Exam 1 Practice-Problems PDF

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Dr. Newby ISDS 361B

CALIFORNIA STATE UNIVERSITY, FULLERTON INFORMATION SYSTEMS & DECISION SCIENCES

ISDS-361B: Business Analytics II

EXAM 1 REVIEW & PRACTICE PROBLEMS IMPORTANT - You MUST use a desktop or a laptop computer to take your exam. - You MUST use Chrome web browser with Protorio extension installed. - You MUST have a webcam, either internal or external to your computer. - Make sure to have your system setup by successfully completing the “Extra credit for Testing Protorio” in Week 6, Exam 1 block on your course website before the scheduled exam date. Exam components - Online examination, 75 minutes. - Exam 1 will be made available on Titanium on the date and time your exam is scheduled. - Exam 1 will be proctored by Proctorio. - There are 25 exam questions - Exam questions include multiple choice, true and false, selection, matching questions, and open-ended questions. - Exam 1 is worth 25% of the course grade. - The total available score for Exam 1 is 26% (25% + 1% extra credit) Readings (textbook): - Chapter 1, sections 1-5 - Chapter 2, section 8 - Chapter 3, sections 2-3 - Chapter 7, sections 1-6 - Chapter 8, sections 1-5 Others: - This exam is open notes - You will use Microsoft Excel to solve various calculation problems.

Dr. Newby ISDS 361B

EXAM 1 PRACTICE PROBLEMS Problem 1 A survey conducted by a research team was to investigate how the education level, tenure in current employment, and age, are related to annual income. A sample of 25 employees is selected and the data are given in the Incomes tab in the 361B Exam 1 Practice Problems.xlsx file. Using the data provided, the research team wants to investigate how the education level, tenure in current employment, and age, are related to annual income. To do this, using the 0.05 level of significance, you are to answer the following 5 questions: a. Determine the estimated multiple linear regression equation that can be used to predict the annual income given the number of years of school completed (Education), length of tenure in current employment, and age. b. Are all of the independent variables significant in the regression model (in part a)? If not, which variable(s) is not significant? Show evidence. c. Is it justifiable to remove the insignificant variable(s) from the original model? Give your justifications and include the revised model in your answer. d. Examine the overall significance of the regression relationship of the revised model (part c). What is the conclusion at the 0.05 level of significance? e. How much variation in annual income can be explained by the revised model (part c)? Explain. **Make sure you know how other important characteristics of multiple regressions analysis such as interpretation of the coefficient values of the estimated regression model, performing a multicollinearity test and interpretation of the results, interpretation of variance and the relationships of the overall significance of the regression model.

Dr. Newby ISDS 361B

Problem 2 The Conde Nast Traveler Gold List for 2012 provided ratings for the top 20 small cruise ships (Conde Nast Traveler website, March 1, 2012). The data, given in the Cruise Ships tab in the 361B Exam 1 Practice Problems.xlsx file, are the scores each ship received based upon the results from the company’s annual Readers’ Choice Survey. Each score represents the percentage of respondents who rated a ship as excellent or very good on several criteria, including Itineraries/Schedule, Shore Excursions, and Food/Dining. An overall score was also reported and used to rank the ships. The highest ranked ship, the Seabourn Odyssey, has an overall score of 94.4, the highest component of which is 97.8 for Food/Dining. Using the data provided, and using the 10% level of significance, you are to answer the following 5 questions: a. Determine the estimated multiple linear regression equation that can be used to predict the overall score given the scores for Itineraries/Schedule, Shore Excursions, and Food/Dining. b. From the estimated multiple linear regression equation (part a) is there potential of multicollinearity? Show evidence and justifications. c. Use the t-test to determine the significance of each independent variable in the regression model (in part b)? Which variable(s) is significant and which variable(s) is not significant? Show evidence. d. Remove any independent variable that is not significant from the estimated regression model (part c) and rerun your model. What is your recommended estimated regression model? Give your justifications. e. Use the F test to determine the overall significance of the regression relationship of the recommended model (part d). What is the conclusion at the 0.10 level of significance?

Dr. Newby ISDS 361B

Problem 3 Given in the Wangdoodles tab in the 361B Exam 1 Practice Problems.xlsx file are the monthly actual sales of Wangdoodles Inc. for the month of December of one year and the first six months of the following year. Also given are three sets of forecast numbers: • F(1): the Naïve (last period) technique. • F(2): an exponentially smoothed average with  = 0.20. • F(3): a three-month moving average Where necessary, answer in 2 decimal points a. State your initial observation of the monthly actual sales data. b. Using α = .01, is there evidence of a trend? Show evidence. c. What type of model is this time series? d. Fill in July's forecasted sales, using each of the three forecasting techniques. e. Which of the three forecasting methods is best for the data? Why? f. For forecast 2, F(2), is a smoothing constant of 0.2 or 0.3 better for the sales data? Explain....