Data Analysis & Decision Making Flashcards
7 cards from real COM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Data Analysis & Decision Making flashcards as text
A quality team finds that 3 defect types account for 78% of all customer complaints. Which principle does this reflect?
Answer: Pareto principle (80/20 rule)
The Pareto principle holds that roughly 80% of effects come from 20% of causes, guiding teams to prioritize the vital few issues.
Which type of forecasting error metric penalizes large errors more heavily than small errors?
Answer: Mean Squared Error (MSE)
MSE squares each error before averaging, giving disproportionately higher weight to large errors compared to linear error metrics.
An operations manager suspects that two process variables are correlated. The Pearson correlation coefficient is calculated as -0.87. What does this mean?
Answer: There is a strong negative linear relationship
A Pearson r of -0.87 indicates a strong negative linear relationship: as one variable increases, the other decreases consistently.
When should an operations manager use a moving average forecast rather than exponential smoothing?
Answer: When all historical periods should be weighted equally and the series is stable
Moving averages apply equal weight to each period in the window, making them suitable for stable demand without strong trends or seasonality.
In a make-vs-buy analysis, which factor is a qualitative consideration that quantitative data cannot fully capture?
Answer: Risk to core competency and intellectual property protection
While cost data is quantifiable, strategic risks like loss of proprietary knowledge or dependency on suppliers require qualitative judgment.
A control chart shows a process with all points within control limits but eight consecutive points on the same side of the centerline. What does this indicate?
Answer: A non-random pattern suggesting a systematic shift in the process
Eight consecutive points on one side of the centerline is a Western Electric rule violation signaling a process shift or special cause, even without exceeding control limits.
An operations manager uses ABC analysis for inventory classification. What is the primary basis for classifying items as 'A' category?
Answer: Items with the highest annual consumption value (cost × volume)
ABC analysis classifies inventory by annual consumption value; 'A' items represent roughly 20% of SKUs but account for ~70–80% of total inventory value.