Institute for Technology & Management

Decision Sciences I
Endterm Exam batch 2015- 2017
Batches : PGDM , GLC-HR,GLC-RMM, GLC IB

Max Time: 2.30 hrs Max Marks: 60

Note:    Question 1 is compulsory  (10 marks)
 Attempt any 5 questions  from remaining(10 marks each).
 Calculators are permitted
 Graph papers will be provided

Q1.     A  8  year  study  conducted   by  the American  Heart  Association  provided  data   on  
how age and  blood pressure relate to the risk of strokes. Assume that the  following
data are from a portion of this study. Risk is interpreted as the probability (times   100)   that
the patient will have a stroke over the next 10­year period. 
Risk Age Pressure
12 57 152
24 67 163
13 58 155
56 86 177
28 59 196
51 76 189
18 56 155
37 59 207

a) Develop an estimated regression equation that relates risk of a stroke to the 
person's age,and  blood pressure,
b) Use  a  = .05 and explain Is the relation significant? (F value for   a  @.05=
5.79, a @.10= 3.78, a @.025= 8.43, a @.01= 13.27
c) What is the probability of a stroke over the next 10 year for Art Speen, a 68­
year­old smoker who has blood pressure of 175? What action might the 
physician recommend for this patient?

Q2. Travel + Leisure magazine presented its annual list of the 500 best hotels in the  
world (Travel + Leisure, January 2009). The magazine provides a rating for each  
hotel along with a brief description that includes the size of the hotel, amenities, and
the cost per night for a double room. A sample of 12 of the top­rated hotels in the 
United States follows.
 Hotel Location Rooms Cost/Night
Boulders Resort & Spa Phoenix, AZ 220 499
Disney's Wilderness Lodge Orlando, FL 727 340
Four Seasons Hotel Beverly Hills Los Angeles, CA 285 585
Four Seasons Hotel Boston, MA 273 495
Hay­Adams Washington, DC 145 495
Inn on Biltmore Estate Asheville, NC 213 279
Loews Ventana Canyon Resort Phoenix, AZ 398 279
Mauna Lani Bay Hotel Island of Hawaii 343 455
Montage Laguna Beach Leguna Beach, CA 250 595
Sofitel Water Tower Chicago, IL 414 367
St. Regis Monarch Beach Dana Point, CA 400 675
The Broadmoor Colorado Springs, CO 700 420

a) What is the mean number of rooms?
b) What is the mean cost per night for a double room?
c) Develop a scatter diagram with the number of rooms on the horizontal axis 
and the number of rooms and the cost per night? Discuss.
d) What is the sample correlation coefficient? What does it tell you about the  
relationship between the number of rooms and the cost per night for a double
room? Does this appear reasonable? Discuss.
Q3. Refer to the gasoline sales time series data given below and answer the questions.
Week Sales (1000s of Week Sales (1000s of gallons)
gallons)
1 17 7 20
2 21 8 18
3 19 9 22
4 23 10 20
5 18 11 15
6 16 12 22

  Using a weight of ½ for the most recent observation. 1/3 for the second most   recent
observation,   and   1/6   for   third   most   recent   observation,   compute   a   three­week   moving
average .

Q4. A. Information   about   mutual   funds   provided   by   Morning   star   Investment   Research
includes the  type of mutual fund (Domestic Equity, International Equity, or Fixed Income)
and the  Morning star rating for the fund. The rating is expressed from 1­star (lowest
rating) to 5­star  (highest   rating).   A   sample   of   25   mutual   funds   was   selected   from
Morning star Funds 500  (2008). the following counts were obtained:
● Sixteen mutual funds were Domestic Equity funds.
● Thirteen mutual funds were rated 3-star or less.
● Seven of the Domestic Equity funds were rated 4-star.
 ● Two of the Domestic Equity funds were rated 5-star.

Assume that one of these 25 mutual funds will be randomly selected in order to learn more
about the mutual fund and its investment strategy.
a) What is the probability of selecting a Domestic Equity fund?
b) What is the probability of selecting a fund with a 4-star or 5-star rating?
c) What is the probability of selecting a fund that is both a Domestic Equity fund and a
fund with a 4-star or 5star rating?
d) What is the probability of selecting a fund that is a Domestic Equity fund or a fund
with a 4-star or 5-star rating?

B. An average of 15 aircraft accidents occur each year (The World Almanac and Book of Facts,
2004)
a) Compute the mean number of aircraft accidents per month.
b) Compute the probability of no accidents during a month.
c) Compute the probability of exactly one accident during a month.
d) Compute the probability of more than one accident during a month.

Q5. A national study by Harris Interactive, Inc., evaluated the top technology companies
and  their   reputations.   The   following   shows   how   10   technology   companies   ranked   in
reputation  and how the companies ranked in percentage of respondents who said they
would purchase  the company's stock. A positive rank correlation is anticipated because
it seems reasonable to   expect   that  a  company   with   a  higher  reputation  would   have   the
more desirable stock to  purchase.
Company Reputation Stock Purchase
Microsoft 1 3
Intel 2 4
Dell 3 1
Lucent 4 2
Texas Instruments 5 9
Cisco Systems 6 5
Hewlett-Packard 7 10
IBM 8 6
Motorola 9 7
Yahoo 10 8
a) Compute the rank correlation between reputation and stock purchase.
b) Test for a significant positive rank correlation. ?
c) At a = .05, what is your conclusion?(T value for  a @.05 =1.86 ,a @.025 =
2.306).
Q6. The following data were used to construct the histograms of the number of days  
required to fill orders for Dawson Supply. Inc., and J.C. Clark Distributors. 

Dawson Supply Days for Delivery : 11 10 9 10 11 11 10 11 10 10
Clark Distributors Days for Delivery: 8 10 13 7 10 11 10 7 15 12

Use   the   range   and   standard   deviation   to   support   the   previous   observation   that  
 Dawson Supply provides the more consistent and reliable delivery times.

Q7. A shortage of candidates has required school districts to pay higher salaries and offer
extras to attract and retain school district superintendents. The following data show 
the annual base salary ($1000s) for superintendents in 20 districts in the greater  
Rochester, New York, area
(The Rochester Democrat and Chronicle, February 10, 2008)
187 184 174 185
175 172 202 197
165 208 215 164
162 172 182 156
172 175 170 183

Use classes of 150­159, 160­169, and so on in the following.
a) Show the frequency distribution.
b) Show the percent frequency distribution.
c) Show the cumulative percent frequency distribution.
d) Develop a histogram for the annual base salary.
e) Do the data appear to be skewed? Explain.
f) What percentage of the superintendents make more than $200,000?

Q8. The average waiting time for a patient at an E1 Paso physician's office is just over 29 
minutes, well above the national average of 21 minutes. In fact, E1 Paso has the  
longest physician's office waiting times in the United States (E1 Paso Times, January 
8, 2012). In order to address the issue of long patient wait times, some physician's 
offices are using wait tracking systems to notify patients of expected wait times.  
Patients can adjust their arrival times based on this information and spend less time 
in waiting rooms. The following data who wait times (minutes) for a sample of  
patients at offices that do not have an office tracking system and wait times for a  
sample of patients at offices with an office tracking system.
Without Wait With Wait
Tracking System Tracking System
24 31
67 11
17 14
20 18
31 12
44 27
12 9
23 13
16 12
37 15

a) What are the mean ,variance and standard deviation patient wait times for
offices with a wait  tracking system? What are the mean ,variance and standard deviation
patient wait times for offices without a wait tracking system?
b) Do offices with a wait tracking system have shorter patient wait times than 
offices without a wait tracking system? Explain.
c)      Considering only offices without a wait tracking system, what is the z­score 
          for the tenth patient in the sample?
d)Considering only offices with a wait tracking system, what is the z­score for 
the sixth patient in the sample? How does this z­score compare with the z­
score you calculated for part (c)?

Q9 A. What is the difference between descriptive and inferential statistics? Support it   with
examples? 

B. Write the correct option only: 
1. When the assumption of equally likely outcomes is used to assign probability values, the method used to
assign probabilities is referred to as the
a. relative frequency method
b. subjective method
c. probability method
d. classical method

2. The following linear trend expression was estimated using a time series with 17 time periods.
Tt = 129.2 + 3.8t
The trend projection for time period 18 is
a. 68.4
b. 193.8
c. 197.6
d. 6.84

3. In regression analysis, the unbiased estimate of the variance is

a. coefficient of correlation
b. coefficient of determination
c. mean square error
d. slope of the regression equation
3.

4. 23. In a regression analysis, the coefficient of determination is 0.4225. The coefficient of correlation in
this situation is
a. 0.65
b. 0.1785
c. any positive value
d. any value
5.  Data
a. are always be numeric
b. are always non numeric
c. are the raw material of statistics
d. None of these alternatives is correct.

Best of Luck