COM Data Analysis & Decision Making 3 — Questions and Answers
Question 1: Which framework helps operations managers evaluate decisions under uncertainty by assigning probabilities to outcomes?
- SWOT analysis
- Expected value analysis (Correct answer)
- Benchmarking
- Value stream mapping
Correct answer: Expected value analysis
Expected value analysis multiplies each outcome's value by its probability and sums the results to identify the best decision under uncertainty.
Question 2: A Six Sigma team calculates a process capability index (Cpk) of 0.85. What does this indicate?
- The process exceeds customer specifications
- The process is barely capable and produces defects outside specification limits (Correct answer)
- The process is perfectly centered
- No further improvement is needed
Correct answer: The process is barely capable and produces defects outside specification limits
A Cpk below 1.0 indicates the process is not capable of consistently meeting specification limits, resulting in out-of-spec output.
Question 3: In regression analysis used for operations forecasting, what does the R-squared value measure?
- The slope of the regression line
- The proportion of variance in the dependent variable explained by the model (Correct answer)
- The number of data points required
- The margin of error in predictions
Correct answer: The proportion of variance in the dependent variable explained by the model
R-squared indicates how well the independent variables explain variation in the dependent variable, ranging from 0 (no fit) to 1 (perfect fit).
Question 4: A cost-benefit analysis for a new warehouse automation system shows a payback period of 4.2 years. Management's threshold is 3 years. What is the correct decision?
- Approve the project because ROI is still positive
- Reject the project as it does not meet the payback threshold (Correct answer)
- Defer the decision until interest rates change
- Approve only if a competitor has adopted the same system
Correct answer: Reject the project as it does not meet the payback threshold
If the calculated payback period exceeds the organization's maximum acceptable threshold, the project does not meet the financial decision criteria.
Question 5: What is the primary purpose of a fishbone (Ishikawa) diagram in operations data analysis?
- Track production volumes over time
- Visually categorize potential causes contributing to a specific problem (Correct answer)
- Prioritize projects by return on investment
- Map the flow of materials through a facility
Correct answer: Visually categorize potential causes contributing to a specific problem
A fishbone diagram organizes potential causes of a problem into categories (people, process, equipment, etc.) to support structured root cause analysis.
Question 6: Which data sampling method is most appropriate when an operations manager needs representative data from multiple production shifts?
- Convenience sampling
- Stratified random sampling (Correct answer)
- Simple random sampling
- Judgment sampling
Correct answer: Stratified random sampling
Stratified random sampling divides the population into subgroups (strata) such as shifts, then randomly samples from each, ensuring representation.
Question 7: A manager must choose between two supply chain strategies with different risk profiles. Which decision-making tool maps outcomes across multiple sequential choices?
- Scatter diagram
- Decision tree (Correct answer)
- Run chart
- Affinity diagram
Correct answer: Decision tree
A decision tree diagrams sequential choices and their probabilistic outcomes, allowing managers to calculate expected values along each branch.
COM Data Analysis & Decision Making 3
Which framework helps operations managers evaluate decisions under uncertainty by assigning probabilities to outcomes?