Activities (RBM stage)
second step involves the process that converts inputs to outputs (actions necessary to produces results – training, evaluating, developing)
Alternative hypothesis
The argument that either a sample is not equal to, greater than, or less than the hypothesized null sample
Analysis of Variance (ANOVA)
a technique used to determine if there is a sufficient evidence from sample data of three or more populations to conclude that the means of the population are not all equal
Analytics
The discovery, analysis, and communication of meaningful patterns in data.
Autocorrelation
A relationship between two variables that is inherently non-linear
Balanced Scorecard
An approach using multiple measures to evaluate performance, including financial measures, and the non-financial measures of customers, internal business processes, and learning and growth.
Bar chart
A graph that measures the distribution of data over discrete groups or categories.
Benchmarks
Standards or points of reference for an industry or sector that can be used for comparison and evaluation.
Big Data
very large amounts of data; an all-encompassing term for any collection of data sets so large and complex that it becomes difficult to process them using traditional data processing applications
Blind Study
A study performed where the participants are not told if they are in the treatment group or control group
body mass index (BMI)
A measure, based on a person’s weight and height, that is used to classify people as underweight or overweight.
Business process
A sequence of logically related and time based work activities to provide a specific output for a customer.
Central Limit Theorem
A theorem that states that, the greater the sample, the closer the mean of the sample is to the entire population and the more the results will look like a normal distribution
Cluster Analysis
The process of arranging terms or values based on different variables into “natural” groups
Cointegration
Occurs when two time series are moving with a common pattern due to a connection between the two time series
Combination
The number of different unordered possibilities for a certain situation.
Complement
The occurrence of an event not happening, the opposite
Confidence interval
An interval estimate used to indicate reliability
Continuous Data
Data that can lay along any point in a range of data
Control chart
A graphic display of process data over time and against established control limits, and that has a centerline that assists in detecting a trend of plotted values toward either control limit.
Control limits
The area composed of three standard deviations on either side of the centerline, or mean, of a normal distribution of data plotted on a control chart that reflects the expected variation in the data
Criterion-reference test
compare an individual to certain defined standards
Critical Success Factors
The important things an entity must do to be successful, such as quality measures, customer service, or efficiency.
Cumulative Average-Time Learning Model
A learning curve model in which the cumulative average time per unit declines by a constant percentage each time the cumulative quantity of units produced is doubled
Cumulative distributions
The probability that a random variable will be found at a value less than or equal to a given number
Customer satisfaction
A measure of the extent to which customers are satisfied with the products and related services they received from a supplier.
Cycle time
The total elapsed time to move a unit of work from the beginning to the end of a physical process, as defined by the producer and the customer.
Cyclicality
Repetition of up (peaks) or down movements (troughs) that follow or counteract a business cycle that can last several years
Data Management
The management, including cleaning and storage, of collected data.
Data Mining
the process of discovering patterns in large data sets; performed on big data to decipher patterns from these large databases
Data Set
A collection of related data records on a storage device.
Davenport Kim Three Stage Model
A decision making model developed by Thomas Davenport and Jinho Kim that consists of three stages: framing the problem, solving the problem, and communicating results
Dependent Variable
The variable whose value depends on one or more variables in the equation; typically the cost or activity to be predicted
Detractor
A category of customer used in the calculation of the Net Promoter Score that indicates an unhappy customer.
Discrete Data
Data that can only take on whole values and has clear boundaries
Double Blind Study
A study performed where neither the treatment allocator nor the participant knows which group the participant is in
Economic Value Added (EVA)
Net income (after taxes) earned in excess of the amount of net income required to earn the company’s cost of capital.
Epidemiology
study of the incidence, distribution and possible control of diseases and other factors relating to health
Event
An outcome that occurs
Experience Curve
A curve that shows the decline in cost per unit in various business functions of the value chain as the amount of these activities increases
Heteroscedasticity
A regression in which the variances in y for the values of x are not equal
Histogram
A graph that displays continuous data. This type of graph has vertical bars that show the counts or numbers in each range of data.
Homoscedasticity
A regression in which the variances in y for the values of x are equal or close to equal
Hypothesis
A proposed explanation used as a starting point for future examination
Impact (RBM stage)
last step when applying results-based management is to study the long-term effects that the output will have (economic, environmental, cultural, or political change)
Incidence
measures the number of new cases that arise in a population over the course of a designated time period
Incremental Unit-Time Learning Model
A learning curve model in which the incremental unit time (the time needed to produce the last unit) declines by a constant percentage each time the cumulative quantity of units produced is doubled
Independent Variable
The variable presumed to influence another variable (dependent variable); typically it is the level of activity or cost driver
Information Bias
A prejudice in the data that results when either the respondent or the interviewer has an agenda and is not presenting impartial questions or responding with truly honest responses, respectively
Input (RBM stage)
the first step of RBM is to define the resources, human or financial, used by the RBM system (people, funds, information)
Interquartile range
The difference, in value, between the bottom and top 25 percent of the sample or population
Interval Data
Data that is ordered within a range and with each data point being an equal interval apart
Irregularity
One-time deviations from expectations caused by unforeseen circumstances such as war, natural disasters, poor weather, labor strikes, single-occurrence company- specific surprises or macroeconomic shocks
Item Response Theory (IRT)
model of designing, analyzing and scoring tests
Key Performance Indicator (KPI)
A performance measurement that organizations use to quantify their level of success.
Laspeyres Index
a comparison of the same quantity of goods with the same weight over a period of time
Line graph
A graph that illustrates relationships between two changing variables with a line or curve that connects a series of successive data points
Lower limit control
The minimum value on a control chart that a process should not exceed
Mean
An average, calculated by adding a series of elements in a data set together and dividing by the total number in the series
Measurement Bias
A prejudice in the data that results when the sample is not representative of the population being tested
Median
The value or quantity lying at the midpoint of a frequency distribution
Multicollinearity
A multiple regression equation is flawed because two variables thought to be independent are actually correlated to be independent
Multiple Linear Regression
A statistical method used to model the relationship between one dependent (or response) variable and two or more independent (or explanatory) variables by fitting a linear equation to observed data
Multiplication Principle
When the probabilities of multiple events are multiplied together to determine the likelihood of all of those events occurring
Mutually exclusive events
When two or more events are not able to occur at the same time
Net Promoter Score
A management tool designed to collect data indicating the relative loyalty of customers and their willingness to recommend a company’s products or services.
Nominal Data
Sometimes called categorical data or qualitative data, this data type is used to label subjects or data by name
Non parametric test
A test that does not assume there to be a structure (may be a normal distribution) to the population.
Norm-referenced test
compare an individual to other individuals
Normal distribution
data tending to occur around a central value with no bias right or left
Null hypothesis
The argument that there is no difference between two samples or that a sample has not changed over time
Omission Error
An error because something (for example, data or survey response) is missing.
Operating Income
Earnings before Interest and Taxes.
Ordinal Data
Data that places data objects into an order according to some quality with higher order indicating more of that quality
Outcome (RBM stage)
the short-term effect that the outputs will have (greater efficiency, more viability, better decision making, social action, or changed public opinion)
Outlier
An observation point that is significantly distant from the other observations in the dataset
Output (RBM stage)
third step when the outputs have been created by the RBM activities (goods and services, publications, systems, evaluations, skills changes)
Paasche Index
calculates the difference over time between the weighted totals of the qualities purchased at each time
Parametric test
A test that assumes there is a structure (maybe a normal distribution) to the population, often appearing when mean or standard deviation are important.
Passive
A category of customer used in the calculation of the Net Promoter Score that indicates an enthusiastic and satisfied but apathetic customer.
Percentile
the percent of the population that falls below a certain value
Permutation
The number of different ordered possibilities for a certain situation
Prevalence
measures the number cases of a particular disease that exist in a population
Probability
The chance of an event occurring
Probability density function
Often used to represent probabilities of continuous data, a probability density function (pdf) gives the probability that a continuous random variable is equal to the area below it
Probability distributions
A set of probabilities that are attached to the different possible outcomes in a survey, experiment, or procedure
Probability mass function
Often used to represent probabilities of discrete data, a probability mass function (pmf) gives the probability that a discrete random variable is exactly equal to some value
Promoter
A category of customer used in the calculation of the Net Promoter Score that indicates a loyal and enthusiastic customer.
Proportion
a ratio in which a part of a group is compared to the whole group
R-squared
The measure of the “goodness of fit” of the regression line and the percentage of variation in the dependent variable that is explained by the independent variable
Random Errors
Errors in measurement caused by unpredictable statistical fluctuations
Random Variation
The variability of a process which might be caused by irregular fluctuations due to chance that cannot be anticipated, detected, or eliminated
Range
The difference between the minimum and maximum value in a given measurable set
Rate
measure of an event occurring over a period of time
Ratio
measures one quantity in relation to another quantity
Ratio Data
Similar to interval data in that the data that is ordered within a range and with each data point being an equal interval apart, also has a natural zero point which indicates none of the given quality.
Regression Analysis
A statistical analysis tool that quantifies the relationship between a dependent variable and one or more independent variables
Relational Database
A database structured to recognize relations among stored items of information.
Reliable Data
Data that is consistent and repeatable
Results-base Management (RBM)
a management strategy that uses results as the central measurement of performance
Return on Investment (ROI)
The ratio of income earned on the investment to the investment made to earn that income.
Run chart
A line chart that shows performance measurements over time; run charts help to uncover trends or aberrations in processes
Sampling with replacement
When a piece of the population can be selected more than once
Sampling without replacement
When a piece of the population cannot be selected more than once
Scatter diagram
A graphic that uses dots to show relationships or correlations between variables
Significance level
A number that is used as the cutoff for how statistically meaningful a probability, equal to or more extreme than what was observed, is
Simple Composite Index
created when a researcher gathers data from many different sources without weighing any data more significantly than any other data
Simple Index Number
shows the change in price or quantity of a single good or service over time
Simple Linear Regression
A form of regression analysis with only one independent variable
Specification limits
The area, on either side of the centerline, or mean, of data plotted on a control chart that meets the customer’s requirements for a product or service. This area may be greater than or less than the area defined by the control limits
Standard deviation
The square root of the variance, a measure of how spread out the numbers are
Standard Error (SE) of Estimate
The “average” deviation of the data points from the regression line or curve
Standard score
Also Z-scores, measure the distance from a piece of data from the mean compared to the entire population; method to compare two data sets together with different scales.
Statistics
The science that deals with the interpretation of numerical facts or data through theories of probability. Also, the numerical facts or data themselves.
Systematic Errors
Errors in measurement that are constant within a data set, sometimes caused by faulty equipment or bias
test statistic
One value used to test the hypothesis, it is a numerical summary of the data set
The Result Chain
1) Resources – inputs and activities 2) Results – outputs then outcomes then impact
Time Series Analysis
Regression analysis that uses time as the independent variable
Trend
In data analysis, a general slope upward or downward over a long period of time
Trial
An experiment, a test of the performance or qualities of something or someone
Triple Blind Study
A study performed where neither the treatment allocator nor the participant nor the response gatherer knows which group the participant is in
True Score Model
average score an individual would achieve if he or she were to take the test infinite times; observed score is the true score plus random error
Upper control limit
The maximum value on a control chart that a process should not exceed
Valid Data
Data resulting from a test that accurately measures what it is intended to measure
Variance
The average of the squared differences from the mean of the related sample
Weighted Composite Index
created when a researcher applies more weight to certain goods or services than others as they are calculating the index number
Z-score
A statistical measure that indicates the number of standard deviations a data point is from its mean
Pareto chart
A bar chart that sorts data into categories, then prioritizes those categories to help project teams identify the most significant factors or the biggest contributors to problems.
80/20 rule
states that 80% of quality management problems are the result of a small number – about 20% – of causes
expected value
a random variable is intuitively the long-run average value of repetitions of the experiment it represents
cohort study
A study that observes and follows people moving forward in time from the time of their entry into the study.
linear programming
A mathematical tool used to optimize a function (the objective function) subject to various constraints, all of which are linear. Often used to find the combination of products that will maximize profits or minimize costs.
correlation
The extent or degree of statistical association among two or more variables.
response bias
This misuse occurs when the respondents to a survey say what they believe the questioner wants to hear. This bias can occur as a result of the wording of a question.
Association and causality
This statistical misuse occurs when a researcher notices a relationship between two variables and assumes that one variable is the cause of the other. In reality, these variables might both be caused by a separate variable. In this case, they would merely be correlated, which means they show up together. Or there might be no relationship at all.
operationalization
refers to the development of specific research procedures that allow for observation and measurement of abstract concepts
conscious bias
occurs when the surveyor is actively seeking a certain response to support his or her theory or cause
Bayes’ Theorem
A formula that calculates conditional probabilities, important in understanding how new information affects the probabilities of different outcomes.
conditional probability
the probability of an event occurring given that another event has occurred
Chi-square test
any statistical hypothesis test in which the sampling distribution of the test statistic is a chi-square distribution when the null hypothesis is true
Plan Do Check Act Cycle
A four-step method that practitioners use to create plans to solve a problem (Plan), run an experiment to see if the plan will work (Do), check the experiment results (Check), and implement changes to processes or policies (Act)
SIPOC diagram
A diagram that defines the boundaries of a process and shows how its Suppliers, Inputs, Processes, Outputs, and Customers affect process quality.
Ishikawa – 7 Basic Tools of Quality
1) Run Chart
2) Check sheet
3) Cause and effect diagram (fishbone diagram)
4) Histogram
5) Flow Chart
6) Scatter Diagram
7) Pareto chart
Six Sigma
A highly disciplined, data-driven approach that uses statistical analysis to measure and improve a company’s operational performance by identifying and eliminating defects in manufacturing and service processes; the term itself is commonly defined as 3.4 defects per million opportunities.
lean operations
Popularized by Six Sigma, business practices that use as little time, inventory, supplies and work as possible to create a dependable product or service. The less that is used, the less waste occurs, and the more money the business saves. Accuracy is also very important in POS (Point of Sale) systems, and the most accurate systems produce products and services without flaws, so nothing needs to be thrown away.
International Organization for Standardization (ISO)
Established a certification program that guarantees that an organization is dedicated to quality concepts and is continually working to ensure that it is producing highest level of quality possible. The certification shows that an organization has a quality management system in place to monitor and control quality issues and is continuing to meet the needs of customers and stakeholders with high-quality products and services.
(Quiz 1) 1. For companies to attract and retain their best customers they need a complete portrait of who they are. To develop this portrait companies turn to…
A) Statistics
B) Analytics
C) Management Science
D) Histograms
B
(Quiz 1) 2. A manufacturer wants to maximize their factory output while specifically minimizing labor costs. What type of analytics might they employ to achieve this goal?
A) Descriptive Analytics
B) Predictive Analytics
C) Prescriptive Analytics
D) Diagnostic Analytics
C
(Quiz 1) 3. What type of data error that occurs in measurement is constant within a data set and is sometimes caused by faulty equipment or bias?
A) Random
B) Omission
C) Outlier
D) Systematic
D
(Quiz 1) 4. An Educator develops a new standardized test to measure math skills of ninth graders. She has students in her home state of Ohio take the test. If the test is to be used on a national level, what type of error might be found in her data?
A) Omission Error
B) Systematic Error
C) Measurement Bias
D) Information Bias
C
(Quiz 1) 5. A city government is trying to determine the national origins of its recent immigrant population. If a survey of the immigrant population is conducted in English what type of error might be present in the data?
A) Random
B) Omission
C) Outlier
D) Accuracy
B
(Quiz 1) 6. The use of Big Data is increasingly important to businesses in competitive markets. Which of the following characteristics is NOT true of big data?
A) Requires the use of analytics
B) Contains structured data
C) Contains unstructured data
D) Can be analyzed with traditional spreadsheets
D
(Quiz 1) 7. The Davenport-Kim three-stage model consists of framing the problem, solving the problem, and communicating results. Which two of the following are part of framing the problem stage?
A) Determine the scope of the problem
B) Data collection
C) Review of previous findings
D) Presenting a recommendation
A & C
(Quiz 1) 8. A healthcare provider is researching blood glucose levels before and after exercising. What two elements should be part of any experimental study such as this?
A) Treatment procedures
B) Patient observation
C) Statistical validity
D) Experimental response
A & D
(Quiz 1) 9. Runners cover 26.2 miles in the Olympics marathon. What level of measurement is this?
A) Nominal
B) Ordinal
C) Interval
D) Ratio
D
(Quiz 1) 10. What level of measurement is the type of cars produced in Ford factory?
A) Nominal
B) Ordinal
C) Interval
D) Ratio
A
(Quiz 1) 11. What level of measurement is this the 10 best cities in the U.S. to retire in?
A) Nominal
B) Ordinal
C) Interval
D) Ratio
B
(Quiz 1) 12. What level of measurement are women’s dress sizes (2,4,6, etc.)?
A) Nominal
B) Ordinal
C) Interval
D) Ratio
C
(Quiz 1) 13. A local school board is studying the impact of a proposed change in testing on math scores. Bias can be introduced into the study by both students and teachers. Which research technique would eliminate this type of bias?
A) Observation study
B) Blind study
C) Cohort study
D) Double blind study
D
(Quiz 1) 14. A Company’s product development team test 3 new car waxes by waxing 5 cars with each wax and then running them through a car wash. They then record number of washes it takes before the wax begins to deteriorate. What is the term for the five cars?
A) The response
B) The construct validity
C) The experimental unit
D) The treatment
C
(Quiz 2) 1. An online retailer selling workout apparel has a large increase in sales during December and declares that their weekly newspaper ad resulted in higher sales. What misuse of statistics may the retailer have used in making this decision?
A) Conscious Bias
B) Missing Data
C) Association and Causation
D) Small Sample Size
C
(Quiz 2) 2. An educator collects eighth grade math scores from a local school and used this data to recommend curriculum changes for grades 8 – 12. What misuse of statistics may the educator have used in making this recommendation?
A) Not a representative sample
B) Conscious Bias
C) Lack of Binding
D) Missing Data
A
(Quiz 2) 3. An economist wishes to study the distribution of household income in a Midwestern city. He randomly selects a sample from 12 households. He notices two large incomes in his sample. Which measure best represents the middle of the incomes?
A) Mode
B) Median
C) Variance
D) Mean
B
(Quiz 2) 4. A cable company offers its customers both cable television and internet. What statistical rule should be used to determine the probability that customers will have both cable television and internet?
A) Multiplication
B) Bayes Theorem
C) Combination
D) Addition
A
(Quiz 2) 5. A department store is considering a new credit policy to reduce defaults on payments. Its records show that 95% of defaults have at least 2 late payments. Also, 3% of all customers default and 30% of those customers who have not defaulted have a least 2 late payments. What statistical rule should be used to find the probability that a customer will default given that at least 2 payments were late?
A) Central Limit Theorem
B) Multiplication Rule
C) Bayes Theorem
D) Combination Rule
C
(Quiz 2) 6. Based on quality checks at plastic bags manufacturer, the breaking strength of their bags has a mean of 50.5 and a standard deviation of 1.6. A customer’s test of the bags finds bag strength of 54.2 or less. Which statistical measure should be used to help determine the probability of the customer’s test occurring?
A) t-test
B) z-score
C) p-value
D) R-Square
B
(Quiz 2) 7. The mean of 100 bank customers’ waiting times for teller service is 5.8 minutes with a standard deviation of 1.5. What time range would represent a 95.4% probability customer waiting time?
A) 4.3 to 7.3
B) 2.8 to 8.8
C) 1.3 to 13.0
D) 3.8 to 7.5
B
(Quiz 2) 8. The revenue of NBA teams ranges from $226 million for the New York Knicks to $92 million for the Milwaukee Bucks. Which statistic would measure how far each NBA team’s revenue is from the NBA revenue mean?
A) Z-score
B) Mode
C) Median
D) Variance
D
(Quiz 2) 9. A local plumbing company is analyzing to see how the number weeks taken for their payment receipts is distributed. Which graphical analysis technique should they use?
A) Scatterplot
B) Pie Chart
C) Histogram
D) Box Plot
C
(Quiz 2) 10. Given the following data set:60, 41, 30, 15, 34, 30 What is the Median?
A) 32
B) 30
C) 34
D) 35
A
(Quiz 2) 11. A loan officer compares the interest rates for 48 month fixed-rate loans and 48 month variable-rate auto loans. Two independent, random samples of auto loans are selected. Which two results happen when the null hypothesis is rejected using a t-test? (Pick 2)
A) The test statistic is less than the critical value
B) The null hypothesis is rejected given a probability of being wrong
C) The test statistic is greater than the critical value
D) The null hypothesis is accepted given a probability of being correct.
B & C
(Quiz 2) 12. An online marketing organization designed a social media that wants to earn at least $250,000 in revenue. The campaign will reach 10,000 viewers and receive orders with a mean of $50 and standard deviation of $10. Which measure should be used to determine the probability of the campaign receiving at least $250,000?
A) T-statistic
B) Z-score
C) Median
D) R-squared
B
(Quiz 2) 13. What does it mean when an individual data point has a z-score of +1?
A) The data point is one standard deviation less than the mean of the data set.
B) The sample standard deviation of the data set is negative.
C) The data point is less than the mean of the data set.
D) The data point is one standard deviation greater than the mean of the data set
D
(Quiz 2) 14. A descriptive graph depicting whether there is a correlation or relationship between two variables, such as car mileage and resale price would be:
A) Histogram
B) Bar chart
C) Scatterplot
D) Pareto chart
C
(Quiz 2) 15. A food chain finds that there is a strong positive correlation between average daily sales for their pizza store and the number of daily visits to their website. What should be considered before the pizza chain can conclude that the daily sales are driving the number of visits to their website (or vice versa)?
A) How many days are considered?
B) Is there a causal relationship between sales and site visits?
C) Can we compare sales in dollars to number of visits?
D) Is the central limit theorem applicable?
B
(Quiz 2) 16. We examine a population with normal distribution having mean of 1000 and standard deviation 50. What percentage of the population lies between 850 and 1150?
A) 68%
B) 95%
C) 99.7%
D) 100%
C
(Quiz 2) 17. We examine a population with normal distribution having mean 1000 and standard deviation 50. What percentage of the population lies between 900 and 1100?
A) 68%
B) 95%
C) 99.7%
D) 100%
B
(Quiz 2) 18. How are z-scores from a population with normal distribution distributed?
A) Normal Distribution with mean 0 standard deviation 1
B) Normal Distribution with the same mean and standard deviation
C) Can’t be determined
D) Can be determined but none of these answers are correct
A
(Quiz 2) 20. A stock broker offers two portfolios for his clients. There are various risks with each portfolio and his is trying to minimize the risk of loss. Both portfolios have the same mean return.Which measure should the employee use to decide between these alternatives?
A) Z-score
B) Median
C) T-statistic
D) Variance
D
(Quiz 2) 21. A comparison between the effectiveness of online vs. newspaper coupons was conducted over a 3 month period to see which method brought in greater average revenue per customer.Which statistic should the pizza manager recommend use to determine promotional method to use?
A) Chi Square
B) Z score
C) ANOVA
D) T-test
D
(Quiz 2) 22. You are on soccer league with a total of 10 opposing teams, the pairings in the first round are at random. There are 4 out of state and 6 in-state opposing teams. What is the probability of playing against an in-state team?
A) 20%
B) 30%
C) 40%
D) 60%
D
(Quiz 2) 23. Which type of distribution would you expect to see if mean=mode=median?
A) Pareto distribution
B) Bimodal distribution
C) Multimodal distribution
D) Normal distribution
D
(Quiz 2) 24. Two variables are plotted on a scatterplot and the points on the plot closely follow an upward, straight line. What is the likely correlation between the two variables?
A) Close to 1.0
B) Close to 0
C) Close to -1.0
D) Close to 2.0
A
(Quiz 2) 25. Which of the following statistics are robust to minimize the effect of a single large outlier? (More than one answer)
A) Median
B) Interquartile range
C) Variance
D) Range
E) Mean
F) Mode
A, B, & F
(Quiz 3) 1. A craftsman builds two kinds of birdhouses. One for bluebirds and one for cardinals. He knows the amount of labor and the units of lumber that are needed for each birdhouse. The craftsman has available 60 hours of labor and 120 units of lumber. Which technique should the craftsman use to minimize cost?
A) Simulation
B) Linear Regression
C) Linear Programming
D) Breakeven
C
(Quiz 3) 2. Ski Boards, Inc. wants to enter the market quickly with a new finish on its ski boards. It has three choices: refurbish the old equipment, make major modifications or purchase new equipment. The company has estimated the fixed and variable cost for each option. Which technique should they use to select the least costly option?
A) Breakeven
B) Linear Regression
C)Linear Programming
D) Cross Over
D
(Quiz 3) 3. Which analysis technique can be used with hypothesis testing when nominal or categorical data is gathered?
A) Z-score
B) Chi-square
C) t-test
D) ANOVA
B
(Quiz 3) 4. United Motors indicates that gas mileage tests of one of their cars, the Starbird 300, under city driving conditions has a mean of 29.9 mph and a mode of 30 mph. Which type of distribution would this testing represent?
A) Pareto distribution
B) Bimodal distribution
C) Multimodal distribution
D) Normal distribution
D
(Quiz 3) 5. North American Oil Company is attempting to develop a reasonably priced gasoline that will deliver improved gasoline mileage. As part of its development process, the company would like to compare the effects of three types of gasoline. Which analysis technique should the company use to compare the performances of each gasoline type?
A) t-test
B) ANOVA
C) Z-test
D) Chi-square
B
(Quiz 3) 6. Enterprise Industries produces Fresh, a brand of liquid laundry detergent. In order to study the relationship between price and demand for the large bottle of Fresh, the company develops the following relationship:
Demand = 600 + 50X. What price is needed to produce a demand of 1000?
A) $6
B) $8
C) $10
D) $12
B
(Quiz 3) 7. A large manufacturer wants to forecast demand for a piece of pollution-control equipment. A review of the past 12 months of sales indicates that sales are increasing. What time series pattern does the sales likely exhibit?
A) Cyclicality
B) Trend
C) Seasonality
D) Random variation
B
(Quiz 3) 8. A car dealership wishes to forecast car sales based upon price discounts and television ads. What forecasting technique should the dealership use?
A) Time series analysis
B) Cluster analysis
C) Decision Analysis
D) Multiple Regression Analysis
D
(Quiz 3) 9. A city hospital wishes to evaluate the labor hours it needs based upon monthly occupied bed days and average length of patients’ stay. The estimated regression is: y = 2000 + 75X1 + 65X2 What scenario would be predicted if X1 = 500 and X2 = 1000?
A) 102,500
B) 67,000
C) 104,500
D) 110,800
C
(Quiz 3) 10. Refers to a situation in which two or more explanatory or independent variables in a multiple regression model are highly linearly related.
A) Logistic Regression
B) Autocorrelation
C) Homoscedasticity
D) Heteroscedasticity
B
(Quiz 3) 11. A business entrepreneur wishes to predict yearly revenue for potential Sub Restaurant sites. He performs a regression analysis based upon the area’s population and business rating. What statistic indicates the strength of the relationship of population and rating to revenue?
A) F – test
B) P – value
C) Z – score
D) R – square
D
(Quiz 3) 12. A researcher is evaluating voter turnout based upon age and location of voting precincts. Which analysis technique should she use?
A) Decision Analysis
B) Time Series Analysis
C) Linear Programming Analysis
D) Cluster Analysis
D
(Quiz 3) 13. An entrepreneur is thinking about starting an independent gasoline station and considering how large the station should be. The annual return will depend upon the size of station and a number of marketing factors related to the oil industry and demand for gasoline. What analysis technique should be used to evaluate station size given the uncertainty of oil industry and demand factors?
A) Decision Analysis
B) Time Series Analysis
C) Regression analysis
D) Cluster analysis
A
(Quiz 3) 14. After traveling down the Mississippi River, barges randomly arrive in New Orleans and are unloaded on a first-in, first-out basis. Any barges not unloaded on the day of arrival must wait until the following day incurring additional cost and negatively affecting customer service. The dock superintendent wants to use analytics to support a request for additional unloading crews. What analysis technique should he use?
A) Multiple Regression
B) Simulation
C) Linear Programming
D) ANOVA
B
(Quiz 3) 15. A Boston Hallmark store is preparing a budget for the next year and needs to forecast sales. The store notices variation in sales around holidays. What pattern describes the data to be forecasted?
A) Trend
B) Cyclicality
C) Seasonality
D) Random Variation
C
(Quiz 4) 1. What result do business quality teams expect when using quality tools?
A) Wording of presentation that communicates recommendation
B) The degree of employee involvement
C) Minimize errors through collection and analysis of data
D) Refrain from testing before implementing programs
C
(Quiz 4) 2. A local restaurant is attempting to reduce the time from taking a customer’s order to delivery of the order. Which quality tool should the restaurant use to study their order process?
A) PDCA model
B) Histogram
C) Check sheet
D) Flow Chart
D
(Quiz 4) 3. Which type of quality activity would assess capabilities and recommend process design changes as preventive action?
A) Six Sigma activity
B) Lean Quality Management
C) Quality assurance activity
D) ISO management
C
(Quiz 4) 4. Which of the Seven Basic Quality Tools is used to exhibit the relationship between two variables?
A) Histogram
B) Scatter Diagram
C) Check Sheet
D) Cause-and-Effect Diagram
B
(Quiz 4) 5. Which quality tool is an organized method for collecting data?
A) Pareto Chart
B) Histogram
C) Flowchart
D) Check Sheet
D
(Quiz 4) 6. After collecting data and performing statistical analysis in a company’s assembly department, a quality team recommends processing changes to reduce defects. The team proposes a pilot program to evaluate the effectiveness of their recommendations. Which step of the Plan-Do-Check-Act model does the pilot program represent?
A) Plan
B) Do
C) Check
D) Act
B
(Quiz 4) 7. Which two statements describe how a process approach and a commitment to continuous improvement enhance quality?
A) Efficiently achieving results
B) Enhances customer loyalty
C) Creates the best possible product
D) Mutually beneficial partnerships
A & C
(Quiz 4) 8. Which statement is NOT true of the Seven Basic Tools of Quality?
A) An average worker can easily understand how to use the tools
B) Processes are represented graphically
C) The tools are based on statistics
D) Tools can be used independent of each other
C
(Quiz 4) 9. A maker of computer chips develops a new training program to assure that quality standards are met. Which of the following activities is the training program an example of?
A) Quality Control activity
B) Lean Operations activity
C) Quality assurance activity
D) Just-in-time activity
C
(Quiz 4) 10. A recent poll of 519 adults who flew in the past year found they ranked the following as their number 1 complaint: cramped seats (45), cost (16), fear of flying (57), security measures (119), poor service (12), connecting flight problems (8), overcrowded planes (42), late planes (57), food (7), and other (51). Which technique would be used display a ranking of the complaints?
A) Scatter diagram
B) Pareto chart
C) Cause-and-effect diagram
D) Control chart
B
(Quiz 5) 1. A Charity is evaluating the effectiveness of its annual walk promotional campaign, in increasing walk participants and donations.What is the appropriate tool for evaluating performance?
A) Management by objectives
B) Results-based management
C) Balanced scorecard
D) Key Performance Dashboard
B
(Quiz 5) 2. An online Active Wear retailer wants to use their last year’s sales to evaluate consumer trends before ordering merchandise for fall season. What process should they use to discover consumer purchasing patterns?
A) Hypothesis testing
B) Linear programming
C) Data mining
D) Qualitative research
C
(Quiz 5) 3. City Line Transport wants to look at its fuel costs for 2013, 2014 and 2015 against the start-up base period of 2012. What analytic method should the company use?
A) Exponential smoothing
B) Simple Index
C) Cumulative incidence
D) Moving average
B
(Quiz 5) 4. An International Health Organization is concerned about the spread of the Zika virus in South America as mosquito season approaches. It proposes measuring the growth of new cases for the total population over the next six months. What type of analytics would this represent?
A) Prevalence
B) Ratio
C) Cumulative Incidence
D) Incidence Rate
C
(Quiz 5) 5. Which measurement may be used by potential home buyers to evaluate the price of homes on the market?
A) Cost of raw materials
B) Price per square foot
C) Realtor listings
D) Zoning regulations
B
(Quiz 5) 6. At WGU, students take objective assessments to evaluate a student’s knowledge of predetermined course competencies in relation to a cut score. What type of test is the objective assessment?
A) Norm-referenced
B) Percentile based
C) Criterion-referenced
D) Reliability based
C
(Quiz 5) 7. A High School principal wishes to study the math and science performance of individual 12th grade students by comparing their scores across multiple courses. Which analysis technique should the principal use:
A) z-score
B) t-test
C) p-value
D) R-square
A
(Quiz 5) 8. The town council of a beach town is studying whether to dredge the canals of an ocean front community that were filled with sand during a hurricane. What analytic method can the council apply to this issue?
A) Cross-over analysis
B) Boating access to local home sites.
C) Household income
D) Cost-benefit analysis
D
(Quiz 5) 9. A regional grocery chain measures the increase in prices by tracking the price of milk, eggs, white bread, and ground beef using the year 2005 as a base. The sum of these items in 2005 was $10.00 and the sum of the prices in 2015 was $14.50. What is the simple composite index for these items?
A) 1.45
B) 10.0
C) 125
D) 145
D
(Quiz 6) 1. A manufacturer of running shoes is implementing lean operation concepts into their production process. Which critical success factor would assure a smooth transition into the new program?
A) Understand customer needs and wants
B) Verify accounting procedures
C) Review of hiring practices
D) Expand community relations efforts
A
(Quiz 6) 2. A retail chain seeks to improve store performance by growing sales and improving customer service. Which tool would specifically meet the chain’s objective of improving store sales growth?
A) Net promoter score
B) Big data analysis
C) Key performance indicator
D) Balanced scorecard
C
(Quiz 6) 3. An Online retailer seeks to improve its Amazon customer services rating. What two key performance indicators should the retailer measure?
A) Measure on time delivery
B) Measure employee productivity
C) Measure customer return rate
D) Measure average order size
A & C
(Quiz 6) 4. An Organization seeks to shift its business strategy to development of new products for the future while still growing sales of its current products. Which tool could help the company focus on both its financial objective and growth of new products?
A) SIPOC Diagram
B) Linear Programming
C) Balanced Scorecard
D) Net Promoter Score
C
(Quiz 6) 5. A rural town seeks to deploy a new citizen relationship program within its Fire and EMT department. How could the citizen relationship program help the town service citizen’s emergencies?
A) It could help reduce the cost of schools
B) It could enhance the training of town employees
C) It could reduce response times
D) It could aid funding of road projects
C
(Quiz 6) 6. A Pizza Chain wishes to improve sales by focusing on product quality, reducing delivery time and improving productivity. Which tool would best meet the Chain’s objective of quantifying their improvement in product quality only?
A) Net Promoter Score
B) Key Performance Indicator
C) Balance Scorecard
D) Big Data Analysis
B
(Quiz 6) 7. What are two disadvantages of a Balanced Scorecard?
A) Sometimes difficult to maintain momentum
B) Emphasizes strategy and organizational results
C) May not encourage desired behavior changes
D) Links company operations with its strategy
A & C
(Quiz 6) 8. What are two advantages of Key Performance Indicators (KPI)?
A) Can be expensive and time-consuming to set up and use
B) Educate management on company performance
C) Results are often only rough guide rather than a concrete measurement
D) Data-driven results make it easier to quantify performance
B & D
(Quiz 6) 9. Which two examples exhibit appropriate use of performance measures in business?
A) A hospital measure Emergency Room response time for improvement
B) Nonprofit analyze expenses to increase the percent of funds donated
C) A Women’s retail shop reviews color trends for the next fall season
D) A school reviews number of extra-curricular activities available to students
A & B
(Quiz 6) 10. Which two statements indicate when it is appropriate to use a KPI Dashboard?
A) When more than a single chart, graph or piece of data are integral to making business decisions.
B) If used over time, can create an internal benchmarking system
C) Needed to emphasize strategy and organizational results
D) When visual representation is needed to see if an organization is meeting the goals
A & D
(Quiz 6) 11. A retailer wants to evaluate the strength of its customer relations to see how the company compares to others in the industry. Which analysis technique could help the retailer with this decision?
A) Net Promoter Score
B) SIPOC diagram
C) Balance Scorecard
D) Big Data Analysis
A
(Quiz 6) 12. A Manufacturer needs to closely manage product cost to maintain profit margins in a highly competitive market. Which two key performance indicators should management use to control product cost?
A) Measure employee productivity
B) Measure square footage
C) Measure community relations
D) Measure production waste
A & D
Z-Score
Data points only. Measurement of a scores relationship to the mean. A statistical measure that indicates the number of standard deviations a data point is from its mean.
Variance
How far a set of numbers are spread. Used for Data set. Hint Words = Risk, spread.
Multiplication Rule
A method for finding the probability that both of two events occur. When the probabilities of multiple events are multiplied together to determine the likelihood of all of the events happening. Word Hint: And
Addition Rule
A method for finding the probability that either or both of two events occur. When two events, A and B, are mutually exclusive, the probability that A or B will occur is the sum of the probability of each event. Word Hint: Either/or.
Combination Rule
How many combinations can be made.
Bayes Theorem
Probability of an event , based on conditions that might be related to the event. Conditional probability. A formula that calculates conditional probabilities. Important for understanding how new information affects the probabilities of outcomes. Word Hint: Given that.
Median
Number halfway into the data set. Hint Word: Typical
Mode
Number that occurs most often in a data set.
Mean
Average. Add all numbers and divide.
Standard Deviation
How spread out the numbers are. Square root of the variance.
Pareto Chart
Contains both line and bar graphs. Ordered by frequency of occurrence that shows how many results were generated by each identified cause.
Cause and Effect Diagram
Shows the causes of a specific event.
Check Sheet
Collect data in real time.
Control Chart
Determines whether a process should undergo a formal exam for quality.
Histogram
Graph representing the distribution of numeric data. Measures how continuous data is distributed over various ranges. Example: Displays how many people fall in various ranges of height.
Scatter Diagram
A graphic that uses dots to show relationships or correlations between variables
Flow/Run Chart
Shows the workflow process
Bar Chart
Graph of schedule-related info. Example: Measures how many people are from each state.
Box – Plot
Used while studying the composition of a data set to examine the distribution (non – parametric data) uses median and percentiles rather than averages. (Look for Spread and Median.)
Dependent Variable
Dependent upon the Independent variable
Independent Variable
Variable the drives the dependent variable
Range
Difference between the lowest and highest number in a data set. Example: 4,6,9,3,7 Range = 9-3 =6
T-Statistic
Statistic (derived from a sample) used in hypothesis testing. Determines if 2 sample means are significantly different from each other.
Central Limit Theorem
Distribution of average of a large number of independent, identical, variables will be approximately normal. OR the idea that if a large enough number of samples is taken, the means of those samples will be normally distributed around the population mean.
F-Statistic
Value you get when you run an ANOVA test or a regression analysis to find out if the means between two populations are significantly different.
ANOVA
(Analysis of Variance) – Collection of statistical models used to analyze the differences among group means, (Three or more groups) Compares samples over different times. Uses same software as regression, but takes multiple sets of data and tries to find the difference between the groups. At least three groups of data and sees if there is any statistical value. Used to determine if there is a significant difference among three or more means.
Linear Regression
Describes data and explains the relationship between one dependent variable and one more independent variables. Predictive analysis. Linear relationship between two variables can be measured by its strength
Strong Linear
Bunch around a straight line
Weak Linear
Scattered
Negative Linear
When one values decreases as the other increases
Positive
When both values increase together.
Correlation Coefficient
The strength of a linear relationship.
A number between -1 and 1
Close to 0 means a weak linear relationship
Closer to -1 or 1 means strong linear relationship
Equal to exactly -1 or 1 considered perfectly linear
Negative linear relationships have correlations less than 0
Strong linear relationships have correlations great than 0
Correlation
A and B may happen at the same time, but may not be related.
R – Squared
The term “R-squared” or “R2” provides a measure of “goodness of fit.”
Chi – Squared
Assess the goodness of fit between observed values and those expected theoretically. A chi-squared test is commonly used in statistics to draw inferences about a population, by testing sample data. A chi-squared test is employed for categorical data.
Linear Programming
Used to achieve best outcomes such as maximum profit or lowest cost. Give key points.
Cross over Analysis
Usually doesn’t have revenue. Finds the intersection of two lines and shows which option is cheapest.
Interval Data
(Integer) Data this is ordered within a range with each data point being an equal interval apart. Example: Level of happiness, degrees in Fahrenheit.
Nominal Data
Called “Categorical Data” or “Qualitative Data”, data type is used to label subjects by order of name. Breaks results into categories, like days of the week, or states of the United States of America.
Valid Data
Data from a test that accurately measures what it is intended to measure.
Reliable Data
Data that is consistent and repeatable.
Ration Data
Data that is ordered within a range with each data point being an equal interval apart, also has a natural zero point which indicates none of the given quality. Example: Height, Age.
Ordinal Data
Data that is set into some kind of order on a scale. Example: Athletes on the podium during the Olympic games.
Continuous Data
Data that can lay along any point. Example: Height, Run Times
Discrete Data
Data that can only take on whole values and has clear boundaries. Example: Number of students in a class room.
Inferential Statistics
Used to make predictions about a population from a sample.
IQR (Inter-quartile Range)
The difference in value between the bottom and the top 25% of the sample.
Cumulative Distribution
The probability that a random variable will be found at a value less than or equal to a given number.
Confidence Interval
An internal estimate used to indicate reliability.
Complement
The occurrence of an event not happening, the opposite.
Descriptive Statistics
Statistics that are used to describe a population from observations of that whole population.
Standard Error of the Mean
An estimate of the distance between the sample mean and the population mean.
Experience Curve
Shows the decline in cost per unit in various business functions of the value chain as the amount of these activities increases.
Standard Error of the Mean
Average deviations of the data point from the regression line or curve.
Multicollinearity
A multiple regression is flawed because two variables thought to be independent are actually correlated to be independent.
Logistic Regression
Analysis that predicts the result of a binary, categorical dependent variable.
Tree Diagram
Tool that uses steps to break a topic down into its components.
Regression Analysis
Used to predict future data values. A Statistical process for estimating the relationships among variables. It includes many techniques for modeling and analyzing several variables, when the focus is on the relationship between a dependent variable and one or more independent variables.
Control Limits
Area composed of three standard deviations on either side of the center line.
Lean
A method for when a manager seeks to maximize customer value while minimizing waste.
Network Diagram
Graphic representation of the schedule that shows the sequence of project activities.
Process Decision Program Chart
A Tree Diagram designed to help uncover counter measures or contingency plans so problems can be solved quickly or avoided.
SIPOC
Suppliers, Inputs, Processes, Outputs, and Customers
Variable Data
Data that shows how well a result meets a requirement, often shown on a scale or as a rating.
Affinity Diagram
Tool that helps teams sort verbal data or ideas into categories for further investigation or evaluation.
Data Mining
Process of discovering patterns in large data sets.
Consumer Price Index
A measure of the price level of a defined “Basket” of consumer items purchased by households.
Simple Price Index
A measure that shows the relative change in a price or quantity of a single good with respect to time.
Simple Composite Index
Created when a researcher gathers data from many different sources without weighting any data more than the other.
Weighted Composite Index
Created when a researcher applies more weight to certain goods or services.
Cost – Effective Analysis
A goal is determined and the cost of achieving said goal is analyzed.
KPI – Key Performance Indicators
Key Performance Indicators – Dashboard featuring charts and graphs.
Advantages:
Able to educate management
Can be used for the entire organization
Data – driven, quantifies performance
Can be used for benchmarking over time
Disadvantages:
Expensive and time consuming
Requires ongoing maintenance
Small changes may seem significant, but in reality may not have an impact
Provides only a rough guide
Difficult to change
Balanced Scorecard
Include in a company guide some objections that may not affect the company’s current financial performance but do affect the company’s long term performance.
Advantages:
Improves organization alignment
Improves internal and external communication
Links company operations with its strategy
Emphasizes strategy and organizational results
Disadvantages:
Requires time and effort to establish a meaningful scorecard
Does not illustrate a full picture of the company performance, particularly financial data
Sometimes difficult to maintain momentum
Requires a wide cross-section of the organization departments in developing the system
May not encourage desired behavior changes
Decision Analysis or Decision Tree
Plots decisions that we can make and states of nature (What we don’t control, like market) Assigns probability based on research. What are the outcomes of the decisions.
Cluster Analysis
Plot dots, look for nature groups.
Bell Curve – Normal Distribution.
A bell curve follows the 68-95-99.7 rule, which provides a convenient way to carry out estimated calculations:
- Approximately 68% of all of the data lies within one standard deviation of the mean.
- Approximately 95% of all the data is within two standard deviations of the mean.
- Approximately 99.7% of the data is within three standard deviations of the mean.