Premium Essay

Quantitative Analysis for Management Chapter 4

In: Business and Management

Submitted By decpro
Words 3989
Pages 16
M04_REND6289_10_IM_C04.QXD 5/7/08 2:49 PM Page 46


Regression Models

15 9 40 20 25 25 15 35 6 4 16 6 13 9 10 16

Teaching Suggestion 4.1: Which Is the Independent Variable? We find that students are often confused about which variable is independent and which is dependent in a regression model. For example, in Triple A’s problem, clarify which variable is X and which is Y. Emphasize that the dependent variable (Y ) is what we are trying to predict based on the value of the independent (X) variable. Use examples such as the time required to drive to a store and the distance traveled, the totals number of units sold and the selling price of a product, and the cost of a computer and the processor speed. Teaching Suggestion 4.2: Statistical Correlation Does Not Always Mean Causality. Students should understand that a high R2 doesn’t always mean one variable will be a good predictor of the other. Explain that skirt lengths and stock market prices may be correlated, but raising one doesn’t necessarily mean the other will go up or down. An interesting study indicated that, over a 10-year period, the salaries of college professors were highly correlated to the dollar sales volume of alcoholic beverages (both were actually correlated with inflation). Teaching Suggestion 4.3: Give students a set of data and have them plot the data and manually draw a line through the data. A discussion of which line is “best” can help them appreciate the least squares criterion. Teaching Suggestion 4.4: Select some randomly generated values for X and Y (you can use random numbers from the random number table in Chapter 15 or use the RAND function in Excel). Develop a regression line using Excel and discuss the coefficient of determination and the F-test. Students will see that a regression line can always be developed, but it may not…...

Similar Documents

Premium Essay

Quantitative Analysis

...AIIAS BUAD635 Quantitative Analysis for Decision-Making Study Guide To accompany the prescribed text: Quantitative Analysis for Management by Render, Stair and Hanna, 11th edition, Prentice Hall, 2012 Unit # 1: Overview and Introduction to Quantitative Analysis Prescribed Text: Quantitative Analysis for Management by Render, Stair and Hanna, 11th edition, Prentice Hall, 2012 – Chapter 1 Objectives of unit 1: After completing this unit, students should be able to: 1. Describe the quantitative analysis approach for management 2. Demonstrate an understanding by applications of quantitative analysis in real world situations 3. Demonstrate the use of modeling in quantitative analysis 4. Use computers and spreadsheet models to perform quantitative analysis 5. Understand the limitations of quantitative analysis 6. Demonstrate/perform break-even analysis. Scope of coverage: Concepts Development 1. Overview of quantitative analysis 2. Defining quantitative analysis 3. The approach to quantitative analysis 4. A quantitative analysis model 5. Using spreadsheet for quantitative analysis 6. Limitation of quantitative analysis Introduction Quantitative analysis for decision-making is the application of a scientific approach to solve management problems. The purpose is to help managers make better decisions. Quantitative analysis......

Words: 19689 - Pages: 79

Free Essay

Exercises Chap 7, Quantitative Analysis for Management

...licenciatura y 20 cursos de posgrado. Problema 7-20 Un ganador de la Texas Lotto decidió invertir $ 50 000 al año en el mercado de valores. Piensa adquirir acciones de una firma petroquímica y una compañía de servicios públicos. Aunque una meta largo plazo es obtener los máximos rendimientos posibles, no ha pasado por alto el riesgo que implica la compra de acciones. Se asigna un índice de riego de 1 a 10 ( 10 como el más riesgo ) a cada una de las dos acciones. En riesgo total del portafolio se encuentra multiplicando el riesgo de cada acción por los dólares invertidos en ella. La tabla siguiente proporción un resumen de la devolución y riesgo. ACCION | RENDIMIENTO ESTIMADO | INDICE DE RIESGO | Petroquímica | 12% | 9 | Servicios | 6% | 4 | Al inversionista le gustaría maximizar el rendimiento de la inversión, pero el índice de riesgo promedio de ésta no deberá ser más de 6. ¿Cuánto deberá invertir en cada acción? ¿Cuál es el riesgo promedio de esta inversión? ¿Cuál es el rendimiento estimado de esta inversión? Variables de decisión: x= dinero invertido en de acciones en petroquímica y= dinero invertido ende acciones en servicios Función objetivo: Max rendimiento: 0.12x + 0.06y Restricciones: * Restricción en la cantidad de dinero a invertir x + y =< 50000 * Restricción en el riesgo promedio deseado 9x + 4y ≤ 50000 ( 6) ; 9x + 4y ≤ 300000 Solución: Una vez que se ha graficado las restricciones se ha determinado la siguiente......

Words: 3612 - Pages: 15

Premium Essay

Chapter 4 Change Management Part

... that the status quo in the organization no longer works and that a change is required. Ā e second level of wake - up call is the realization that the change is transformational. Ā is level requires that leaders understand that the process of transformation is uniquely different from that of developmental or transitional change, and that deeper attention to people and the change process is required. Ā is wake - up call requires leaders to increase what they know . Using what you are learning in this book, you can help provide this education. Ā e third level of wake - up call, certainly more of a stretch, is the realization that transformation requires new strategies and practices beyond their traditional leadership and change management approaches. In other words, leaders must change what they do . Ā is wake - up call begins the leadership breakthrough that is necessary for successful transformation. Ā e fourth level of wake - up call, the most far - reaching and eye - opening, is the realization that transformation requires leaders to change personally, that they must change how they are being : expand their awareness, become more introspective and conscious, shift their mindsets, and transform their behaviors and change leadership style. Ā is is the level of wake - up call that turns the focus of leaders ’ attention into themselves, into observing their own awareness and mindset in action. Ā is increases not only their self - awareness but also their......

Words: 1719 - Pages: 7

Premium Essay

Management Control Systems, Chapter 1-4

...Summaries Management Control ------------------------------------------------- Session 1: Chapters 1,2,3 & 4 Chapter 1 Management and control Management control – all devices or systems managers use to ensure that behaviors and decisions of their employees are consistent with the organizations objectives and strategies (MCS) * Back end of management process * Involves managers taking steps to help ensure that employees do what is best for the org. Primary function of MC: to influence behaviors in a desirable way Benefit of MC: increased probability that organization’s objectives will be achieved Addressing types of problems: theft, fraud, unintentional error, etc Disadvantageous of MC: suppress initiative, creativity and innovation Control System: 1) Strategic Control – Is our strategy (still) valid or do we need to change it and if, how? Focus on the external tools. Management Control – Are our employees likely to behave accordingly? (do they understand what’s expected, and are they capable and willing to do so, if not how can we change it?) Focus on the internal mechanism. Causes of MC problems and needs for control: Can happen in any kind of combination simultaneously Can happen in any kind of combination simultaneously 1. Lack of direction – some employees perform poorly simply because they do not know what the organization wants form them. Management control therefore involves informing employees. 2. Motivational problems –......

Words: 2231 - Pages: 9

Premium Essay

Quantitative Analysis Fro Management Chapter 1 Answers

...Chapter 1 Introduction to Quantitative Analysis Teaching Suggestions Teaching Suggestion 1.1: Importance of Qualitative Factors. Section 1.2 gives students an overview of quantitative analysis. In this section, a number of qualitative factors, including federal legislation and new technology, are discussed. Students can be asked to discuss other qualitative factors that could have an impact on quantitative analysis. Waiting lines and project planning can be used as examples. Teaching Suggestion 1.2: Discussing Other Quantitative Analysis Problems. Section 1.2 covers an application of the quantitative analysis approach. Students can be asked to describe other problems or areas that could benefit from quantitative analysis. Teaching Suggestion 1.3: Discussing Conflicting Viewpoints. Possible problems in the QA approach are presented in this chapter. A discussion of conflicting viewpoints within the organization can help students understand this problem. For example, how many people should staff a registration desk at a university? Students will want more staff to reduce waiting time, while university administrators will want less staff to save money. A discussion of these types of conflicting viewpoints will help students understand some of the problems of using quantitative analysis. Teaching Suggestion 1.4: Difficulty of Getting Input Data. A major problem in quantitative analysis is getting proper input data. Students can be asked to...

Words: 2324 - Pages: 10

Free Essay

Re: Chapter 4 - International Career Management

...Seite 1 DOING BUSINESS IN SWITZERLAND CONTENTS 1 1.1 1.2 1.3 1.4 2 2.1 2.2 2.3 2.4 3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4. 4.1 4.2 4.3 5 5.1 5.2 5.3 6 6.1 6.2 6.3 7 7.1 7.2 7.3 A Brief Survey Geography Population and Languages Political System The Economy Swiss Company Law Governing Law and Forms of Business Enterprises Corporation Books of Account Annual Business Report Taxation of Resident Corporations Liability to Swiss Tax Determination of Taxable Income Tax Privileged Corporations Treaty Benefits for Swiss Resident Corporations Computation of Corporate Taxes Assessment of Corporate Taxes Withholding Taxes of Dividend Distributions of Swiss Corporations Filing of Tax Returns, Assessments of Tax, Tax Litigation Corporate Reorganizations Taxation of Non-Resident Corporations Liability to Swiss Tax Determination of Taxable Income and Capital of Swiss Permanent Establishments Remittance of Profits Withholding Tax Income Subject to Withholding Tax Exemptions from Withholding Tax Withholding and Reimbursement of Tax Indirect Taxes Value Added Tax Stamp Duties Real Estate Taxes Personal Taxation Income Taxes on Residents Income Taxes on Non-residents Other Individual Taxes Seite 2 7.4 8 8.1 8.2 8.3 9 9.1 9.2 10 10.1 10.2 10.3 10.4 10.5 10.6 Tax Returns, Assessment and Payment of Tax Labour Conditions an Social Security Working Conditions Social Security Social Security Treaties Government Incentives Export Risk Guarantee Program Investment Incentives Government......

Words: 17163 - Pages: 69

Premium Essay

Financial Management - Chapter 4 Problems

...Financial Management - Chapter 4, problems 4-1, 4-2, and 4-7 4.1 –If you deposit $10,000 in a bank account that pays 10% interest annually, how much will be in your account in 5 years? N = 5 I = 10% PV = $10,000 FV = $16,105.10 4.2 – What is the present value of a security that will pay $5,000 in 20 years if securities of equal risk pay 7% annually? N = 20 I = 7% FV = $5,000 PV = $1,292.10 4.7 – An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 8% annually, what is this investment’s present value? It’s future value? Yr1-3 = $100 Yr4 = $200 Yr5 = $300 Yr6 = $500 I = 8% NPV = $923.98 FPV = $1,466.23 Chapter 5, problems 5-1, and 5-4 5.1 – $928.39 = PV (9%, 12, -80, -1000) 5.4 – 2 yr yield - 7% 3 yr yield - 7.33% Chapter 6, problems 6-1 and 6-3. 6.1 – (20,000/55,000) * .7 = .2545 (35,000/55000)*1.3 = .8272 = 1.08 6.3 – 1. 5% + 7% = 12% 2. 5%*1= 5, 5 + 12 = 16.9% What is an "opportunity cost rate" and how is this rate used in discounted cash flow analysis? What is an opportunity cost rate? “The opportunity cost rate is the rate of return available on the best alternative investment of similar risk” (Brigham & Ehrhardt, 2014). How is this rate used in discounted cash flow analysis? The opportunity cost rate is the value of "i" in the time value of money equation......

Words: 317 - Pages: 2

Premium Essay

Quantitative Analysis

...QNT/351 February 10th, 2015 Mohammad Sharifzadeh, Ph.D BIMS Research Analysis Introduction This report and the two studies conducted within it are to determine the reason for the increased turnover rate at Ballard Integrated Management Systems, Inc.. This report contains how the studies were conducted, the information that was gathered, interpretations of the data and recommendations for management. Study I Overview Ballard Integrated Management Systems, Inc. (BIMS) is experiencing an increased turnover rate with no clear answer why this is happening. The purpose of this study is to investigate why the turnover rate at BIMS has increased. The question that the research is attempting to answer is: What are the factors that may be contributing to the increased turnover rate in each region? Hypothesis Our hypothesis is that each region is going to show a spike of negative feedback to a specific problem. For example, employees working in the hospitality division may show more displeasure for their supervisor than the employees working in the food service division. This spike may indicate the reason for the increased turnover rate. BIMS One of the problems BIMS faces at its Douglas Medical Center site is a 4 percent increase in employee turnover. The root cause of the increased turnover rate has not yet been determined, and the exit interviews have been unsuccessful in giving the management team any information as to the cause of the problem. Debbie Horner, the......

Words: 6911 - Pages: 28

Premium Essay

Chapter 2. Transaction Analysis – Quantitative; Analyze Results.

...Chapter 2. Transaction analysis – quantitative; analyze results. Stacy-Ann Kelly owns and operates Kelly’s Furniture Emporium, Inc. The balance sheet totals for assets, liabilities, and stockholders’ equity at August 1, 2013, are as indicated. Described here are several transaction entered into by the company throughout the month of August. Required: a. Indicate the amount and effect (+ or -) of each transaction on total assets, total liabilities, and total stockholder’s equity, and then compute the new totals for each category. The first transaction is provided. b. What was the total amount of net income (or loss) during August? How much were total revenues and total expenses during August. Net income for the month of August can be computed as follows: Total revenues were $50,000 (from sales) and total expenses were $40,200. c. What were the net changes during the month of August in total assets, total liabilities, and stockholder’s equity? d. Explain to Stacy-Ann Kelly which transactions caused the net change in her stockholder’s equity during August. Stacy-Ann Kelly’s stockholder’s equity was increased by revenue’s and it was decreased by expenses and dividends as outlined below: Equity increased by $17,000 as a result of the sale on August 14th. Her stockholder’s equity decreased by $7,000 for the operating expenses recorded on August 10th, by $200 for the interest expense recorded on August 24th, and by $5,000 for the cash dividend recorded on August...

Words: 406 - Pages: 2

Free Essay

Analysis Quantitative

...  CLASS    2015     QUANTITATIVE  METHODS                         PERSONAL  ASSIGNMENT     DATA  ANALYSIS       BY      LORENZO  CORONATI                         Prof.  Maurizio  Poli     Via  Bocconi  8     Office  room:  517  (5th  floor)     E-­‐Mail:                               1     1. PRELIMINARY  ANALYSIS       The   main   scope   of   the   work   and   the   data   analysis   consist   in   developing   a   multiple   linear   regression   model   capable   of   demonstrate   the   function   between   ITC   cost   and   the   selected   independent  variables.  All  data  in  this  work  have  been  extrapolated  from  Dataset  Eurostat   Datawherehouse.     The   statistical   units   that   have   been   studied   are   the   15   countries   of   the   European   Community  as  described  in  table  1.   It   has   been   utilized   for   the   analysis   a   software   called ...

Words: 1287 - Pages: 6

Premium Essay

Chapter 4 - Accounting Analysis

...intangible asset based on R&D updates. * The fair values of assets fall below their book values. * An asset is impaired when its fair value falls below its book value. An impairment loss is recognized when book value exceeds the greater of its net selling price and the discounted cash flows expected to be generated from future use. * Markets for many non-current operating assets are illiquid and incomplete, making it highly subjective to infer their fair values. * If the cash flows of an individual asset cannot be identified, IAS 36 requires that the impairment test be carried out for the smallest possible group of assets that has identifiable cash flows, called the cash generating unit. Consequently, considerable management judgment is involved in defining the boundaries of cash generating units, deciding whether an asset is impaired and determining the value of any impairment loss. * Fair value estimates are accurate. * One other use of fair value estimates is to adjust the book value of assets when firms use the revaluation method instead of the historical cost method. When doing so, firms must regularly assess whether the reported book values deviate too much from the assets’ fair values and, if necessary make adjustments. Although revaluation adjustments are recorded in the statement of comprehensive income (not in the income statement), revaluations do affect earnings through the depreciation expense because, under this method,......

Words: 2422 - Pages: 10

Premium Essay

Application of Quantitative Methods in Management

...Quantitative Methods in Management is generally a practical field and can be applied in different areas like Manufacturing, Environmental Planning, Engineering and Construction which is the field of my profession as an Architect. The subject offers a scientific and systematic approach to problem solving and decision making. The use of mathematical analysis helps a decision maker like me, to be able to understand the problems I’m facing and provide a tool in making informed and reasoned judgments. One example on how the subject can help me is for putting mark ups on BIDS which we normally use in construction. The different methods shown in the subject especially in chapter 4 sample problem(4-13) in the book thought me on how to evaluate expected value of profit on different values of additional cost and evaluate which value can give me the best probability of winning the bid and getting the highest profit possible. Since one of the objectives of the subject is to develop analytical frame of mind, it will be an essential tool in project management which includes decision making. It will make Project Managers like me to be explicit in analyzing conditions associated with future decisions and in determining the outcome of different alternatives. For example in my case, I can now evaluate the pros and cons of renting exhibitions stands against building our own for the company. I can now consider which will be more profitable for the company considering all the factors......

Words: 422 - Pages: 2

Premium Essay

Chapter 4 Analysis of Financial Statements

...CHAPTER 4 ------------------------------------------------- ANALYSIS OF FINANCIAL STATEMENTS 1. A firm wants to strengthen its financial position. Which of the following actions would increase its quick ratio? a. Offer price reductions along with generous credit terms that would (1) enable the firm to sell some of its excess inventory and (2) lead to an increase in accounts receivable. b. Issue new common stock and use the proceeds to increase inventories. c. Speed up the collection of receivables and use the cash generated to increase inventories. d. Use some of its cash to purchase additional inventories. e. Issue new common stock and use the proceeds to acquire additional fixed assets. Answer: a 2. Amram Company’s current ratio is 2.0. Considered alone, which of the following actions would lower the current ratio? a. Borrow using short-term notes payable and use the proceeds to reduce accruals. b. Borrow using short-term notes payable and use the proceeds to reduce long-term debt. c. Use cash to reduce accruals. d. Use cash to reduce short-term notes payable. e. Use cash to reduce accounts payable. Answer: b A quick scan of the alternatives would indicate that b is obviously correct—it would lower the CR. Since there is only one correct answer, b must be the right answer. The following equation can also be used. If you add equal amounts to the numerator and denominator, then if Orig CR = or > 1.0, CR will decline,......

Words: 3707 - Pages: 15

Free Essay

System Analysis Chapter 4 Quiz Questions

...Test #1 - Systems Analysis, Chapter 4 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Which of the following describes what the system is required to do? |a. |Functional requirements |c. |User requirements | |b. |General requirements |d. |Technical requirements | ____ 2. ____ requirements describe operational characteristics related to the environment. |a. |Performance |c. |Reliability | |b. |Technical |d. |Usability | ____ 3. ____ prototypes are not built with the intent of being fully functional, but to check the feasibility of certain approaches to the business need. |a. |Functional |c. |Workflow | |b. |Discovery |d. |Logical | ____ 4. A ____ model shows what the system is supposed to do in great detail, without committing to any one technology. |a. |logical |c. |vertical ......

Words: 584 - Pages: 3

Premium Essay

Quantitative Analysis

...BUSN311: Quantitative Methods and Analysis The qualitative data used in this analysis broke down the numbers between men and women employees of the American Intellectual Union (AIU). The demographics of men far outweighed the women in this job with 40 men verses the smaller number of 12 women. This particular data was collected to express the number of each gender both male and female employees. The results clearly demonstrate that this profession is heavily dominated by males. This data could potentially identify links in job satisfaction in any given profession. The purpose of this study was to identify contributing factors associated with job satisfaction or dissatisfaction of both male and female employees in the AIU by demographic characteristic (Cano, Miller). Gender Breakdown 40 Males 12 Females Mean 1.230769231 Median 1 Mode 1 Standard Deviation 0.425436 Sample Variance 0.180995 The quantitative methodology used in the study of employees of the American Intellectual Union was intrinsic. Depending on the type of information required for this study, a parameter must use a constant that is most appropriate for the study. In this case, the intrinsic data focused on the level of job satisfaction. The range was from 1-7 with 7 being the highest level of satisfaction and 1 being the least satisfied. The range in this study fell mostly......

Words: 529 - Pages: 3