Exam 28: Using Statistics for Decision Making

Use the following to answer the question(s) below. The time series graph below shows annual sales figures (in thousands of dollars) for a well known department store chain. -The dominant time series component in these data is

A producer of specialty products uses a variety of natural and man-made materials to make unique countertops for kitchens and baths. One product line mixes concrete and natural river stone to make countertops that are polished to a high shine revealing unique patterns. Occasionally coarse sand will result in undesirable pitting and rough spots on surfaces. Consequently, as part of its quality control efforts, 8 by 4 metre polished slabs are checked periodically for imperfections. For each slab inspected the number of imperfections (pits, rough spots, etc.) is recorded. If the average number of imperfections per 8 by 4 metre polished slab is 2.6, the control limits for the appropriate control chart are

By design, a required dimension on a part is 0.575 cm plus or minus 0.008 cm. Assume that the process producing this part is stable with a mean of 0.579 cm and standard deviation of 0.002 cm. What is the Cp index?

A producer of specialty products uses a variety of natural and man-made materials to make unique countertops for kitchens and baths. One product line mixes concrete and natural river stone to make countertops that are polished to a high shine revealing unique patterns. Occasionally coarse sand will result in undesirable pitting and rough spots on surfaces. Consequently, as part of its quality control efforts, 8 by 4 metre polished slabs are checked periodically for imperfections. For each slab inspected the number of imperfections (pits, rough spots, etc.) is recorded. What type of control chart should be used for these data?

In order to achieve higher levels of customer satisfaction, a company begins monitoring the complaint resolution process of its customer service representatives. As a first step, the company decides to collect data on the number of unanswered calls out of the first 250 incoming calls to its call centre made each day. At the end of monitoring 25 days, it was found that a total of 500 incoming calls went unanswered. The control limits for the p chart of these data are

An automatic filling process is used to dispense hand sanitizer into small purse size bottles. The target weight is 75 ml. The company has initiated control charting to stabilize and improve the automatic filling process. For each of twenty-five samples consisting of four bottles, the contents were measured and the mean weight and range were determined. The average of the means across all samples was found to be 72.5 ml. and the average range was 2.75 ml. The control limits for the R chart are

Use the following to answer the question(s) below. As a result of the financial crisis in the fall of 2008, when the government intervened to help the economy, an investor was considering various strategies for her money and the estimated profits would depend on how successful the intervention would be in helping the economy. The estimated annual return for two different investment strategies are shown in the following table. -The expected value of perfect information is

The minimax choice

Machine oil is used by clothing manufacturers to lubricate and protect sewing machines. A company that produces machine oil must ensure that the viscosity of its product meets customer requirements. Consequently, the viscosity of every batch of oil produced is measured. Suppose that the process mean is 101 cP and the process standard deviation is 1.50 cP. What are the limits for a runs chart to be used to see that the process remains control?

Quarterly returns were forecasted for a mutual fund made up of technology stocks. The forecast errors for the last six quarters are as follows: -0.47, 1.12, -0.85, 1.27, 0.07, and -0.05. The MAD based on these forecast errors is

Machine oil is used by clothing manufacturers to lubricate and protect sewing machines. A company that produces machine oil must ensure that the viscosity of its product meets customer requirements. Consequently, the viscosity of every batch of oil produced is measured. Suppose that the process mean is 101 cP and the process standard deviation is 1.50 cP. What type of chart should be used to ensure the process remains in control?

Use the following to answer the question(s) below. The time series graph below shows annual sales figures (in thousands of dollars) for a well known department store chain. -Which model would be most appropriate for forecasting this series?

The minimin choice strategy is

Use the following to answer the question(s) below. The monthly returns on a social choice portfolio comprised of "green" companies are shown below for the last six months of 2015. Month Monthly Return July 2.2 % August 2.5 September 1.8 October 1.4 November 1.1 December 1.9 -The forecasted monthly return for January 2016 using a three-month moving average is

Use the following to answer the question(s) below. Sunny Side Condominiums recently purchased land outside of Toronto and is trying to decide the size complex it should build (large or small). The following payoff table (in thousands of dollars) considers three possible levels of demand. -If there is a 45% chance that the demand level will be low, 30% that it will be medium and 25% chance that it will be high, the expected value (in thousands of dollars) associated with the best action is

Machine oil is used by clothing manufacturers to lubricate and protect sewing machines. A company that produces machine oil must ensure that the viscosity of its product meets customer requirements. Consequently, the viscosity of every batch of oil produced is measured. Suppose that the process mean is 101 cP and the process standard deviation is 1.50 cP. What is the Cpk index if the customer specifications require viscosity of the machine oil to be 100 cP ± 4.5 cP?

An automatic filling process is used to dispense hand sanitizer into small purse size bottles. The target weight is 75 ml. The company has initiated control charting to stabilize and improve the automatic filling process. For each of twenty-five samples consisting of four bottles, the contents were measured and the mean weight and range were determined. The average of the means across all samples was found to be 72.5 ml. and the average range was 2.75 ml. The estimated process standard deviation is

An automatic filling process is used to dispense hand sanitizer into small purse size bottles. The target weight is 75 ml. The company has initiated control charting to stabilize and improve the automatic filling process. For each of twenty-five samples consisting of four bottles, the contents were measured and the mean weight and range were determined. The average of the means across all samples was found to be 72.5 ml. and the average range was 2.75 ml. The control limits for the x-bar chart are

Use the following to answer the question(s) below. Sunny Side Condominiums recently purchased land outside of Toronto and is trying to decide the size complex it should build (large or small). The following payoff table (in thousands of dollars) considers three possible levels of demand. -What is the expected value of perfect information?

Use the following to answer the question(s) below. As a result of the financial crisis in the fall of 2008, when the government intervened to help the economy, an investor was considering various strategies for her money and the estimated profits would depend on how successful the intervention would be in helping the economy. The estimated annual return for two different investment strategies are shown in the following table. -The standard deviation associated with the investment strategy of allocating 80% to stocks and 20% to bonds is