OM Data Analysis & Decision Making 3 — Questions and Answers
Question 1: Which statistical measure is MOST resistant to the influence of extreme outliers when describing the central tendency of a data set?
- Mean
- Median (Correct answer)
- Mode
- Range
Correct answer: Median
The median is the middle value and is not mathematically affected by extreme outliers the way the mean is.
Question 2: An organization conducts a survey and finds that employee satisfaction scores have a standard deviation of 0.5 on a 10-point scale. What does this indicate?
- Responses are widely dispersed around the mean
- Responses are tightly clustered around the mean (Correct answer)
- The mean score is 0.5
- The survey instrument is unreliable
Correct answer: Responses are tightly clustered around the mean
A low standard deviation (0.5 on a 10-point scale) indicates that most responses are close to the average score.
Question 3: A manager must choose between two vendors using a weighted decision matrix. Vendor A scores higher on quality (weight 40%) but lower on cost (weight 60%). Vendor B scores higher on cost but lower on quality. Which factor determines the final recommendation?
- The vendor with the highest unweighted average score
- The vendor with the highest total weighted score (Correct answer)
- The vendor that scores highest on the highest-weight criterion alone
- The vendor preferred by the most decision makers
Correct answer: The vendor with the highest total weighted score
A weighted decision matrix calculates a total score by multiplying each criterion score by its weight and summing; the vendor with the higher total wins.
Question 4: Which forecasting method uses historical data patterns—including trend, seasonality, and cyclical components—to project future values?
- Delphi method
- Time-series analysis (Correct answer)
- Scenario planning
- Benchmarking
Correct answer: Time-series analysis
Time-series analysis decomposes historical data into its components (trend, seasonality, cycles) to generate quantitative forecasts.
Question 5: In hypothesis testing, a Type I error occurs when a manager:
- Fails to reject a false null hypothesis
- Rejects a true null hypothesis (Correct answer)
- Accepts an alternative hypothesis that is actually false
- Uses an incorrect significance level
Correct answer: Rejects a true null hypothesis
A Type I error (false positive) means rejecting a null hypothesis that is actually true, often controlled by setting the alpha significance level.
Question 6: An operations manager uses a control chart to monitor a manufacturing process. The chart shows several consecutive data points on one side of the centerline but within control limits. This pattern is called:
- Random variation
- A run, indicating a non-random pattern (Correct answer)
- An outlier event
- Seasonal fluctuation
Correct answer: A run, indicating a non-random pattern
A run of consecutive points on one side of the centerline signals a non-random shift in the process even if no individual point violates control limits.
Question 7: When using regression analysis to forecast demand, R-squared (R²) is reported as 0.15. What does this indicate about the model?
- The independent variable explains 85% of the variance in demand
- The independent variable explains only 15% of the variance in demand (Correct answer)
- The model has a 15% error rate
- The model is statistically significant at the 15% level
Correct answer: The independent variable explains only 15% of the variance in demand
R² = 0.15 means only 15% of the variation in the dependent variable is explained by the model, indicating a weak fit.
OM Data Analysis & Decision Making 3
Which statistical measure is MOST resistant to the influence of extreme outliers when describing the central tendency of a data set?