Operations Managers Often Use Work Sampling to Estimate How Much

question 119

Multiple Choice

Operations managers often use work sampling to estimate how much time workers spend on each operation. Work sampling-which involves observing workers at random points in time-was
Applied to the staff of the catalog sales department of a clothing manufacturer. The department
Applied regression to the following data collected for 40 consecutive working days:

Consider the following 2 models:

Model 1: $E ( \mathrm { y } ) = \beta _ { 0 } + \beta _ { 1 } x _ { 1 } + \beta _ { 2 } \left( \mathrm { x } _ { 1 } \right) ^ { 2 } + \beta _ { 3 } x _ { 2 } + \beta _ { 4 } x _ { 1 } x _ { 2 } + \beta _ { 5 } \left( x _ { 1 } \right) ^ { 2 } x _ { 2 }$
Model 2: $E ( \mathrm { y } ) = \beta _ { 0 } + \beta _ { 1 } x _ { 1 } + \beta _ { 3 } x _ { 2 }$
What strategy should you employ to decide which of the two models, the higher-order model or the simple linear model, is better?

• A) Compare the two models with a nested model \(F\)-test, i.e., test the null hypothesis, \(H _ { 0 } : \beta _ { 2 } =\) \(\beta _ { 4 } = \beta _ { 5 } = 0\).
• B) Always choose the more parsimonious of the two models, i.e., the model with the fewest number of \(\beta\)-coefficients.
• C) Compare \(R ^ { 2 }\) values; the model with the larger \(R ^ { 2 }\) will always be the better model.
• D) Compare the two models with a t-test, i.e., test the null hypothesis, \(H _ { 0 } : \beta _ { 1 } = 0\).

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Definitions:

Promissory Note

A financial instrument containing a written promise by one party to pay another a definite sum of money either on demand or at a specified future date.

Negotiable

Capable of being transferred or assigned from one party to another, often used in the context of financial instruments.

Nonexistent Person

A fictional or imagined individual who does not exist in reality.

Negotiable

Capable of being transferred or converted into goods, services, or money under terms agreeable to all parties involved.