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Quantitative Analysis Flashcards

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1
Q

What is quantitative analysis?

A

The application of mathematical methods to business decision-making ## Footnote Also called quantitative methods; used in planning, forecasting, and resource allocation.

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2
Q

What are common applications of quantitative methods?

A

Corporate planning, forecasting, productivity measurement, inventory control, resource allocation ## Footnote These improve efficiency and decision quality.

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3
Q

What are network models?

A

Project scheduling tools for managing interrelated activities in large-scale projects ## Footnote Help predict costs and control timelines.

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4
Q

What are the three main project scheduling techniques?

A

Gantt Charts, PERT, and CPM ## Footnote Each offers a different approach to visualizing and managing project timelines.

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5
Q

What is a Gantt chart?

A

A horizontal bar chart showing activity durations along a time scale ## Footnote Useful for visualizing task sequences and overlaps.

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6
Q

What is PERT?

A

Program Evaluation and Review Technique — a probabilistic network model for complex projects ## Footnote Focuses on time uncertainty and event sequencing.

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7
Q

What is CPM?

A

Critical Path Method — a deterministic network model with time and cost estimates ## Footnote Includes crash time and cost analysis.

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8
Q

What is a critical path?

A

The longest path through a PERT/CPM network that determines project duration ## Footnote Any delay on this path delays the entire project.

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9
Q

What is slack time?

A

The time an activity can be delayed without affecting the project’s completion ## Footnote Also called float time.

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10
Q

What is crash time?

A

The shortest possible time to complete an activity using extra resources ## Footnote Usually incurs additional crash costs.

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11
Q

What is probability analysis?

A

A method for evaluating decisions under risk or uncertainty ## Footnote Uses expected value, decision trees, and probability rules.

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12
Q

What is expected value?

A

The weighted average of all possible outcomes based on their probabilities ## Footnote EV = Σ (probability × payoff).

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13
Q

What is a decision tree?

A

A diagram showing decisions, possible outcomes, and their probabilities ## Footnote Helps visualize and evaluate complex choices.

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14
Q

What is the difference between risk and uncertainty?

A

Risk has known probabilities; uncertainty has unknown or subjective probabilities ## Footnote Risk is quantifiable; uncertainty is not.

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15
Q

What is the learning curve?

A

A concept that efficiency improves with experience, reducing time per unit ## Footnote Time per unit decreases as production doubles.

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16
Q

What is linear programming?

A

A mathematical technique for optimizing an objective function under constraints ## Footnote Used to maximize profit or minimize cost given limited resources.

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17
Q

What is an objective function?

A

The formula representing the goal of optimization in linear programming ## Footnote Typically profit maximization or cost minimization.

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18
Q

What are constraints in linear programming?

A

Limitations or restrictions on resources or conditions ## Footnote Expressed as inequalities in the model.

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19
Q

What is the simplex method?

A

An algorithm used to solve linear programming problems with multiple variables ## Footnote Iteratively finds the optimal solution.

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20
Q

What is time series analysis?

A

A forecasting method using historical data patterns over time ## Footnote Identifies trends, seasonality, cycles, and irregularities.

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21
Q

What are the four components of a time series?

A

Trend, cyclical, seasonal, and irregular variations ## Footnote Each component helps explain fluctuations in data.

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22
Q

What is a moving average?

A

A smoothing technique that averages a fixed number of past data points ## Footnote Helps reduce short-term fluctuations in forecasting.

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23
Q

What is exponential smoothing?

A

A forecasting method that gives more weight to recent observations ## Footnote Controlled by a smoothing constant (alpha).

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24
Q

What is sensitivity analysis?

A

A technique to assess how changes in input affect outcomes ## Footnote Useful for evaluating risk and uncertainty in models.

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25
What is decision tree analysis?
A diagrammatic method for evaluating decisions under uncertainty ## Footnote Shows decisions, events, probabilities, and payoffs.
26
What is expected value of perfect information (EVPI)?
The value of knowing future outcomes with certainty ## Footnote EVPI = Expected value with perfect info – Expected value without it.
27
What is crashing in project management?
Reducing activity time on the critical path by adding resources ## Footnote Increases cost but shortens project duration.
28
What is the critical path in CPM?
The longest duration path through a project network ## Footnote Determines the shortest possible project completion time.
29
What is slack in PERT/CPM?
The time an activity can be delayed without delaying the project ## Footnote Slack = Latest Start – Earliest Start.
30
What is the learning curve formula?
y = ax^b, where y = time for xth unit, a = time for first unit, b = log(learning rate)/log(2) ## Footnote Shows how time per unit decreases with experience.
31
What is objective probability?
A probability based on logic or historical data ## Footnote Derived from actual experience or statistical analysis.
32
What is subjective probability?
A probability based on personal judgment or opinion ## Footnote Used when no historical data is available.
33
What does it mean when two events are mutually exclusive?
They cannot occur at the same time ## Footnote Example: flipping a coin — heads and tails are mutually exclusive.
34
What does it mean when two events are independent?
The occurrence of one does not affect the probability of the other ## Footnote Example: rolling two dice.
35
What is joint probability?
The probability that two events occur together ## Footnote For independent events: P(A and B) = P(A) × P(B).
36
What is conditional probability?
The probability of one event given that another has occurred ## Footnote P(A|B) = P(A and B) ÷ P(B).
37
What is queuing theory?
A mathematical study of waiting lines or queues ## Footnote Helps optimize service efficiency and customer wait times.
38
What is dynamic programming?
A method for solving complex problems by breaking them into simpler subproblems ## Footnote Used in multistage decision-making.
39
What is Monte Carlo simulation?
A technique using random sampling to estimate outcomes in uncertain scenarios ## Footnote Useful for risk analysis and forecasting.
40
What is exponential smoothing?
A forecasting method that applies decreasing weights to older data ## Footnote Controlled by a smoothing constant (alpha).
41
What is the Delphi technique?
A structured communication method using expert consensus for forecasting ## Footnote Involves multiple rounds of anonymous input.
42
What is the difference between deterministic and probabilistic models?
Deterministic models assume certainty; probabilistic models incorporate uncertainty ## Footnote CPM is deterministic; PERT is probabilistic.
43
What is the value of perfect information?
The maximum amount a decision-maker would pay to know the future with certainty ## Footnote Helps evaluate the benefit of additional data.
44
What is the purpose of sensitivity analysis?
To test how changes in inputs affect outcomes ## Footnote Identifies critical variables in decision models.
45
What is the role of quantitative analysis in business?
To support decision-making through mathematical modeling and data analysis ## Footnote Enhances objectivity, efficiency, and accuracy.
46
What linear programming method is best for solving problems with multiple variables?
Simplex method ## Footnote An iterative algorithm used when two or more decision variables are present.
47
In linear programming
what is the mathematical expression representing the goal?
48
Which technique is used to forecast trends with seasonality and cycles?
Time series analysis ## Footnote Recognizes trend, cyclical, seasonal, and irregular patterns in data.
49
Which project scheduling technique uses deterministic time and crash costs?
Critical Path Method (CPM) ## Footnote Unlike PERT, CPM uses fixed time and allows cost-time tradeoffs.
50
Which project diagram shows interrelated events in free-form layout?
PERT Diagram ## Footnote Probabilistic model emphasizing activity relationships and event sequencing.
51
In network analysis
what defines the longest sequence of dependent tasks?
52
What is the formula to compute expected value?
Σ (Probability × Payoff) ## Footnote Weighted average used in decision-making under risk.
53
What quantitative method is used for sequential outcomes with associated probabilities?
Decision tree analysis ## Footnote Visual decision model for evaluating choices and outcomes.
54
What does an activity’s slack time represent?
Delay allowable without affecting project completion ## Footnote Slack = Latest Start – Earliest Start; applies to non-critical paths.
55
Which forecasting method smooths data by averaging recent observations?
Moving average ## Footnote Newest data added, oldest dropped, helpful in reducing volatility.
56
What analysis shows how outputs change with varying assumptions?
Sensitivity analysis ## Footnote Identifies key risk variables; used in budgeting and simulation.
57
Which type of probability is based on personal judgment?
Subjective probability ## Footnote Used when no historical data is available; relies on expert estimation.
58
Which two events cannot occur at the same time?
Mutually exclusive events ## Footnote Example: A coin showing heads or tails.
59
What type of queuing system helps model service efficiency?
Queuing theory ## Footnote Studies waiting line behavior to optimize resources and wait time.
60
If learning curve rate is 80% and first unit takes 100 hours
how many hours for the 16th unit?
61
Which quantitative technique allocates resources to maximize profit or minimize cost?
Linear programming ## Footnote Uses mathematical models to optimize an objective function under constraints.
62
What are the four components of a time series?
Trend, cyclical, seasonal, and irregular ## Footnote These explain patterns in historical data for forecasting.
63
Which technique models sequential events with multiple outcomes?
Decision tree analysis ## Footnote Visualizes decisions, probabilities, and payoffs.
64
What is the expected value of perfect information (EVPI)?
The difference between expected value under certainty and expected monetary value under uncertainty ## Footnote Measures the value of eliminating uncertainty.
65
What is crashing in project scheduling?
Adding resources to reduce activity time on the critical path ## Footnote Increases cost but shortens project duration.
66
In PERT
what is slack time?
67
What is the critical path in a PERT network?
The longest path through the network ## Footnote Determines the minimum project duration.
68
Which technique is best for forecasting with trend and seasonality?
Time series analysis ## Footnote Captures recurring patterns and long-term direction.
69
Which formula represents the learning curve?
y = ax^b ## Footnote y = time for xth unit; a = time for first unit; b = log(learning rate)/log(2).
70
What is the optimal product mix when resources are limited?
The combination that maximizes contribution margin per unit of limiting factor ## Footnote Solved using linear programming.
71
What is the expected payoff formula?
Σ (Probability × Payoff) for all outcomes ## Footnote Used in decision-making under risk.
72
What is the best decision rule under uncertainty with known probabilities?
Expected value analysis ## Footnote Selects the act with the highest expected payoff.
73
Which technique evaluates how changes in assumptions affect outcomes?
Sensitivity analysis ## Footnote Identifies critical variables in decision models.
74
What is the purpose of a decision tree?
To evaluate decisions and outcomes under uncertainty ## Footnote Shows branches for acts, events, and payoffs.
75
What is the best scheduling method when tasks depend on each other?
PERT-CPM ## Footnote Models task dependencies and identifies critical path.
76
Which constraint is violated if X = 500 and Y = 600 in the system: 3X + 5Y ≤ 4
200 and 5X + 2Y ≥ 3
77
What is the feasible range for Y if 3X + 5Y ≤ 4
200 and 5X + 2Y ≥ 3
78
What is the optimal product mix when Product X and Y use limited materials A and B?
120 units of X and 40 units of Y ## Footnote Solves for max contribution margin under material constraints.
79
What is the net profit from the best product mix of X
Y
80
What is the best product mix for maximizing profit under 180
000 hours?
81
What is the expected payoff for selling coffee if cold weather has 60% probability?
P1,960 ## Footnote (0.6 × 2,000) + (0.4 × 1,900) = 1,960.
82
What is the expected payoff with perfect information in the beverage stand problem?
P2,200 ## Footnote Choose best product per weather: cold = coffee (2,000), hot = soft drinks (2,500); EV = (0.6 × 2,000) + (0.4 × 2,500).
83
How much is the value of perfect information in the beverage stand problem?
P240 ## Footnote EVPI = 2,200 – 1,960.
84
What is the earliest completion time for a project with activities A–E?
14 days ## Footnote Critical path is A → C → E = 5 + 4 + 6 = 15; but A → C → E is delayed by D = 2, so total = 14.
85
Which activities should be crashed to minimize penalty and cost in Job 101?
Crash DE 1 week and EF 1 week ## Footnote Minimizes penalty cost while keeping crash cost lowest.
86
What is the cost of crashing DE by 1 week and EF by 1 week?
P18,800 ## Footnote DE = 10,000; EF = 8,800.
87
What is the penalty avoided by crashing Job 101 by 2 weeks?
P21,000 ## Footnote P10,500 per week × 2 weeks.
88
What is the expected value of selling soft drinks in the beverage stand problem?
P1,600 ## Footnote (0.6 × 1,000) + (0.4 × 2,500).
89
What is the best act under uncertainty in the beverage stand problem?
Sell coffee ## Footnote Higher expected value (1,960 vs 1,600).
90
What is the learning curve time for the 16th unit if first unit takes 100 hours and rate is 80%?
Approximately 40.96 hours ## Footnote y = 100 × 16^log(0.8)/log(2).

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