Question 1

A(n)________ is an occurrence or situation over which the decision maker has little or no control.

Accepted Answer

state of nature

Question 2

A retailer is deciding how many units of a certain product to stock.The historical probability distribution of sales for this product is 0 units,0.2;1 unit,0.3;2 units,0.4,and 3 units,0.1.The product costs $8 per unit and sells for $25 per unit.What is the largest conditional value (profit)in the entire payoff table for this scenario?

Accepted Answer

A) $-24 profit 
B) $-8 profit 
C) $17 profit 
D) $51 profit 
E) $75 profit 
A) $-24 profit 
B) $-8 profit 
C) $17 profit 
D) $51 profit 
E) $75 profit D

Question 3

The square symbol used in drawing a decision trees represents a(n)________ node.

Accepted Answer

decision

Question 4

What is a tabular presentation that shows the outcome for each decision alternative under the various possible states of nature called?

Accepted Answer

A) isoquant table 
B) payback period matrix 
C) payoff table 
D) feasible region 
E) decision tree 
A) isoquant table 
B) payback period matrix 
C) payoff table 
D) feasible region 
E) decision tree

Question 5

If a decision maker can assign probabilities of occurrences to the states of nature,then the decision-making environment is Decision Making under Uncertainty.

Accepted Answer

A) True 
 B)False

Question 6

Doing nothing would yield how much profit if favorable market conditions prevail according to the following profit decision table?

Accepted Answer

A) $5,000 
B) $20,000 
C) -$10,000 
D) $0 
E) $10,000 
A) $5,000 
B) $20,000 
C) -$10,000 
D) $0 
E) $10,000

Question 7

The following decision tree has how many state of nature nodes?

Accepted Answer

A) 0 
B) 1 
C) 2 
D) 3 
E) 4 
A) 0 
B) 1 
C) 2 
D) 3 
E) 4

Question 8

What is the difference between the expected payoff under perfect information and the maximum expected payoff under risk?

Accepted Answer

A) expected monetary value 
B) economic order quantity 
C) expected value of perfect information 
D) PERT 
E) expected monetary payoff 
A) expected monetary value 
B) economic order quantity 
C) expected value of perfect information 
D) PERT 
E) expected monetary payoff

Question 9

Daily sales of bread by Salvador Monella's Baking Company follow the historical pattern shown in the table below.It costs the bakery 50 cents to produce a loaf of bread,which sells for 95 cents.Any bread unsold at the end of the day is sold to the parish jail for 25 cents per loaf.Construct the decision table of conditional payoffs.How many loaves should Sal bake each day in order to maximize contribution?

Accepted Answer

The Excel OM decision table an

Question 10

In the context of decision making,define an alternative.

Accepted Answer

An alternative is a

Question 11

What is the EMV for Option 1 in the following decision table?

Accepted Answer

A) 10,000 
B) 18,000 
C) 20,000 
D) 22,000 
E) 30,000 
A) 10,000 
B) 18,000 
C) 20,000 
D) 22,000 
E) 30,000

Question 12

Bratt's Bed and Breakfast,in a small historic New England town,must decide how to subdivide (remodel)the large old home that will become an inn.There are three alternatives: Option A would modernize all baths and combine rooms,leaving the inn with four suites,each suitable for two to four adults.Option B would modernize only the second floor;the results would be six suites,four for two to four adults,and two for two adults only.Option C (the status quo option)leaves all walls intact.In this case,there are eight rooms available,but only two are suitable for four adults,and four rooms will not have private baths.Below are the details of profit and demand patterns that will accompany each option.Which option has the highest expected value?

Accepted Answer

Branch 2,which represents Opti

Question 13

The expected value of perfect information is the same as the expected value with perfect information.

Accepted Answer

A) True 
 B)False

Question 14

Describe the meaning of EVPI.

Accepted Answer

EVPI is defined as the expected value of

Question 15

The last step of the decision-making process is to:

Accepted Answer

A) develop a model. 
B) evaluate each alternative. 
C) select the best alternative. 
D) implement the decision. 
E) check the decision with senior management. 
A) develop a model. 
B) evaluate each alternative. 
C) select the best alternative. 
D) implement the decision. 
E) check the decision with senior management.

Question 16

Analytic decision making is based on logic and considers all available data and possible alternatives.

Accepted Answer

A) True 
 B)False

Question 17

A plant manager wants to know how much he should be willing to pay for perfect market research.Currently there are two states of nature facing his decision to expand or do nothing.Under favorable market conditions the manager would make $100,000 for the large plant and $5,000 for the small plant.Under unfavorable market conditions the large plant would lose $50,000 and the small plant would make $0.If the two states of nature are equally likely,how much should he pay for perfect information?

Accepted Answer

A) $0 
B) $25,000 
C) $50,000 
D) $100,000 
E) $145,000 
A) $0 
B) $25,000 
C) $50,000 
D) $100,000 
E) $145,000

Question 18

________ is the criterion for decision making under uncertainty that assigns equal probability to each state of nature.

Accepted Answer

The answer of ________ is the criterion for decision making...

Question 19

A toy manufacturer makes stuffed kittens and puppies that have relatively lifelike motions.There are three different mechanisms which can be installed in these "pets." These toys will sell for the same price regardless of the mechanism installed,but each mechanism has its own variable cost and setup cost.Profit,therefore,is dependent upon the choice of mechanism and upon the level of demand.The manufacturer has in hand a forecast of demand that suggests a 0.2 probability of light demand,a 0.45 probability of moderate demand,and a probability of 0.35 of heavy demand.Payoffs for each mechanism-demand combination appear in the table below.
   Construct the appropriate decision tree to analyze this problem.Use standard symbols for the tree.Analyze the tree to select the optimal decision for the manufacturer.

Accepted Answer

@#IMG-DLM& The best

Question 20

Suppose a manufacturing plant is considering three options for expansion.The first one is to expand into a new plant (large),the second to add on third-shift to the daily schedule (medium),and the third to do nothing (small).There are three possibilities for demand.These are high,medium,and low with each having an equal likelihood of occurring.Suppose that the profits for the expansion plans are as follows (respective to high,medium,low demand).The large expansion profits are $100000,$10000,-$10000,the medium expansion choice $40000,$40000,$5000 and the small expansion choice $15000,$15000,$15000.Calculate the EMV of each choice.Which of the expansion plans should the manager choose?

Accepted Answer

EMV large expansion is .33(100000)+ .33(

Exam 22: Decision-Making Tools

A(n)________ is an occurrence or situation over which the decision maker has little or no control.

The square symbol used in drawing a decision trees represents a(n)________ node.

What is a tabular presentation that shows the outcome for each decision alternative under the various possible states of nature called?

If a decision maker can assign probabilities of occurrences to the states of nature,then the decision-making environment is Decision Making under Uncertainty.

Doing nothing would yield how much profit if favorable market conditions prevail according to the following profit decision table?

The following decision tree has how many state of nature nodes?

What is the difference between the expected payoff under perfect information and the maximum expected payoff under risk?

In the context of decision making,define an alternative.

What is the EMV for Option 1 in the following decision table?

The expected value of perfect information is the same as the expected value with perfect information.

Describe the meaning of EVPI.

The last step of the decision-making process is to:

Analytic decision making is based on logic and considers all available data and possible alternatives.

________ is the criterion for decision making under uncertainty that assigns equal probability to each state of nature.

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Process Strategy

Location Strategies

Layout Strategies

Human Resources,job Design,and Work Measurement

Supply Chain Management

Inventory Management

Aggregate Planning and Sop

Material Requirements Planning Mrpand Erp

Short-Term Scheduling

Jit,tps,and Lean Operations

Maintenance and Reliability

Sustainability in the Supply Chain

Statistical Process Control

Capacity and Constraint Management

Supply Chain Management Analytics

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

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