Business Analytics 6th Edition Camm
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Chapter 01: Introduction to Business Analytics
Multiple Choice
1. Which of the following best represents a strategic decision made by a company?
a. Determining the number of staff to schedule next week
b. Deciding the type of aircraft to purchase for future fleet expansion
c. Selecting the supplier for this month's raw materials
d. Adjusting the sales target for the current quarter
ANSWER: b
2. A store manager deciding how many cashiers to schedule is making which type of decision?
a. Strategic
b. Tactical
c. Operational
d. Predictive
ANSWER: c
3. Picks and Axes Inc. is an Internet-based retail seller of hiking boots and mountaineering gear. The company decides
to open retail stores across the major areas of the city to help complement its Internet-based strategy. This activity
would be categorized as a(n) _____.
a. tactical decision
b. operational decision
c. strategic decision
d. financial decision
ANSWER: c
4. What is the most critical step of the decision-making process?
a. Choosing an alternative
b. Identifying and defining the problem
c. Evaluating the alternatives
d. Determining the set of alternatives
ANSWER: b
5. Which of the following is NOT an approach to making decisions?
a. Tradition
b. Rules of thumb
c. Intuition
d. Guess and check
ANSWER: d
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Chapter 01: Introduction to Business Analytics
6. Data-driven decision making tends to decrease a firm's _____.
a. market value
b. productivity
c. risk
d. profit
ANSWER: c
7. An airline uses simulation to evaluate pricing strategies. This is an example of _____ analytics.
a. predictive
b. descriptive
c. prescriptive
d. decision
ANSWER: c
8. The extraction of information on the number of shipments, how much was included in each shipment, the date each
shipment was sent, and so on from the manufacturing plant’s database exemplifies _____.
a. spreadsheet models
b. data dashboards
c. data mining
d. data queries
ANSWER: d
9. Which of the following do corporate-level managers use to summarize sales by region, current inventory levels, and
other company-wide metrics all in a single screen?
a. Simulations
b. Cross-tabulations
c. Data dashboards
d. Tables
ANSWER: c
10. A forecast that helps direct police officers to areas where crimes are likely to occur based on past data is an example
of _____.
a. predictive analytics
b. decision analysis
c. prescriptive analytics
d. descriptive analytics
ANSWER: a
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Chapter 01: Introduction to Business Analytics
11. Which one of the following is used in predictive analytics?
a. Data dashboard
b. Linear regression
c. Data visualization
d. Optimization model
ANSWER: b
12. A retail store owner offers a discount on product A and predicts that the customers would purchase products B and C
in addition to product A. Identify the technique used to make such a prediction.
a. Data query
b. Simulation
c. Data mining
d. Data dashboards
ANSWER: c
13. Which of the following is used in the pharmaceutical industry to assess the risk of introducing a new drug?
a. Data dashboard
b. Chart
c. Spreadsheet model
d. Simulation
ANSWER: d
14. Which of the following analytical techniques helps us arrive at the best decision?
a. Predictive analytics
b. Data mining
c. Prescriptive analytics
d. Descriptive analytics
ANSWER: c
15. What makes Generative AI different from traditional AI?
a. It does not require data.
b. It generates new content such as text, images, or audio.
c. It only works in manufacturing.
d. It requires manual coding for every function.
ANSWER: b
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Chapter 01: Introduction to Business Analytics
16. A decision maker faced with several alternatives and an uncertain set of future events uses what to develop an
optimal strategy?
a. Utility theory
b. Predictive analytics
c. Data mining
d. Decision analysis
ANSWER: d
17. Which of the following is an example of AI being used behind the scenes in business?
a. Using ChatGPT to write reports
b. Recommendation engines suggesting online products
c. Handwriting notes in meetings
d. Filing taxes manually
ANSWER: b
18. Which of the following best exemplifies big data?
a. Five hundred Facebook users upload one thousand pictures per day.
b. Cellphone owners around the world generate vast amounts of data by calling, texting, tweeting, and browsing
the Web on a daily basis.
c. A local grocery store collects data from those that scan their loyalty card.
d. A pharmacy keeps track of customer purchases to send its customers coupons.
ANSWER: b
19. Which of the following sources of big data is NOT publicly available?
a. Twitter
b. Weather data
c. Medical records
d. Sports records
ANSWER: c
20. A company analyzes customer tweets and call recordings. This demonstrates which “V” of big data?
a. Volume
b. Variety
c. Veracity
d. Velocity
ANSWER: b
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21. In the financial sector, what models are used to construct financial instruments such as derivatives?
a. Descriptive and prescriptive
b. Predictive
c. Descriptive
d. Prescriptive
ANSWER: b
22. Optimization models can be used to _____.
a. assess the risk of investment portfolios
b. forecast future financial performance
c. successfully manage commercial real estate risk
d. decide on how to invest cash received from insurance policies
ANSWER: d
23. What does utility theory study that basically means the relative desirability of a particular outcome that reflects the
decision maker’s attitude toward a collection of factors, such as profit, loss, and risk?
a. Total worth
b. Total cost
c. Feasibility
d. Financial wellness
ANSWER: a
24. What is the main concern addressed by the veracity characteristic of big data?
a. The ethical use of algorithms
b. The real-time nature of streaming data
c. The uncertainty or trustworthiness of data
d. The size and scope of data
ANSWER: c
25. Which of the following best defines artificial intelligence in business analytics?
a. Making decisions with no human involvement
b. Using rules and formulas to make graphs
c. Using data and algorithms to enhance or automate decision making
d. Outsourcing decision making to external consultants
ANSWER: c
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26. An open-source programming environment that supports big data processing through distributed storage and
distributed processing on clusters of computers is _____.
a. Hadoop
b. Excel
c. Java
d. MapReduce
ANSWER: a
27. What techniques use models, constructed from past data, to predict the future or to ascertain the impact of one
variable on another?
a. Predictive analytics
b. Descriptive analytics
c. Simulation
d. Prescriptive analytics
ANSWER: a
28. Which type of decision involves higher-level issues and is concerned with the overall direction of the organization,
defining the overarching goals and aspirations for the organization’s future?
a. Strategic
b. Tactical
c. Intuitive
d. Operational
ANSWER: a
29. Which type of decision is concerned with how the organization should achieve the goals and objectives set by its
strategy?
a. Tactical
b. Strategic
c. Intuitive
d. Operational
ANSWER: a
30. What type of analytics uses techniques that take input data and yield a best course of action?
a. Prescriptive
b. Simulation
c. Strategic
d. Operational
ANSWER: a
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31. In the spectrum of business analytics, which is the most complex?
a. Descriptive
b. Predictive
c. Prescriptive
d. Operational
ANSWER: c
32. In order to manage an organization’s human resources activities, such as hiring employees, tracking, and influencing
employee retention, HR personnel use _____.
a. both descriptive and predictive analytics
b. both descriptive and prescriptive analytics
c. both predictive and prescriptive analytics
d. only predictive analytics
ANSWER: a
33. A clearer understanding of consumer behavior through analytics directly leads to _____.
a. more profits
b. better pricing strategies
c. reduced advertising costs
d. reduced risk
ANSWER: b
34. A light bulb manufacturer uses descriptive analytics to _____.
a. present supply chain to managers visually
b. achieve efficiency in delivery of goods
c. schedule staff and vehicle for delivery
d. plan capacity utilization by incorporating the inherent uncertainty in commodities pricing
ANSWER: a
35. What does the U.S. Internal Revenue Service use to identify patterns that distinguish questionable annual personal
income tax filings?
a. Utility theory
b. Prescriptive analytics
c. Data mining
d. Decision analysis
ANSWER: c
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Chapter 01: Introduction to Business Analytics
36. Which analytics technique is used by HR departments to forecast employee turnover?
a. Prescriptive analytics
b. Predictive analytics
c. Descriptive analytics
d. Supervised robotics
ANSWER: b
37. How do Coca-Cola Freestyle machines use business analytics?
a. To conduct employee evaluations
b. To track competitor pricing
c. To collect customer drink preference data
d. To encrypt beverage formulas
ANSWER: c
38. In supply chain analytics, what is the new focus beyond efficiency?
a. Employee training
b. Resiliency under disruption
c. Merging with HR analytics
d. Sentiment forecasting
ANSWER: b
39. According to INFORMS ethics, analytics professionals should _____.
a. prioritize speed over accuracy
b. withhold analysis from stakeholders
c. be objective and transparent
d. focus only on profits
ANSWER: c
40. What ethical problem arises from using biased data in modeling?
a. Models perform faster.
b. Models reflect outdated software.
c. Models lead to unfair decisions.
d. Models become more secure.
ANSWER: c
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