Pre-Assessment -
Quantitative Analysis
For Business (PHFO)
Exam Questions and
Complete Solutions
Graded A+
A car stereo company is planning to introduce a new product into the market. It faces stiff competition
from two other organizations with similar products. The company's marketing manager has asked the
production manager to perform a break-even analysis using three different price points. The marketing
manager will use the results to set a price for the new product.
Which type of method is a break-even analysis?
Quantitative
Qualitative
Payback table
Expert judgment - Answer: Quantitative
Over the last three months, a small rural hospital has seen a sudden increase in the number of patients
coming to the emergency room for non-emergency treatment. The hospital administrator wants to
know why there is a sudden increase in demand and is considering three options to find out.
Classify each method available to the administrator as qualitative or quantitative.
Answer options may be used more than once or not at all. Select your answers from the pull-down list.
,Including an open-ended question on the intake form asking patients, "Please explain why you selected
this ER for treatment." Intake forms can be sorted into non-emergency and emergency categories; the
"non-emergency" responses can be analyzed to determine reasons the hospital was selected.
Group brainstorming with the nurses and doctors in the hospital to see what ideas people have for why
so many people are suddenly coming to the ER for non - Answer: 1. Qualitative
2. Qualitative
3. Quantitative
A local music store that hosts live music has been a very popular hangout for years. However, the owner
is concerned that the increasing popularity of new methods of music delivery will soon make the
business obsolete. The owner is considering building a small recording studio in the basement of the
store. The nearest professional studio is 50 miles away, so a new studio may appeal to local musicians
and increase foot traffic. The owner has all the costs of building the studio and has also estimated how
much revenue might increase due to the new studio (from studio rental fees, increased food and drink
sales if more people come to the live music shows, etc.). The owner will use this information to
determine the net present value for the studio.
Which method of analysis should this owner use to make a determination?
Qualitative
Quantitative
Decision tree
Expert judgment - Answer: Quantitative
How should quantitative analysis improve subsequent decision making for a firm that wants to
determine whether its revenue has been increasing or decreasing for the past 10 years?
It will let the company determine the average revenue it made.
It will help the company see which customers bought its items.
It will help the company see why it has been making a profit.
It will help the company see the competitors' average revenue. - Answer: It will let the company
determine the average revenue it made.
, An employee working for the Highway Safety Department in Albany, New York has the job to predict the
automobile accidents in Albany for the next year. The employee currently has monthly data on the
following variables for the city of Albany: the number of automobiles registered, the sales of alcoholic
beverages, and the rainfall in inches.
How can this employee realistically predict the accidents in Albany for next year?
Use a multiple regression equation using accident as the dependent variable and others as independent
variables
Use a multiple regression equation using automobiles registered as the dependent variable and others
as independent variables
Use the ratio of accidents versus each of the other variables and then average the three values
Use the sales of alcoholic beverages because the other variables are less - Answer: Use a multiple
regression equation using accident as the dependent variable and others as independent variables
A marketing manager for a corporation that markets a broad range of food brands needs to plan a
monthly marketing, advertising, and sales promotion budget for next year and is looking at monthly
sales. One brand shows dramatic fluctuations in sales over the past three years.
How should this manager use quantitative analysis to make budgeting decisions for this brand?
Use average sales values for all of the months over the past two years
Use last year's budget amounts regardless of average sales values
Compute quarterly averages based on each month in the quarter
Compute seasonality indices for each month to forecast next year's monthly sales - Answer: Compute
seasonality indices for each month to forecast next year's monthly sales
Y-hat = a + b 1 X 1 + b 2 X 2
The constant is 3, the b 1 coefficient is 4, the b 2 coefficient is -1, X 1 is 3, and X 2 is 6.
What is the predicted value of Y?
8
9
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