QUANTITATIVE TECHNIQUES ISBM DMS EXAM QUESTION AND ANSWER PROVIDED

 QUANTITATIVE TECHNIQUES ISBM DMS EXAM QUESTION AND ANSWER PROVIDED

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Quantitative Techniques

Case Studies

Case

(20Marks)

Since 9/11•terrorism has cased threat attacks which have drawn the attention of political and media world. The US hto launch. a 'war on terror' and applied a range of counteract terrorism safety measures towards aviation, pubtransportation, ports, borders, public Hermie places, etc. While these steps may show cheap course of act!on government and security services, it is quite expensive. According to the calculations done by Mueller and Stewa(2011), the expenditure of US homeland and security has gone over 1.1 trillion dollars, which includes federal, state adomestic government, and private sector, and also the cost of opportunity. The Iraq an Afghanistan wars have added 1trillion dollars to this expenditure. The expenditure of federal, state and local US government on home ground securhas been estimated to 75 billion dollars more than the last levels of 2001. It is seen that US is not the only country to in these high level of expenses, even though no other country can match its per capita or GDP expenditure. Fexample, increased expenditure• on homeland security in UK, Canada and Australia is nearly one half to one quarter US expenditure per capita or GDP. Nevertheless, in 2009, the government spent nearly 141.6 billion dollars each yeon homeland security. This figure is expected to reach about 300 billion dollars by 2016.

After 9/11, the main objectihas been to prevent or alleviate any harm or casualty as a result of terrorism. The main issue is, if this expenditure counteracting terrorism been invest.ed in a way that has increased the cost of security of the public efficiently or noHence, the commission report of 9/11, among other issues, was called upon

• the US government to execute safemeasures which show evaluation of risks and effectiveness of expenditure. Nevertheless, while the US needs tevaluate expenditure benefits for government regulations, such evaluation seems co have not been done for homelasecurity in general, or for the DHS (department of homeland security). One of the causes could be that DHS is not abto take up such evaluation.

The NRC (national research council) committee of the National Academics of ScienceEngineering and Medicine, made a request through S Congress to evaluate the functions of DHS, which was working the project for almost 2 years, came up with some surprising result-. Besides e'•aluation of natural disasters, tcommittee 'did not find any DHS risk analysis capabilities and methods that are yet adequate for supporting DHdecision making.' Due to which, very less confidence could be had in most of the risk evaluation done by DHS. Tcommittee said that "it is not yet clear that DHS is on a

I ! trajectory for development of methods and capability thatsufficient

to ensure reliable risk analyses".

usually the government and their rigid agencies shoo a neutral behavtowards their decision making. Stewart says that "the standard criterion for deciding whether a government; programmcan be justified on economic principles is net present value - the discounted monetized value of expected net benef(i.e., benefits minus costs)" and that "expected values (an unbiased estimate) is the appropriate estimate for use" (UM1992).

Answer the following question.

Q1.

What are the reasons that show that DHS is incapable in evaluating the risks of national security?(Hint: while the US needs to evaluate expenditure benefits for government regulations, such evaluation

7/23/22, 4:06 PM Exam Paper

https://www.isbm.org.in/examsoft/exampaper_final.php?id=71253 2/3

seem to have not been done for homeland security in general, DHS is not able to take up suchevaluation.)

Q2.

The government spent nearly 141.6 billion dollars each year on (Hint: homeland security)

CASE STUDY

(20Marks)

The price P per unit at which a company can sell all that it produces is given by the

function P(x) = 300 — 4x. The cofunction is c(x) = 500 + 28x where x is the number

of units produced. Find x so that the profit is maximum.

Answer the following question.

Q1.

Find the value of x.

Q2.

In using regression analysis for making predictions what are the assumptions involved.

Q3.

What is a simple linear regression model?

Q4.

What is a scatter diagram method?

CASE STUDY

(20Marks)

Mr Sehwag invests Rs 2000 every year with a company, which pays interest at 10% p.a.

He allows his deposit accumulate at C.I. Find the amount to the credit of the person

at the end of 5th year.

Answer the following question.

Q1.

What is the Time Value of Money concept.

Q2.

What do you mean by present value of money?

Q3.

What is the Future Value of money.

Q4.

What the amount to be credited at the end of 5th year.

case study

(20Marks)

Time series analysis has two important aims: 1) recognizing the quality of the phenomenon shown by the series studies, and 2) Both the aims need the plan of the viewed time series data is recognized and somewhat officiaexplained:

A time series is said to be a 'collection of observations made in sequence with time'. For example: recordilevel of daily rainfall, periodical total domestic product of US, and monthly strength of the. workers in Marine Corps forspecific rank and MOS. The evaluation of time series gives instruments for picking a symbolic model and deliveriforecasts. There are two sorts of times series data:

• Continuous: in this the data consists of study at every moment, fexample, seismic movement recorded on a seismogram.

• Discrete: the data contains recordings taken at differeperiods

,like, statistics of each month crime. Until the data is absolutely haphazard, studies in time series are usuarelated to each and the following studies could be partly ascertain by the last values. For instance, the reasopertaining to the meteorology which have an effect on the temperature for any given day tend to have some affect on tnext day's climate. Hence, the observations of the past temperature are helpful for predicting temperatures for tfollowing days. •

A time series can be deterministic if there are no haphazard or feasible features but goes in a set aforeseeable manner. The data gathered during the classical physics experiment like showing Newton's Law of Motion,one example of a deterministic time series. The stochastic type of series is more appropriate to the econometfunction. Stochastic variables contain undefined or arbitrary viewpoint. Though the worth of each study cannot precisely foreseen, calculating the various observations could follow the expected method. These methods can explained through the statistical models. According to these models, studies differ erratically on the underlying meavalue

whtch is the role of time. Time series data can be put in the following categories: one or more performance factotrend, seasonality, cyclical function and random sound.

Various kinds of time series predicting models give forecasthrough extrapolating the previous performance of the values of a specified

\'l!riable of interest. Consecutive study econometric times series are generally not free and forecast can be made on the basis of last observations. Althouprecise predictions can be made with deterministic time series, predictions of stochastic time series are restricted 'conditional statements regarding the future on the basis of particular hypothesis.' Armstrong (2001) says, "The basAssumption is that the variable ui!! continue in the future as it has behaved in the past. " Particularly, the time seripredictions are suitable for stochastic type of data in which the fundamental root cause of variation like, trend, cyclicperformance, seasonality, and uneven variations, do not change radically m time. Therefore, modeling is considered be more suitable temporarily instead of permanent predictions.

Answer the following question.

Q1.

Write briefly on time-series analysis. (Hint: recognizing the quality of the phenomenon shown by theseries of studies, and, both the aims need the plan of the viewed time series data is recognized andsomewhat officially explained)