# QSO 510 Final Exam Problems

QSO 510 Final Exam

Directions:
This exam consists of 5 problems and is an open-book exam with no time limit. All
work should be done individually. Word-process your solutions within this
template and show all steps used in arriving at the final answers. Incomplete
solutions will receive partial credit. Copy and paste all necessary data from
Excel into this document and create tables as needed.

Problem 1
Suppose a manufacturing
company makes a certain item. The time to produce each item is normally
distributed around a mean of 27 minutes with a standard deviation of 2.5
minutes. Thus, the population of production times is normal in shape. Find the
mean and standard deviation of the sample.
Sample size is 100.

Problem 2
The
average prices for a product in 12 stores in a city are shown below.

\$2.99, \$2.85, \$3.25, \$3.55, \$3.00, \$2.99,
\$2.76, \$3.50, \$3.20, \$2.85, \$3.75, \$3.85

Test
the hypothesis that the average price is higher than \$2.87. Use level of
significance a
= 0.05.

Problem
3
A store wishes to predict net profit as
a function of sales for the next year. The following table gives the years 1998
to 2005.

Year

Sales
(thousands
of dollars)

Net
Profit

1998

51

5

1999

55

10.2

2000

65

9.6

2001

82

-3

2002

75

2.8

2003

71

3.2

2004

82

-2.3

2005

81

-2.6

(a) Graph
the points from 1998 through 2005 on a scatter diagram using Sales as the
independent variable and Net Profit as the dependent variable.

(b) Draw
the regression line on the graph you constructed in Part (a).
(c) What
is the value of the coefficient of determination for this regression model?
Comment on the strength of the regression line for this model.
(d) What
is the predicted net profit for 2006 if sales are expected to be 125?

Problem 4

Last
weekâs sales of iMac computers at an Apple Store in Oklahoma City, OK, are
shown in the following table:

Day

Sales
(Dollars)

1

180

2

150

3

210

4

225

5

195

6

190

7

230

Use the 3-day moving average method for
forecasting days 4â7..25in;’=”” list=”” lfo1;=””>Use
the 3-day weighted moving average method for forecasting days 4â7. Use Weight 1
day ago = 2, Weight 2 days ago = 4, and Weight 3 days ago = 3..25in;’=”” list=”” lfo1;=””>Compare
the techniques using the mean absolute deviation (MAD).Problem
5
The following table shows six years of average annual cost-of-living
index data:

Year

Annual Cost of Living Index

2005

98.2

2006

101.3

2007

103.7

2008

105.8

2009

111.4

2010

121.9

2011

134.3

2012

128.6

2013

125.2

Forecast the average annual cost
of living index for all years from 2008 to 2013. Use a 3-year weighted moving
average with weights of 0.5, 0.3, and 0.2. Use the largest weight with the most
recent data.Forecast the average annual cost
of living index using exponential smoothing with ? = 0.7 for all years
from 2008 to 2014. Use the rate for 2008 as the starting forecast for 2008.Here,Which of the methods in
parts (a) and (b) produces better forecasts for the 3 years from 2011 to 2013?

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