Question

A manager uses the following equation to predict monthly receipts: Y-450-10 Lt time in weeks and y = receipts.) What is the forecast for July 14th ift=4 is the fourth week in January and t = 6 is February 14th of the same year (assume there are 4 weeks in each month)?

a. 690
b. 710
c. 730
d. 750
A major reason that decision making is often not such a rational process is that there are: Suppose we have H0:µ1= µ2 versus HA: µ1 ≠ µ2, with level of significance of α =.05 and critical values of zα/2 = ± 1.96, and the computed Test Statistics value of Z = -1.07. What is our decision?

Answer 1

b. 710

Fail to reject H0

Explanation:

Forecast for July 14 :

Assume there are 4 wwwks in each month :

January to June = ( 4 * 6 months) = 24 weeks in 6 months ;

July - July 14 = 2 weeks :

2 + 24 = 26 weeks

The model given :

Y = 450 + 10t

Y = 450 + 10(26)

Y = 450 + 260

Y = 710

2.)

Test is a 2 tail test :

Zstatistic = - 1.07

At 95% confidence = ±1.96

Zcritical = - 1.96

Hence,

Reject H0 if ;

Zstatistic < Zcritical

-1.07 > 1.96

Hence, fail to reject H0.