventative measure is effective in slowing the spread of a disease

True

A problem with Big Data is that there's too much of it

True

Data mining will often find trends, but overlook the underlying causes

True

The Consumer Price Index is the main measure of inflation in the U.S.

True

Z-scores always have a mean of 0 and a standard deviation of 1

True

A challenge with determining a reliability index is that it is not possible to obtain true scores

True

for a particular test, the students who scored in the top 20% got question #6 correct 80% of the time, while those who scored in the bottom 20% on the text got question #6 correct only 35% of the time. Based on item analysis, question #6 is considered a c

True

Municipal governments will often consider the payback period when evaluating a major utility project

True

Cost-benefit analyses in the Public Sector can be quite different from cost-benefit analyses in the private sector

True

A standard score is a type of norm-referenced measurement

True

The final exam for this course, in which there is a specific cut score, is an example of a criterion-referenced test

True

The GRE and GMAT are examples where Item Response Theory is applied to their tests

True

The last step of Results-Based Management

Impact

Vital to a Results-Based Management system's success

simplicity
flexibility
transparency

Takes a life-cycle approach

Results Based Management

In calculating an index number, the denominator is generally a price from

a base period

John creates an aptitude index in which he gives 60% importance to a verbal performance measure and 40% importance to a quantitative performance measure. John should create a

weighted composite index

A gender ratio is

the number of males divided by the number of females

In a small African town of 1,000 people, a total of 100 people have died of Ebola, and of these 20 have died in the last month. In this case, the prevalence and cumulative incidence of ebola in this town are

.10 and .20, respectively

Suppose that scores for a particular exam follow a standard normal distribution. Approximately what percent of the scores should fall within +/- 2 standard deviations from the mean?

95%

William scored 30 on a test with a mean of 20 and a standard deviation of 10. On a second test, he scored a 50 on a test with a mean of 35 and a standard deviation of 15. In terms of standard scores

The standard scores are the same for the two tests

Best represents a null hypothesis from an ANOVA

Ho: ?1 = ?2

During an exam, there is loud, bothersome construction work going on outside. For the resultant exam scores, this noise is likely to

introduce systematic measurement error

True Score Theory states that

in a test without systematic error, the observed score is the true score plus random error

Giving the same test to the same sample at two different times would be an example of

test-retest method

Entail data collection and analytics to evaluate the efficiency of an individual, group, or organization

Balanced Scorecard

A visual representation of multiple KPIs (shown as charts, tables, etc.)

KPI Performance Dashboard

Examines an organization's performance through four perspectives

performance measures

Quantifies the strength of a company's customer relations

Net Promoter Score

Those factors (quality, customer service, efficiency, etc.) critical to an organization achieving its goals

critical success factors

Performance measures that organizations use to quantify their level of success

Key Performance Indicators

Management compensation or bonuses are often tied to improvement in KPIs

True

KPIs can provide a directional read of performance, but changes in KPIs cannot be statistically assessed

True

In the use of a Balanced Scorecard, Variance = actual performance - target performance

True

Performance assessment should be linked to a company's strategy

True

Overall satisfaction ratings are used in deriving a Net Promoter Score

True

It is possible for a company to have a negative Net Promoter Score

True

A successful Balanced Scorecard should reflect the company's strategy

True

critical success factors for a company

meeting profit goals
increasing customer base
product/service innovation
developing employee skills

KPIs often follow SMART criteria. Which 3 of the following are part of SMART criteria?

measureable
attainable
time-bound

Most companies have a Net Promoter Score between

20 - 30

Promoters, of a Net Promoter Score, are those who provide a rating of

9 or 10

Suppose you employed analytics to determine which sales territories had shown the most profitable growth in the last four quarters and would most likely do so again in the future. You would be using which kind of analytics?

predictive

Suppose you were making a simplified representation of a complex problem in order to solve it, which stage of the Three Stage Model would you be in?

solving the problem

Bethany notices that her husband is wearing a blue sweater on Tuesday. She cannot remember what he has worn previous Tuesdays. The next Tuesday she notices he is wearing another blue sweater. She concludes that if it is Tuesday he will wear a blue sweater

Small Sample Size

Doctor Andrews has been trying to measure likelihood of heart attack risk. Doctor Andrews decides to monitor hair length in people to determine those at high risk of heart attack. What is the flaw with this experiment?

Operationalization

There is a 90 percent chance that a package will arrive within three days of when it was shipped. Also, there is a 75 percent chance that it will get wet. There is a 70 percent chance that it will get wet and will be delivered within three days. What is t

This is a union between P(ontime) and P(wet).
Therefore, P(ontime<?>wet) = P(ontime) + P(wet) - P(ontime<?>wet)
= 0.90 + 0.75 - 0.70 = 0.95 = 95%

Used to measure the spread of a data set from its average.

Standard deviation

How would a greater number of samples and a fewer number of populations affect an ANOVA analysis?

The results would be more accurate.

Mary is determining the likelihood that she will lose money on an investment. There is an expected 10 percent gain in a normally distributed dataset, with a standard deviation of 10 percent. The likelihood she'll lose money is _______ percent.

16
This is a little tricky as 68 percent of the dataset will be between a 0 and 20 percent gain. The other 32 percent is above 20 percent and below 0 percent. We care about the half that is below 0 percent, therefore half of the 32 percent outside of one

Takes information from one data set and can predict information for another data set.

Regression analysis

Jane works for a public health company. She is working on an anti-tobacco campaign and is interested in how smoking cigarettes affects a smoker's cholesterol. She could use the number of cigarettes smoked per day as her _____ variable and place it on the

independent, x

Given the break-even graph above, what does the area between the grey line (fixed costs) and the orange line (total costs) represent?

variable costs

The dependent variable increases as the

independent variable increases.

R-squared shows no correlation

when closest to 0.

R-squared shows negative correlation

when closest to -1.

Disadvantage of cluster analysis

It is a long and expensive process.

Polynomial, exponential, and logarithmic regressions are types of

non-linear relationships.

If there is a relationship between variables, but the relationship is not linear, what possible challenge with regression could it be?

Polynomial Regression

A Monte Carlo simulation runs many __________ after _________ have been made about the probability of different outcomes.

iterations, assumptions

Catherine is trying to sell a ticket to the Super Bowl. She is determining whether or not she should sell a ticket now or wait until just before the game and try and sell it then. Currently, someone is offering $350 for the ticket. From research of past p P(atSB) = (0.75) ($500) + (0.25)
($0) =$375.

How do you determine the early finish date for an activity in a network diagram?

Add the duration of the activity to the early start date.

A team has just completed its cause-and-effect diagram and now wants to decide which of the root causes that they uncovered is the key driver to focus on, as they develop a solution to their problem. What tool should they use?

an interrelationship diagraph

Your quality management processes should monitor

both the products you make and the processes you use to make them

Metrics can be used to

expose trends and to uncover root causes.

Kai's team is running an experiment to see if their ideas will work before they implement them company-wide. What step of the PDCA cycle are they in?

Do

Would be most helpful in completing quality assurance activities

training line workers to institute new testing standards

If an idea is moved more than three times during the affinity diagram sorting process

a duplicate of the idea should be created so it can be placed in both spots.

Hector has asked his team to collect data to show when and where defects occur. Now he is having problems compiling the information because the people on his team all decided to collect the data in different ways. What tool should Hector have asked his te

a check sheet

Where would you find specification limits?

on a histogram

Maximum and minimum values on a histogram that show the boundaries for acceptable results.

Specification limits

Chester is showing his team how to uncover and fix the defects that their process has produced. What is he helping his team do?

quality control

Help teams recognize and take action once a problem has happened.

Quality control activities

In results-based management (RBM), which of the following is the definition of Outcome?

The short-term effect that the outputs will have on the organization

A company's revenue is 1.4 million dollars for the year and 400 thousand dollars in the fourth quarter. The same company's costs are 1.2 million dollars for the year and 350 thousand dollars in the fourth quarter. What is the ratio of revenue to costs for

The ratio of revenue to costs for the fourth quarter of the year is 400 thousand to 350 thousand. This is simplified to 8:7. The proportion of revenue in the fourth quarter to total revenue for the year is 400 thousand to 1.4 million. This is simplified t

A measure that examines the weighted average of prices of common consumer goods and services.

Consumer Price Index (CPI)

The Consumer Price Index (CPI) is an example of a

Weighted Composite Index

The following is a list of prices for a barrel of oil over time:
20 dollars in 1990
15 dollars in 1995
27 dollars in 2000
50 dollars in 2005
75 dollars in 2010
What is the simple index number for the price of oil in 2005? Hint: the base period is 1990

The base period is 1990 when a barrel of oil cost 20 dollars. In 2005, a barrel of oil cost 50 dollars. The simple index number is (50/20)*100 = 250.

Companies A, B, and C were the three construction companies in Dedge, Minnesota in 2012. Companies A, B, and C built 9, 21, and 15 house additions in 2012, respectively. Company A went out of business after 2012 while Company C seriously expanded. No cons

The simple composite index measures data taken from many different sources and weighs all of the data equally. There were 45 house additions (9 + 21 + 15) in 2012. There were 54 house additions (25 + 29) in 2013. Therefore the simple composite index is (5

Not a fundamental element. Are actually a type of rate measuring how something has changed over time.

Index numbers

California is about 160,000 square miles. Maine is about 35,000 square miles. If California had one and a half times as many trees as Maine, then:

Trees are more prevelant in Maine as California. California is more than four times the size of Maine and, in this example, only has one and a half as many trees as Maine. Therefore, you're more likely to bump into a tree in Maine than California. Inciden

Which one of the following is criterion-referenced test?

Medical students needing to effectively give an appendectomy on a mannequin before passing their appendicitis course.

Test where the results are not based on how others do.

criterion-referenced test

The greatest variance in scores occurs if ___ percent of the class gets each question correct.

50

In the military, a cost-benefit analysis might not be easily evaluated. Because of this, the military often uses

a cost-effective analysis

Cost of achieving a goal and determines if it wants to continue with it.

cost-benefit analysis

It's important for nonprofits to find a way to measure its

success of mobilizing its resources, its employee effectiveness, and its progress on its goals.

Performance measures are used to evaluate the _______ of an individual or group by using data collection and _________.

efficiency, analytics

Appropriate key performance indicator (KPI)?

Fatality rate in pregnant woman
Average time spent in stores
Employees' amounts of sleep

A disadvantage of key performance indicators (KPIs)?

KPIs are often only a rough guide.

4 broad categories used in a balanced scorecard system are

customers, innovation and learning, financials, and internal business processes.

A company is trying to determine their net promoter score. If their net promoter score is lower than the industry average, they will begin an initiative to improve customer satisfaction. The industry average net promoter score is 12 percent. 200 people re

The net promoter score is the promoters minus the detractors. 20 percent of people (40/200) are detractors and 27.5 percent of people (55/200) are promoters. The company should begin its initiative to improve customer satisfaction.

A balanced scorecard usually has a list of objectives. In each objective a variance is shown. What is the meaning of variance when used on a balanced scorecard?

The difference between the target performance and the real performance

A company predicts 300 people to make purchases this year on Black Friday. The total number is actually 282. What is the variance? And is it favorable or unfavorable?

18, unfavorable
The variance is the actual performance minus the target performance. In this case, the actual total was lower than the target so the variance is unfavorable.

A company has a survey process for determing its net promoter score. 50 people responded to the survey with an answer between 6 and 10? How does NPS classify this group?

This is not a defined group.
Survey respondents who answer between 0 and 6 are detractors. Survey respondents who answer either 7 or 8 are passives. Survey respondents who answer either 9 or 10 are promoters.

Company A predicts 45 customer visits for the week and actually gets 50 customer visits for the week. Company B predicts a 5 percent decrease in customer visits and gets an actual decrease of 3 percent in customer visits. Is the variance for company A fav

Favorable, Favorable
Both outcomes are favorable. Company A get more customers than expected and company B did not lose as many customers as it thought it would.

What is a disadvantage of a using net promoter score in an organization?

A net promoter score system makes it difficult to determine the area of dissatisfaction.

If a company has a positive variance against its target for a performance measure, what does that mean?

The company exceeded its target performance goal.

A positive variance means that the actual performance was higher than the target.

Variance = actual performance - target performance.

Amanda is measuring the temperature. She looks at the thermometer and sees that it is somewhere between 65 and 66 degrees Fahrenheit. She is okay with the temperature in between two integers because she knows temperature is not ________ data, but temperat

Discrete, Continuous

Toby is trying to determine the number of people at today's parade in order to determine the impact of advertising at parades. He asks a number of different people leaving the parade their projected number of attendants. He gets the following responses: 7

Not Reliable or Valid

In a prioritization matrix, the weighting factor is ________the option ranking to get the weighted score for each cell in the matrix.

multiplied by

Which "new" tool shows the hierarchy of items in a graphic format where each successive step breaks things down into greater detail?

Tree diagram

Which of the following is an advantage of key performance indicators (KPIs)?

They create an internal benchmarking system for the company

A company is trying to determine their net promoter score. 100 people respond to a survey of whether they would recommend the company to a friend. On a scale from 0 to 10, 22 people answered with a 0 to 6, 45 people answered with a 7 or 8, and 33 people a

11 percent

The first stage of Davenport and Kim's Three Stage Model of quantitative decision making is to

frame the problem.

A manager is looking at his previous quarter and determining the causes for the sudden sales spike to gain a better understanding of the actions and outcomes. If using analytics, which kind of analytics would the manager use?

Descriptive Analytics

The previous quarter sales would be studied.

Descriptive Analytics

In a study of cancer treatments, the subjects and the treatment allocator (who is also the data gatherer) are unaware of which treatment is being given to which subject. This is a ____________ study.

Double-Blind

Adam is measuring the temperature as the lake outside his office is freezing over. He measures the temperatures in Fahrenheit ten times with the same thermometer and gets the following results: 20, 18, 21, 20, 20, 14, 19, 21, 20, 19. Is his thermometer re

Reliable but not Valid

The thermometer consistently gives about the same number

for the freezing point and therefore is reliable.

Harry is doing a survey of the city of Los Angeles' population. He is wondering everyone's favorite food. He sends out a survey to all of the home-owners and renters in the city and receives basically all of the surveys back in the mail. What is the flaw

Truly Representative Sample

Tom Brady is on the street in Chicago. He is asking anyone he meets if they prefer Tom Brady or Peyton Manning. The survey results show that people greatly prefer Tom Brady. What is the flaw with this experiment?

Response Bias

There is a 50 percent chance that President Clinton will slip on a banana peel. Also, there is a 25 percent chance that President Clinton will be hit in the face with an apple. There is a 10 percent chance that President Clinton will slip on a banana peel

This is a union between P(banana) and P(apple). Therefore, P(banana?apple) = P(banana) + P(apple) - P(banana?apple) = 0.50 + 0.25 - 0.10 = 0.65 = 65%. President Clinton will probably not have a great week.

There is a 20 percent chance that Charlie's company will merge with another company. If there is a merger, there is an 80 percent chance Charlie will have to fire three people from his team. If there is no merger, there is a 15 percent chance Charlie will

The probability of a merger is 20 percent (P(merger) = 0.20), and the probability of Charlie having to fire three people if there is a merger is 80 percent (P(fire|merger) = 0.80). Therefore to determine the likelihood of a merger and Charlie firing three

From the previous problem, if one were to hear that Charlie fired three people, what was the chance that there was a merger? (use Bayesian Theory)

This is where the probabilities have to be determined for firing afer a merger and firing after no merger. To determine these, the events of each have to be multiplied. For firing after a merger, P(merger?firing) = P(merger)
P(firing|merger) = 0.20
0.80 =

Devin is hoping that his law firm will have one of the highest ratings in the country. He learns that the average score is 80 and his team's score is 86. He is initially disappointed as he had hoped for greater separation between the average and his compa

The z-score, or standard score, is the difference between the individual's score and the average divided by the standard deviation. In this situation it would be (86-80) / 2.5 = 2.4. Therefore, the standard score is 2.4.

Robert is determining the likelihood that his investment will yield returns of greater than 40 percent within a year. Similar investments have averaged 12 percent yield returns per year with a standard deviation of 14 percent. What is the likelihood that

A 40 percent gain is at two standard deviations above the mean. As we know, only 4.6 percent of the population is outside of two standard deviations from the mean. Out of that 4.6 percent, half is in the tail that is two standard deviations below the mean

What percent of the data in a normal distribution is between the mean and two standard deviations above the mean?

95.4 percent of the data is located between two standard deviations below the mean and two standard deviations above the mean. Half of this data is located between the mean and two standard deviations above the mean.

Sarah is working for a non-profit trying to get malaria vaccines to the small village she is helping in Liberia. There has been a spread of malaria, and there are only two ways to get the needed hepatitis vaccines to the village in time. She could mail th

The cost of shipping 900 vaccines would be $2000 (cost =$2
900 + $200), while the cost of Sarah flying with 900 vaccines would be$1850 (cost = $0.50 900 +$1400). The difference is $150 ($2000 - \$1850).

Cluster analysis sorts data points into ___________ and is often used in studying market ____________.

natural" groups, demographics.
Cluster analysis sorts data points into "natural" groups. Often, especially in marketing, cluster analysis is used to study the behavior of people in different demographics. It is used

Where you enact the change on a larger scale, making it a part of normal operations." This is which step in the PDCA cycle?

The Act step is where you enact the change on a larger scale, making it a part of normal operations.

Which of the following answers is a step in Quality Control, not Quality Assurance?

Inspection and repair

Quality Assurance focuses on

preventing defects from occurring

A SIPOC Diagram is very helpful in following a whole process of a company. It stands for Supplier, Input, Process, Output, and _______.

Customer

Shows the hierarchy of items in a graphic format where each successive step breaks things down into greater and greater detail.

Tree diagram

The manager of an assembly plant is conducting a study examining the cost of screws. If the simple index number for screws is 400, with a base period starting one year earlier, what conclusion should an employer make?

The rising cost of screws should be studied.

George is studying the change in production of radios in the entire country over the past ten years. There were three companies that produced radios ten years ago and now there are four companies that produce radios. If George is able to get each company'

Simple Composite Index

Town A has three times as many people as Town B. Town A has twice as many people with a disease as Town B. Which town would you visit, all other things being the same, if you were to meet ten people in either town? (in other words, which town has a lower

Town A
If Town A has three times as many people but only twice as many with the disease, it means that the disease is less prevalent in Town A than Town B. Therefore, you'd be less likely to get the disease in Town A if you were to come into contact with

Which of the following could be an appropriate key performance indicator (KPI)?

Average quarterly sales

A company predicts a 4 percent gain in customer visits. There is an actual gain of 6 percent in customer satisfaction. What is the variance?

2 percent

Company Y predicts 85 sales per day for the week and actually gets 80 sales per day for the week. Company Z predicts an 8 percent decrease in total sales and gets an actual decrease of 7 percent in total sales. Is the variance for company Y favorable or u

Unfavorable, Favorable
Company Y gets fewer sales than expected, but company Z did not decrease their sales as greatly as it thought it would.

A company is trying to determine their net promoter score. 100 people respond to a survey of whether they would recommend the company to a friend. On a scale from 0 to 10, 22 people answered with a 0 to 6, 45 people answered with a 7 or 8, and 33 people a

11 percent
The net promoter score is determined by the percent of promoters minus the percent of detractors. 22 percent of people (22/100) are detractors, and 33 percent of people (33/100) are promoters.

If Katy's test score was in the 25th percentile for a class of 20 students, how many students scored below Katy?

Scoring in the 25th percentile means that a quarter of the class did worse than Katy. Therefore, five students scored below Katy.

A model of scoring that focuses on analysis of each question's answer and is often considered more useful than classical test theory.

Item Response Theory

Created when a researcher applies more weight to certain goods or services than others as they are calculating the index number. More weight gets applied to the certain goods or services based on quantity sizes or prices.

Weighted composite index

Compare an individual to other individuals. For example, a standard score is a type of

Norm-referenced tests (measurement)

Measure the distance of a piece of data from the mean compared to the entire population.

Standard Scores (z-scores)

A mathematical tool often used to find the combination of products that will maximize profits or minimize costs

Linear Programming

Data resulting from a test that accurately measures what it is intended to measure.

Valid data

When there are two or more plans or options to consider, that allows a decision maker to identify the point at which we are indifferent between the plans. It also clarifies which option is better on either side of the point.

Crossover analysis