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Hindle, Tim. Guide to Management Ideas & Gurus, 2008, p235-236, 2p;
Date: 2008-01-01T00:00:00.00

Author: Kevin Gaunt

New Zealand Management 54.10 (Nov 2007): p28(2).
Date: 2007-11-01T00:00:00.00

J. B. Ritchie; Scott C. Hammond

Source: Journal of Management Inquiry, Mar 2005; vol. 14: pp. 6 - 12.
Date: 2005-03-01T00:00:00.00

Kim Knutson
Source: Journal of Leadership and Organizational Studies, Jan 1999; vol. 6: pp.
122 - 127.
Date: 1999-01-01T00:00:00.00

Management/Leadership Styles

Author: HAYNES, THOMAS

QRB Quiz

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QRB Quiz
--------------------------------------------------------------------------------

1.1 If the formula for Return on Equity (ROE) is made of three factors [Net Income
(NI) divided by Sales (S), Sales (S) divided by Total Assets (TA), and Total
Assets (TA) divided by equity (E)] that are then multiplied by each other, the
mathematical formula is:
A) ROE=NI/S+S/TA+TA/E
B) ROE=NI/S*S/TA*TA/E
C) ROE=NI*S/S*TA/TA*E
D) ROE=NI-S*S-TA*TA-E

1.2 Given the accompanying demand data, use the formula below to compute price
elasticity of demand for the product price of $5 and product price of $4.

Product Price Quantity Demanded

$5 1
$4 2
$3 3
$2 4
$1 5

Use the below formula to determine the price elasticity of demand.

A) 5
B) 4
C) 3
D) 2

1.3 In considering break even for a business, we are looking for the point where
fixed cost equals the number of units sold multiplied by the price per unit less
the variable cost per unit. What is the independent variable?
A) Fixed Cost
B) Price
C) Number of Units
D) Variable Cost

--------------------------------------------------------------------------------

2.1 Refer to the variables below, which reports information on homes sold in the
Denver, Colorado, area last year. Consider the following variables: selling price,
number of bedrooms, township, and distance from the center of the city. Determine
the level of measurement for each of the variables.
--------------------------------------------------------------------------------
X1 = Selling price in $000
 A) Ratio
B) Nominal
C) Ordinal
D) Interval

X2 = Size of home in sq feet

A) Ratio
B) Nominal
C) Ordinal
D) Interval

X3 = Pool (1 = yes, 0 = no)

A) Ratio
B) Nominal
C) Ordinal
D) Interval

X4 = Rating guide score of local schools

A) Ratio
B) Nominal
C) Ordinal
D) Interval

X5 = Distance from the center of the city

A) Ratio
B) Nominal
C) Ordinal
D) Interval

X6 = Township
A) Ratio
B) Nominal
C) Ordinal
D) Interval

X7 = Township number
A) Ratio
B) Nominal
C) Ordinal
D) Interval

2.2 If the formula for calculating net income (profit) using fixed cost(Fc),
variable cost(Vc), price(P), and units sold(U) is NI=U(P-Vc)-Fc, then if the
profits of a company are $100 when sales are $1000 (100 units at $10 each), and
$80 when sales are $800 (80 units at $10 each), which formulas below are used to
determine Fixed Cost and Variable Cost?
A) 100=100(10-Vc)-Fc & 80=80(10-Vc)-Fc
B) 100=1000(10-Vc)-Fc & 80=800(10-Vc)-Fc
C) 1000=100(10-Vc)-Fc & 800=80(10-Vc)-Fc
D) 1000=1000(10-Vc)-Fc & 800=800(10-Vc)-Fc

2.3 Sales for the past five years have been: $80.00, $120.00, $180.00, $270.00,
$405.00. Based on this rate of growth, next years sales should be:
A) $810.00
B) $540.00
C) $607.50
D) $600.00

Return to top

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3.1 The following table contains data on the relationship between saving and
income. These data are rearranged into a meaningful order and graphed on the
accompanying grid. What would you predict saving to be at the $12,500 level of
income? Income per Year Saving per Year
$0 $-500
$5,000 $0
$10,000 $500
$15,000 $1000
$20,000 $1,500

A) $650
B) $700
C) $750
D) $900

3.2 The slope intercept formula in mathematical form is y=mx+b. The slope in this
case is m, and determines how much increase there is in y from an increase in x.
In cost volume profit, the formula is profit=margin per unit times the number of
units less fixed costs. Here fixed costs are essentially a negative value for b in
the basic formula. When profits are $100 and fixed costs are $200 if the company
sells 50 units, what is the slope of the line that creates?
A) $5 per unit
B) $100
C) $200
D) $6 per unit

3.3 Linear regression is a mathematical tool that is used to represent the

relationship between independent and dependent variables algebraically. Businesses
should make extensive use of this tool in formulating strategy; True or False?
True
False

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4.1 Suppose you just won a lottery for $1 million, payable in annual installments
of $200.000 with the first payment made in one year. Alternatively, you could
accept $850,000 today. Regardless of whether you take the $200,000 annually or the
$850,000 today, you are confident you could earn 8% each year on the payout for
the next five years. If your objective is to have the most money at the end of
five years, what should you do?
A) Take the million dollars in five installments because one million dollars
compounded at 8% for five years is greater than $850,000 compounded at 8% over
five years.
B) Take the $850,000 today because it is greater than the present value of the
five $200,000 annual installments discounted at 8%.
C) Take the million dollars in five installments because invested the $200,000
you get each year at 8% will give you a greater amount at the end of five years
than investing $850,000 today at 8% for five years.
D) Take the $850,000 today because the present value of the five $200,000 annual
installments discounted at 8% is greater than $850,000.

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5.1 Molly�s Candle Shop has several retail stores in the coastal areas of North
and South Carolina. Many of Molly�s customers ask her to ship their purchases. The
following chart shows the number of packages shipped per day for the last 100
days.

What is the class interval? What is the class frequency for the 10 up to 15 class?

A) 28 and 5
B) 15 and 25
C) 7 and 28
D) 5 and 25
E) 5 and 28

5.2 Match the actions listed below with the appropriate math concept:

--------------------------------------------------------------------------------
Calculating the average wage cost
Mode Median Mean

Determining the most frequent number of sales/week by sales personnel

Mode Median Mean

Identifying the minimum service score received on half of all responses

Mode Median Mean

5.3 Last month the following seven homes sold in your town. Each selling price is
in thousands of dollars: $180, 250, 195, 140, 375, 3500, 425. What is the median
and mean selling price?
A) $250 and $724
B) $245 and $719
C) $255 and $729
D) $240 and $714

5.4 Wear Ever Tire Company randomly selected 1000 customers who bought new sets of
tires from its dealers across the country and had them record when the first tire
needed to be replaced due to wear. From these data they calculated that the mean
mileage was 32,000 miles and the standard deviation was 4,000 miles. Recently a
customer who bought a set of tires needed to replace a tire due to wear at 18,000
miles. Which of the following statements is true?
A) The customer could expect to replace a tire at 18,000 miles.
B) This is very unlikely; this should happen in fewer than 3% of the cases.
C) There may be something wrong with the tire production with this batch of
tires.
D) Both B and C should be considered true by the management of Wear Ever Tire
Company.

--------------------------------------------------------------------------------

6.1 In business, we often reduce risk by creating a portfolio which includes a mix
of investments with high, medium, and low risk. Each of these categories has an
estimate of what return we expect as well. The creation of these estimates often
relies on probability concepts. How should probability estimates be created to
reduce risk the most?
A) Gathering and evaluating data using statistics.
B) The best guess of management.
C) Last year�s performance.
D) Random Number.

6.2 CRA CDs, Inc. wants the mean lengths of the �cuts� on a CD to be 135 seconds
(2 minutes and 15 seconds). This will allow the disk jockeys to have plenty of
time for commercials within each 10-minute segment. Assume the distribution of the
length of the cuts follows the normal distribution with a standard deviation of 8
seconds. Suppose we select a sample of 16 cuts from various CDs sold by CRA CDs,
Inc. What can we say about the shape of the distribution of the sample mean?
A) 67% of the sample means will be between 127 seconds and 143 seconds.
B) 95% of the sample means will be between 127 seconds and 143 seconds.
C) 99% of the sample means will be between 127 seconds and 143 seconds.
D) 100% of the sample means will be between 127 seconds and 143 seconds.

6.3 A market basket of goods and services cost $1500 to purchase in the year 2000.
The same market basket of goods and services cost the following in the next
several years:

2001 $1560.00
2002 $1606.80
2003 $1687.14
2004 $1737.75

From these data it is possible to create a consumer price index with the purchase
price of the goods and services in the year 2000 set equal to 100. If so, rounded
to the nearest integer, what is the value of the consumer price index for the year
2004?
A) 174
B) 116
C) 1737
D) 100

leader and manager informations:

Managers and leaders are two very different types of people. Managers' goals arise
out of necessities rather than desires; they excel at defusing conflicts between
individuals or departments, placating all sides while ensuring that an
organization's day-to-day business gets done. Leaders, on the other hand, adopt
personal, active attitudes toward goals. They look for the opportunities and
rewards that lie around the corner, inspiring subordinates and firing up the
creative process with their own energy. Their relationships with employees and
coworkers are intense, and their working environment is often chaotic. In this
article, first published in 1977, the author argues that businesses need both
managers and leaders to survive and succeed. But in the larger U.S. organizations
of that time, a "managerial mystique" seemed to perpetuate the development of
managerial personalities--people who rely on, and strive to maintain, orderly work
patterns. The managerial power ethic favors collective leadership and seeks to
avoid risk. That same managerial mystique can stifle leaders' development--How can
an entrepreneurial spirit develop when it is submerged in a conservative
environment and denied personal attention? Mentor relationships are crucial to the
development of leadership personalities, but in large, bureaucratic organizations,
such relationships are not encouraged. Businesses must find ways to train good
managers and develop leaders at the same time.

or Business Overview
As a student in the University of Phoenix MBA, you will take a Quantitative
Reasoning for Business course. We designed this course to help you support your
development of analytical skills as a manager and apply the tools necessary to
make business decisions. Below are some questions a midlevel manager faces
regularly and the underlying skills needed to apply the tools those activities
require.

� What is our return on investment for this project?

� What price should we set to increase revenue?
� How much product must we sell to make a profit?
� Will offering our product in different models increase sales?
� What sales volume does our competition need to be profitable?
� What are our predicted sales next year, based on our past performance?
� How can we show the effect the price has on the quantity of our product
customers will buy on a PowerPoint� slide?
� Can we make more money by adding new equipment?
� If a contract includes a $2 million payment in 3 years, how much is that
worth today?
� How can we show the possibilities of various outcomes based on a single
decision?
� How far can we be from our expected sales volume before someone gets fired?
� When is a process out of control?
� How can we balance risk and return with our investment choices?
� If a sample of our product is bad, is the entire batch bad?
� How can we compare our performance against a baseline?

After completing the Quantitative Reasoning for Business course, students are able
to apply the underlying skills (shown below) needed to answer the questions above.

� Write mathematical expressions and equations for word problems.

� Apply the rules for order of operations in solving problems.
� Identify dependent and independent variables and their relationships.
� Differentiate the levels of measurement.
� Solve simultaneous equations algebraically.
� Use time series data to forecast.
� Construct histograms and bivariate plots using Excel.
� Determine the value of a slope by using the slope-intercept formula.
� Conduct a linear regression analysis.
� Compute exponential and reciprocal functions.
� Construct a frequency distribution.
� Compare and contrast measures of central tendency and measures of
dispersion.
� Construct a normal distribution.
� Explain basic probability concepts
� Explain the importance of the central limit theorem in sampling
� Convert data to indexes.

The QRB course prepares you to master these skills before you apply them in
economics, accounting, finance, operations, and research. We designed the QRB
course to connect these skills with the managerial competencies they support so
that the course prepares you for greater success! To show you how these skills
apply to business situations more clearly, here are some sample questions that you
may face as a manager.

Quantitative Reasoning for Business Quiz

1. If the formula for Return on Equity (ROE) is made of three factors: Net
Income (NI) divided by Sales (S), Sales (S) divided by Total Assets (TA), and
Total Assets (TA) divided by equity (E)] that are then multiplied by each other,
the mathematical formula is:

a. ROE=NI/S+S/TA+TA/E
b. ROE=NI/S*S/TA*TA/E
c. ROE=NI*S/S*TA/TA*E
d. ROE=NI-S*S-TA*TA-E

2. Given the accompanying demand data, use the formula below to compute price
elasticity of demand for the product price of $5 and product price of $4.

Product Price Quantity Demanded

$5
$4
$3
$2
$1 1
2
3
4
5

Use the below formula to determine the price elasticity of demand.

a. 5
b. 4
c. 3
d. 2

3. In considering break-even for a business, we look for the point where fixed
cost equals the number of units sold, multiplied by the price per unit, less the
variable cost per unit. What is the independent variable?

a. Fixed Cost
b. Price
c. Number of Units
d. Variable Cost

4. Refer to the variables below, which report information on homes sold in the
Denver, CO, area last year. Consider the following variables: selling price,
number of bedrooms, township, and distance from the center of the city. Determine
the level of measurement for each of the variables.

a. X1 = Selling price in $000

1) Ratio
2) Nominal
3) Ordinal
4) Interval

b. X2 = Size of home in sq feet

1) Ratio
2) Nominal
3) Ordinal
4) Interval

c. X3 = Pool (1 = yes, 0 = no)

1) Ratio
2) Nominal
3) Ordinal
4) Interval

d. X4 = Rating guide score of local schools

1) Ratio
2) Nominal
3) Ordinal
4) Interval

e. X5 = Distance from the center of the city

1) Ratio
2) Nominal
3) Ordinal
4) Interval

f. X6 = Township

1) Ratio
2) Nominal
3) Ordinal
4) Interval

g. X7 = Township number

1) Ratio
2) Nominal
3) Ordinal
4) Interval

5. If the formula for calculating net income (profit) using fixed cost (Fc),
variable cost (Vc), price (P), and units sold (U) is NI=U(P-Vc)-Fc. If the profits
of a company are $100 when sales are $1000 (100 units at $10 each), and $80 when
sales are $800 (80 units at $10 each), which formulas below are used to determine
Fixed Cost and Variable Cost?

a. 100=100(10-Vc)-Fc & 80=80(10-Vc)-Fc

b. 100=1000(10-Vc)-Fc & 80=800(10-Vc)-Fc
c. 1000=100(10-Vc)-Fc & 800=80*(10-Vc)-Fc
d. 1000=1000(10-Vc)-Fc & 800=800(10-Vc)-Fc

6. Sales for the past five years have been: $80.00, $120.00, $180.00, $270.00,
$405.00. Based on this rate of growth, next years sales should be:

a. $810.00
b. $540.00
c. $607.50
d. $600.00

7. The following table contains data on the relationship between saving and
income. These data are rearranged into a meaningful order and graphed on the
accompanying grid. What would you predict saving to be at the $12,500 level of
income?

Income per Year Saving per Year

$0 $-500
5,000 0
10,000 500
15,000 1,000
20,000 1,500

a. 650
b. 700
c. 750
d. 900

8. The slope intercept formula in mathematical form is y=mx+b. The slope in

this case is m, and determines how much increase there is in y from an increase in
x. In cost volume profit, the formula is profit = margin per unit times the number
of units less fixed costs. Here fixed costs are essentially a negative value for b
in the basic formula. When profits are $100 and fixed costs are $200 if the
company sells 50 units, what is the slope of the line that creates?

a. $5 per unit
b. $100
c. $200
d. $6 per unit

9. Linear regression is a mathematical tool that is used to represent the

relationship between independent and dependent variables algebraically. Businesses
should make extensive use of this tool in formulating strategy. True or False?

10. Suppose you just won a lottery for $1 million, payable in annual
installments of $200.000 with the first payment made in one year. Alternatively,
you could accept $850,000 today. Regardless of whether you take the $200,000
annually or the $850,000 today, you are confident you could earn 8% each year on
the payout for the next five years. If your objective is to have the most money at
the end of five years, what should you do?

a. Take the million dollars in five installments because one million dollars
compounded at 8% for five years is greater than $850,000 compounded at 8% over
five years.
b. Take the $850,000 today because it is greater than the present value of the
five $200,000 annual installments discounted at 8%.
c. Take the million dollars in five installments because invested the $200,000
you get each year at 8% will give you a greater amount at the end of five years
than investing $850,000 today at 8% for five years.
d. Take the $850,000 today because the present value of the five $200,000
annual installments discounted at 8% is greater than $850,000.

11. Molly�s Candle Shop has several retail stores in the coastal areas of North
and South Carolina. Many of Molly�s customers ask her to ship their purchases. The
following chart shows the number of packages shipped per day for the last 100
days.
What is the class interval? What is the class frequency for the 10 to 15 class?

a. 28 and 5
b. 15 and 25
c. 7 and 28
d. 5 and 25
e. 5 and 28

12. Match the below math concepts, with the appropriate use:

1) Mode
2) Median
3) Mean

a) Calculating the average wage cost. 3

b) Determining the most frequent number of sales/week by sales personnel 1
c) Identifying the minimum service score received on half of all responses 2

13. Last month, the following seven homes sold in your town. Each selling price
is in thousands of dollars: 180, 250, 195, 140, 375, 3500, 425. What is the median
and mean selling price?

a. $250 and $724

b. $245 and $719
c. $255 and $729
d. $240 and $714

14. Wear Ever Tire Company randomly selected 1000 customers who bought new sets
of tires from its dealers across the country and had them record when the first
tire needed to be replaced due to wear. From these data, they calculated that the
mean mileage was 32,000 miles and the standard deviation was 4,000 miles. Recently
a customer who bought a set of tires needed to replace a tire due to wear at
18,000 miles. Which of the following statements is true?

a. The customer could expect to replace a tire at 18,000 miles.

b. This is very unlikely; this should happen in fewer than 3% of the cases.
c. There may be something wrong with the tire production with this batch of
tires.
d. Both b and c should be considered true by the management of Wear Ever Tire
Company.

15. In business, we often reduce risk by creating a portfolio which includes a

mix of investments with high-, medium-, and low-risk. Each of these categories has
an estimate of what return we expect. The creation of these estimates often relies
on probability concepts. How should probability estimates be created to reduce
risk the most?

a. Gathering and evaluating data using statistics.

b. The best guess of management.
c. Last year�s performance.
d. Random Number.

16. CRA CDs, Inc. wants the mean lengths of the cuts on a CD to be 135 seconds
(2 minutes and 15 seconds). This allows the disk jockeys to have plenty of time
for commercials within each 10-minute segment. Assume the distribution of the
length of the cuts follows the normal distribution with a standard deviation of 8
seconds. Suppose we select a sample of 16 cuts from various CDs sold by CRA CDs,
Inc. What can we say about the shape of the distribution of the sample mean?

a. 67% of the sample means will be between 127 seconds and 143 seconds.
b. 95% of the sample means will be between 127 seconds and 143 seconds.
c. 99% of the sample means will be between 127 seconds and 143 seconds.
d. 100% of the sample means will be between 127 seconds and 143 seconds.

17. A market basket of goods and services cost $1500 to purchase in the year
2000. The same market basket of goods and services cost the following in the next
several years:

2001 $1560.00 2002 $1606.80

2003 $1687.14 2004 $1737.75

From these data, it is possible to create a consumer price index with the purchase
price of the goods and services in the year 2000 set equal to 100. If so, rounded
to the nearest integer, what is the value of the consumer price index for the year
2004?

a. 174
b. 116
c. 1737
d. 100

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