Find the Degree of Operating Leverage and the breakeven quantity.

Answer: DOL= Q(P-AVC)/Q(P-AVC)-TFC,

Distinguish between short-run and long-run production decisions and illustrate their impact on costs and economies of scale.

Short Run Production system

Period of time where some factors of production (inputs) are fixed, and constrain a manager's decisions.

Explain the difference between and the economic relevance of fixed costs, sunk costs, variable costs, and marginal costs.

Answer: Sunk Cost: are those costs that are forever lost after they have been paid. Variable Cost: costs that change as output changes. Marginal Costs: Cost of one more output

Explain the difference between and the economic relevance of fixed costs, sunk costs, variable costs, and marginal costs.

Answer: Sunk Cost: are those costs that are forever lost after they have been paid. Variable Cost: costs that change as output changes.

Calculate a cost function from a production function and explain how economic costs differ from accounting costs.
For the cost function C(Q) = 629.0 + 22.0Q + 10.0Q2, the marginal cost of producing 4.0 units of output is:

A. 22

B. 100

C. 102

D. 62

Economic accounts for implicit costs while accounting doesnt.

Calculate input demand and the cost-minimizing combination of inputs and use isoquant analysis to illustrate optimal input substitution.

Answer: Isoquants

combinations of inputs that yield the same output in the long run, when all inputs are variable.

Marginal product (MP) - The change in total product (output) attributable to the last unit of an input.

-Marginal product of labor: MPL = ∆ Quantity/ ∆Labor

-Marginal product of capital: MPK = ∆Quantity/ ∆Capital

Average product (AP) - A measure of the output produced per unit of input.

-Average product of labor: APL = Q/L

-Average product of capital: APK = Q/K

Explain alternative ways of measuring the productivity of inputs and the role of the manager in the production process.

Answer: Total product (TP) - Maximum level of output that can be produced with a given amount of inputs.

Describe the relationship between Marginal Revenue and the Own Price Elasticity of Demand.

Marginal revenue measures the additional revenue due to a change in output.

Marginal revenue = Equilibrium Price ( 1+Elasticity/Elasticity)

Own price elasticity of demand

Measures the responsiveness of a percentage change in the quantity demanded of good X to a percentage change in its price.

Discuss three factors that influence whether the demand for a given product is relatively elastic or inelastic.

1. Availability of consumption substitutes, 

2. Time/Duration of purchase horizon, 

3. Expenditure share of consumers' budgets

Describe the relationship between the Elasticity of Demand and Total Revenues.

Total Revenue = [ Revenue from product X( 1 + Elasticity of Demand for Product X) + Revenue from product Y(Elasticity of Demand for Product Y) ]

Apply various elasticities of demand as a quantitative tool to forecast changes in revenues, prices, and/or units sold.

X > 1 elastic X < 1 inelastic X = 1 unitary elastic

When the value of elasticity is greater than 1, it suggests that the demand for the good or service is affected by the price. A value that is less than 1 suggests that the demand is insensitive to price.

Calculate consumer surplus and producer surplus, and describe what they mean.

The extra value a consumer gets from a good but does not have to pay for it. This "surplus" results from the fact that consumers would be willing to pay more for the good but can buy at the current market price.

The amount producers receive in excess of the amount necessary to induce them to produce the good.

Explain the laws of demand and supply, and identify factors that cause demand and supply to shift.

- Income

- Price of related goods

- Advertising and consumer tastes

- Population

- Consumer expectations

Price and quantity demanded are inversely related; that is, as the price of a good rises (falls) and all other things remain constant, the quantity demanded of the good falls (rises)

Explain the laws of demand and supply, and identify factors that cause demand and supply to shift.

Law of supply

As the price of a good rises (falls), the quantity

supplied of the good rises (falls), holding other

factors affecting supply constant.

Supply Shifters

- Input prices

- Technology or government regulation

- Number of firms

- Substitutes in production

- Taxes

- Producer expectations

The quantity of a good consumers are willing and able to purchase increases (decreases) as the price falls (rises)

Apply marginal analysis to determine the optimal level of a managerial control variable.

Optimal managerial decisions involve comparing the marginal (incremental) benefits of a decision with the marginal (incremental) costs.

MNB(Q)= MB(Q) - MC(Q)

To maximize net benefits, the manager should increase the managerial control variable up to the point where marginal benefits equal marginal costs.

Accounting Profit = Total Revenue - Explicit Costs

A company's total earnings, calculated according to generally accepted accounting principles (GAAP).

Find economic and accounting profits and costs

Economic Profit = Total Revenue - (Explicit Costs + Opportunity Costs)

are a signal to resource holders where resources are most highly valued by society

Summarize how goals, constraints, incentives and market rivalry affect economic decisions

1. The first step in making sound decisions is to have well-defined goals.

2. The second step is knowing the constraints of achieving those goals.

Describe Fiscal Policy

Answer: The tools used to influence monetary policy, i.e. government expense, taxation

Describe Monetary Policy

Answer: process how the government controls the money i.e. discount rate, reserve ratio

List and identify some of the measures of Inflation

Answer: Consumer Price Index (CPI), Producer Price Index (PPI), GDP Price Deflator, Employment, Business Cycle

Define an Employed and Unemployed person according to the Bureau of Labor Statistics.

Employed: did any work as paid employees, worked in their own business or profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of their family; or were not working but who had jobs from which they were temporarily absent.

Unemployed: All persons who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find employment some time during the 4 week period ending with the reference week. Persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed.

Identify the phases of a Business Cycle

Answer: Peak, Recession, Trough, Boom

Identify the components of GDP released by the Bureau of Economic Analysis

Answer: Consumption, Investment, Government Purchase, Net Exports

Describe the current local economic condition

Answer: FREIDA

Explain the use of the AIDA approach in designing a persuasive message.

Answer: attention, interest, desire, action

Describe the structure and purpose of an internal proposal and explain how it is a form of persuasive writing.

Answer: A proposal is a document written to persuade readers that this proposal will solve a problem or fulfill a need of theirs.

Describe the characteristics of an effective persuasive essay.

Answer: It attempts to convince an audience to adopt the writers point of view or take a particular action. It might entail the challenges, benefits, how to handle training + support.

Describe the structure and purpose of a feasibility report and compare it to a proposal.

Answer: the author of a feasibility report has less at stake than the author of an internal proposal. Feasibility report is when organizations consider a new project and ask if it is necessary, if they have enough staff and funds, is it legal?

Explain the relationship between correlation and causation.

Answer: correlation can suggest causation but does not imply it

Define the coefficient of determination or r-squared; explain its meaning for regression and its relationship with the correlation coefficient.

-coefficient of determination, means that __% of the variable in the dependent variable is explained by the independent variable

-how close the data is to the fitted regression line.

Define the correlation coefficient and the range of values possible for the correlation coefficient.

-it is the square of the correlation coefficient between the independent & dependent variable

-it cannot be greater than one

-it measures the goodness-of-fit of the regression

Compare positive, negative, and lack of correlation.

Answer: correlation can be expressed on a range from +1 to -1

Define residual and the use of residual in measuring the accuracy of a regression line.

Answer: the difference between the actual value & the value predicted by the regression.

Describe the regressional line and regression coefficients

Regressional coefficients -

the general name given to the slope and the intercept; often refers only to the slope Regressional Coefficients -

rise over run, how each point is effected by dependent & independent variables

Describe the relationship between a regression line and a scatter plot graph.

Answer: it minimizes the sum of squared distances between the data points and the line

Describe the purpose and process of linear and multiple regression.

Answer: linear - the use of data from an independent variable to predict the data for the dependent variable Multiple - the use of more then one independent variable to make predictions about ONE dependent variable

Explain the calculation and use of a moving average.

Answer: when tracking data over time, you want to find the average of the last three values.

Explain the use of percentiles and quartiles to describe data.

percentiles -

you can find the value where half the data set is above the value & half the data set is below, that would be in the 50th.

quartiles -

if you wanted to find a value at every quarter

Define standard deviation and compare it to variance.

Answer: The square root of the average squared deviation from the mean OR the distance a number is from the mean. Standard deviation is the square root of variance.

Define and explain the calculation of variance and the difference between population and sample variance.

1) subtract the mean from each score (result is a standard deviation)

2) average the deviations (if the average is large we have variability)

3) if deviations have minus signs square them

4) the average of the squared deviations if variance

Population Variance - all members of a specific group. Sample Variance - a part of a population that is used to describe the characteristics of the whole population

Define and explain the proper use of three measures of central tendency.

mean - center set of numbers, median- when you have a outlier, it won't throw everything off, mode -

could possible have two

Contrast three ways of obtaining/retaining high quality data.

1) keep bad data out of the database/ list

2) proactively look for bad data already entered

3) let the bad data find you & then fix it

Explain data completeness.

Answer: No records are missing and that no records have missing data elements.

Explain data comparability.

Answer: Is it appropriate to combine several databases into a data warehouse to facilitate the data's use in 1) exploratory analyses 2) modeling 3) statistical explanation

Explain data timeliness.

Answer: how current does this information need to be to predict...? how do delays effect the use of data?

Explain data accuracy.

Answer: what are likely to be the main variables of interest? how accurate does our data have to be to predict outcomes?

Explain data relevance.

Answer: does the data meet the basic needs for which they were used? can the data be used for additional purposes?

Define "high quality data" from the perspective of the employee and the client.

Answer: role of the employee doing the work (conformance to standards) to the client receiving the product (fitness for use).

Describe steps that can address data limitations.

Answer: Clearly articulate the assumptions you're making., identify gaps in the data or questions about data accuracy, put error ranges around that suspect data and assess how much that could change the decision you're trying to make, triangulate in and confirm the decision using different data sets.

Describe six questions that should be asked when evaluating external data.

1. The data provider's purpose
2. Who is the the data collector
3. When the data was collected
4. How the data was collected
5. What data was collected
6. Whether this data relate to other data

Describe 4 problems with the 5 whys approach.

Answer: Not data driven so its not repeating, biasing the results, effectiveness if limited to personal experience, doesn't account for multiple causes, is okay for simply issues but you should use a more data driven tool for high risk or important problems.

Describe 4 benefits of the 5 whys approach.

Answer: Easy to teach, easy to use, introduces people to problem solving methods, prevents band-aid solutions

Explain how a thought map is used in root cause analysis and how it differs from the 5 whys.

Answer: A thought map doesn't make the assumption that there is only one cause for the symptoms, it fully explores other causes

Explain the 5 whys approach to root cause analysis.

Answer: Asking why 5 times will usually get you to the root cause of the problem/symptoms

Describe the 6 P's sometimes used in a fishbone diagram and assign a cause to the appropriate P.

Answer: people, process, policy, plant, program, product

Describe the 6 M's sometimes used in a fishbone diagram and assign a cause to the appropriate M.

Machine (equipment, technology)

Method (process)

Material (includes raw material, consumables, and information)

Man / mind power (physical or knowledge work, includes: kaizens, suggestions)

Measurement / medium (inspection, environment)

Describe the structure of the typical fishbone diagram.

Answer: The defect is shown as the fish's head, facing to the right, with the causes extending to the left as fishbones; the ribs branch off the backbone for major causes, with sub-branches for root-causes, to as many levels as required.

Identify the other names for the fishbone diagram.

Answer: Ishikawa diagram, herringbone diagrams, cause-and-effect diagrams, or Fishikawa

Compare the use of different types of charts (column, line, pie, area, and scatter) and the types of data that are best displayed by each.

Answer: Column - if your data can be arranged into rows or columns. Line - wanting to show a trend. Pie - to compare a set of data, a pie chart can be quite useful. The idea here is just like that of a physical pie. Everything adds up to a whole pie. Area - if you have data that can be arranged into a table. Scatter - If you have a lot of data that isnt dependent on time values

Explain how to create and name a table in Excel and why having tables is useful in creating equations or using functions.

Answer: Highlight all the data you want to be included click insert, table, click on my table has headers. If entries are added to the table in the future they are automatically included in the equation or function.

Explain how independent and dependent variables are usually graphed on an x-y chart.

Answer: an independent variable goes on the horizontal, or x-axis, and a dependent variable goes on the vertical, or y-axis.

Differentiate between a dependent and independent variable in estimation.

Answer: An independent variable doesn't depend on anything else, on any other events or variables. In a study, it's what a researcher manipulates. A dependent variable depends on at least one independent variable. It's what a researcher measures.

Define, recognize examples of, and differentiate between four types of data: nominal or categorical, ordinal, interval scale, and ratio scale.

Answer: Nominal - numbers are identifiers with no real meaning, Ordinal - numbers take on meaning and a bigger number means more of some property than a smaller number but the exact differences are meaningless. On an interval scale the differences between numbers are meaningful but the value of zero has no meaning. On a ratio scale the numbers include a meaningful zero point, the total absence of a measured property.

Explain the use of the $ (dollar sign) in Excel cell references and how this will impact the result when a formula is dragged using the fill bar.

Answer: $ Anchors a column/row in excel and prevents excel from wanting to look elsewhere for the data needed to perform the function when dragging.

Explain the use of Excel functions and the use of cell references as arguments.

Answer: =sum(A1:B5) Sum is the function and the cell numbers in parentheses are called arguments.

How should a balanced scorecard be used?

Answer: To identify the companies vision, mission and values to set up the framework for goals, objectives, and strategies. Used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions

Describe common mistakes to avoid when developing/determining an organization's KPIs. The "don'ts".

Answer: Don't set KPI's that are irrelevant, set too many KPI's, keep KPI's hidden, copy KPI's from another company, be too brief or descriptive, choose a time frame regardless of external factors, and don't be too narrow about your measurement.

Describe the characteristics of a good KPI.

Answer: Create effective KPI by making a list of strategic goals/success indicators, choose a period that is representative of what you are measuring, choose the unit of measurement carefully, pay attention to the results of your KPI's to ensure theyre readable, relevant, and standardized.

Define a dashboard and compare it to a scorecard.

Answer: All the goals, measures, and targets for your strategic plan are on the scorecard, the visual representation of your measures, goals, and targets.

Understand the role of source and frequency in the use of KPIs.

Answer: Source (Identify where the data is coming from) and Frequency (How often you plan to report on the KPI).

Differentiate between indicators that are raw numbers, progress related, and directional.

Answer: Raw #'s is raw data aka # of things, Progress is % complete of a project, directional/change is a change in data aka % increase in sales

Differentiate between leading and lagging indicators.

Answer: Leading (driver) indicators that can predict the outcome of a process, Lagging indicators (has occurred) that present the success or failure post hoc.

Define key performance indicators (KPIs).

Answer: KPI is a type of performance measurement that evaluate the success of an organization or of a particular activity. 4 things needed for a KPI - Measurements, Targets (Numeric value we want to achieve), Source (Identify where the data is coming from) and Frequency (How often you plan to report on the KPI).

Describe the four areas of the balanced scorecard and explain how the parts interact.

Answer: Finance (how do we look to our shareholders), Customer (how do our customers see us), Internal Processes (determines how well the business is running and if we're providing what they want) Knowledge & Growth (how can we improve and create value) this all helps to map out the vision and strategy.

Describe five common pitfalls in critical thinking.

Answer: Jumping to answers too quickly, being unwilling to expand the problem space, focusing on the unimportant, taking analytical results at face value, not thinking of the future consequences of your problem because of your recommendation.

Describe how to prioritize the use of resources in critical thinking.

Answer: When conducting an analysis focus on tasks that will have the most impact on the problem you are facing.

Explain and apply the 80/20 rule to choosing what analysis to do and what problems to solve.

Answer: 20% of the drivers will drive 80% of the results. Focus resources on problems or drivers that affect a majority of the results.

Explain and apply the "7 so whats" approach to solution generation.

Answer: A thinking tool used to outline the consequences of an action.

Explain and apply the "5 whys" approach to problem identification.

Answer: The 5 whys allow us to ask why and really understand the cause, the 4th or 5th why is where you'll find the real insight/root cause of symptoms

Differentiate between business model blow-up, revenue blow-up, and cost blow-up.

Answer: On the business model blow-up, fundamentally rethink about how you go to market. Even rethink what your market actually is. You're going to challenge the entire business model for the way you deliver products and services. On the revenue blow-up side, how do you dramatically expand the products, your pricing, the geography, the reach of your business? And on the cost blow-up, how do you challenge the business model and what you're spending money on? How do you fundamentally eliminate drag from the business to become much more efficient?

Differentiate between symptoms and causes, including the role of chronology.

Answer: A cause is the root of a problem and symptoms are a result of the root cause of the problem. Chronology is laying out that path that says, if I do this, then this might happen, then this might happen, is going to help you predict some of the outcomes that you could face, and if those might be bad outcomes, it can impact the type of recommendation you make in the first place

Describe three ways to view a problem through a different lens.

Answer: Can you change your point of view (different perspectives of the problem), context (can you imagine the problem in new ways), and reality (ask what if?)?

Explain what it means to ask the question behind the question.

Answer: Seek to understand why you're asked to look at something, then ask why again to get a deep understanding of what causing issue which will avoid solving symptoms and more on causes of the symptoms.

Describe the contents and purpose of the problem statement.

Answer: It's going to spell out your goals. It will lay out boundaries on the problem solving space. It will define success criteria. Your problem statement should spell out the constraints you're going to face. It should articulate your assumptions, who the stakeholders are, and any timelines that you're going to face.