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JAMNALAL BAJAJ INSTITUTE OF MANAGEMENT STUDIBS MMS FIRST YEAR - SECOFID SEMESTER EXAMTNATION (2010-11) SIJBJECT : DECISION SCIENCB
DATE :
Note:
15TH

t5

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I

APRIL,2011

Time: 3 hours

l. 2.

Answer any five of the 7 questions. Each of these questions carries 20 marks. Use of calculators is allowed.

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,r(.The mTlggment-9f a chain ofstores would like to develop a model for predictlng the $gekly sales:(in,l-akhs of Rupees) for individual stores based'on the number of customer-b *h-dj,lrnade purchases. A random sample of l0 stores was,selected from all the stores in the chain ah[ the i' following data was collected: Store Number of Customers Sales (Rs. Lakhs). ,';,
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2 3 4 s 6 7 8
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1,0
b)

926 506 740 890 420 620 845

907

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607

r 9.20 10.10 ;:' i, I'l 6.12 7.40 ;j,', i 10.23 ,i,

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e.33
7.64

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Assuming a linear relationship, use the least- squares method to

= a * bX to the l;. Interpret the meaning of the regression coefficient ]i Li, c)' Calculate the standard error of i};:,iiii d) Predict the average weekly sales if the number of eustomers who made purchases is 750. liil,lili e) What is the standard error of prediction? Make a95Yo confidence interval for the average vq|$e

data.

fit a regression line of the fpii" V

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b. regression.

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coerficient at a significance lever or 5%o.(t values: ro o ri, i 2.228,9 d.f - 2.262,8 d.f - 2.306) Can you use this regression equation for predictive purposes or search elsewhere for ad$itional explanalory variables? Use the sample coefficient of determination to support 1,our 4rhiiwer. , 1,, i:i , Critical F at 5 %o significance: d.f numerator; denominator F- value i ., ii'li, :' ' 4.26 '2,9
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4.46

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d)

Sotu. the following non- zero game using the dominance rule: Player B 84 B2 Player A

(Pay-offs given above are of the form pay- off to A, pay- off to B)'

83 BI Al 7,2 6,7 3,5 A2 1,8 3,7 4,5 A3 5, 1 5, 0 2,3 A4 4,4 3,2 5,1

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Year

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.4693 .4756
.4808 .4850 .4884

.4699 .4761;
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Extract frorn the unit normal loss table:

1.8 .01428 .01392.01357 .01323'.01290 .0t257 .029698 I .9 .01 I 05 .01077 .01049 :01022 .,029957 .o2i4t6 .027623 .027832 .028046 .028266 2.0 .028+9t

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Page2 of 4

3a) Given below is the partialregression output of value of inventory regressed on

Observations

sales:

ANOVA
Regression Residual Total

2-4

L+
Coefficients 2918.74 1.551128

.66504E+12 2165301488 1.66721E+12

1

Standard

Error
3449.41'1693 0.01 0970025

lntercept
Sales

(i) (ii) (iii) (iv) (v)

Write the regression equation. Test the significance of the individual regression coefficients. (t value s at significance:
.

5%o

26d.f_2.056,27d.f_2'052,28d.f_2'048,29d.f_2.045)
What is the standard error of regression? What is the coefficient of rnultiple determjnation (R2)? YP, .* you say about the significance of the regression as a whole?
F- value
4.225

Critical F values at 5% significance: d.f numerator, denominat-or 1,26 2,26 1,27 2,27

3.369

4.2t0
3.354 4.196

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(vi) (vii) (viii)

2,28

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autocorrelation?
LAa)

What is the coefficient of multiple correlation? Make a 95% confidence interval for the regression coefficient of sales. The Durbin- Watson slitistic for the abovJregression was obtained as I .404. lf dr ancl du at SYo significance are 1.328 and l47 6, would you say the data exhibits
:

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3b)Explainthemeaningofpartialregressioncoefficientsinrnultiplelinearregressionmodels what is the meaning of identification in simultaneous equation models? ,,,: 4b) Using the order condition for identification, comment on the identifiabilify of the following equdiion, and the system as a whole: Yrt = 0ro * ptzYz, * yrrXr, * TrzXz, * ur, ,,

Yz, = Fzo * Fzryr, lzzXzr* uz, Y1 and Y2 are endogenous variables una X, unO X, are pre- determined 4c) Explain the method of 2sLS for estimating simultaneous equation

models.

variables.

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of the following:

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meanin;il;;;;;[u.i."r^oiuuioconelation is prediction onlyl , Multicollinearity is harm.less. if th;;bjective of the regression consequences of multicollinearity' rvith lhe statement? Explain discussinglthe