2 AAGBS/JULY2023/MGT782

ARSHAD AYUB GRADUATE BUSINESS

SCHOOL
UNIVERSITI TEKNOLOGI MARA
MIDTERM TEST
COURSE : MANAGERIAL BUSINESS ANALYTICS COURSE
CODE : MGT782

SEMESTER : JULY 2023

TIME : 3 HOURS
NAME : ALEALIANA BINTI AZMI
STUDENT NUM : 2022265606

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of TWO (2) questions.

2. This is an open book assessment. However, students are not allowed to copy or discuss
the answer with other students.

3. Save all answers in ONE (1) PDF file and email it to norha603@uitm.edu.my. If you have
problem to submit your answer, please inform the lecturer immediately.

4. Please answer ALL questions.

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3 AAGBS/JULY2023/MGT782
QUESTION 1 (20 MARKS)

A sample of twenty automobiles was taken, and the miles per gallon (MPG), horsepower,
and total weight were recorded.
MPG Horsepower Weight MPG Horsepower Weight

44 67 1844 26 94 2580

44 50 1998 26 88 2507

40 62 1752 25 124 2922

37 69 1980 22 97 2434

37 66 1797 20 114 3248

34 63 2199 21 102 2812

35 90 2404 18 114 3382

32 99 2611 18 142 3197

30 63 3236 16 153 4380

28 91 2606 16 139 4036

(a) Develop a linear regression model to predict MPG using horsepower as the only
independent variable. (5 marks)
(b) Develop another model with weight as the only independent variable. (5 marks)

(c) Develop a multiple linear regression model to predict MPG using horsepower. (5 marks)

(d) Based on your models developed in (a), (b) and (c), discuss the accuracy of these models?
Should one variable or both variables be included in the model? Explain your answer.

Answer: From the above table, the standard error for a 4.48, b is 4.83 and c 4.12. the lowest
standard error is C and the multiple regression is more accurate.
 (5 marks)

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 4 AAGBS/JULY2023/MGT782

QUESTION 2 (30 MARKS)

The Super Cola Company must decide whether or not to introduce a new diet soft drink.
Management feels that if it does introduce the diet soda it will yield a profit of RM1 million if
sales are around 100 million, a profit of RM200,000 if sales are around 50 million, or it will lose
RM2 million if sales are only around 1 million bottles. If Super Cola does not market the new
diet soda, it will suffer a loss of RM400,000.

(a) Construct a payoff table for this problem.

(5 marks)

(b) Construct a regret (opportunity loss) table for this problem.

(5 marks)

(c) Should Super Cola introduce the soda if the company:

(i) is pessimistic;
based on the table above, the maximin is -400000 if the diet soda is not be introduced

(ii) is optimistic;
based on the table above, the maximax in is 1000000 if the diet soda is introduced

(iii) wants to minimize its maximum disappointment (loss)?

based on the table above, the manimax is maximun regret at 1400000 if introduced the
diet soda
 (9 marks)

(d) An internal marketing research study has found that the probability of 100 million in sales
is 0.33, probability of 50 million in sales is 0.50, and probability of 1 million in sales is 0.17.
Should Super Cola introduce the new diet soda based on the expected monetary values
(EMV).

(7 marks)

(e) A consulting firm can perform a more thorough study for RM275,000. Should
management have this study performed?

(4 marks)

END OF QUESTION PAPER

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