Question 1

In decision making under ________, there are several possible outcomes for each alternative, and the decision maker does not know the probabilities of the various outcomes.

Accepted Answer

A) risk 
B) utility 
C) certainty 
D) uncertainty 
A) risk 
B) utility 
C) certainty 
D) uncertainty

Question 2

Utility values typically range from

Accepted Answer

A) -1 to 1. 
B) 1 to 10. 
C) 0 to 1. 
D) 1 to 100. 
A) -1 to 1. 
B) 1 to 10. 
C) 0 to 1. 
D) 1 to 100.

Question 3

A decision sciences professor defines the P(A)= the likelihood one of his students will be bitten by a monkey on his trip to India and P(B)= an Indian monkey carries rabies.Which of these expressions represents the likelihood that given a monkey doesn't have rabies, it will bite his student?

Accepted Answer

Question 4

The equally likely criterion is also called the ________ criterion.

Accepted Answer

A) Hurwicz 
B) uncertainty 
C) Laplace 
D) LaFlore 
A) Hurwicz 
B) uncertainty 
C) Laplace 
D) LaFlore

Question 5

Briefly describe decision making under risk.

Accepted Answer

There are several possible out

Question 6

A market research survey is available for $5,000.Using a decision tree analysis, it is found that the expected monetary value with no survey is $49,000.If the expected value of sample information is -$4,000, what is the expected monetary value with the survey?

Accepted Answer

EV with SI

Question 7

The Hurwicz criterion coefficient of realism measures the decision maker's degree of

Accepted Answer

A) utility. 
B) pessimism. 
C) certainty. 
D) optimism. 
A) utility. 
B) pessimism. 
C) certainty. 
D) optimism.

Question 8

Suppose that the payoff from an investment depends upon market conditions.A great market has a payoff of $200,000, a normal market has a payoff of $100,000, and a poor market has a payoff of $20,000.Using an α-value of 0.3, what is the criterion of realism value?

Accepted Answer

0.3($200,0

Question 9

A risk avoider is a person for whom the utility of an outcome

Accepted Answer

A) decreases as the monetary value increases. 
B) stays the same as monetary value increases. 
C) increases at an increasing rate as the monetary value increases. 
D) increases at a decreasing rate as monetary value increases. 
A) decreases as the monetary value increases. 
B) stays the same as monetary value increases. 
C) increases at an increasing rate as the monetary value increases. 
D) increases at a decreasing rate as monetary value increases.

Question 10

The ABC Co.is considering a new consumer product.They believe that the XYZ Co.may come out with a competing product.If ABC adds an assembly line for the product and XYZ does not follow with a competitive product, their expected profit is $40,000; if they add an assembly line and XYZ does follow, they still expect a $10,000 profit.If ABC adds a new plant addition and XYZ does not produce a competitive product, they expect a profit of $600,000; if XYZ does compete for this market, ABC expects a loss of $100,000.For what value of probability that XYZ will offer a competing product will ABC be indifferent between the alternatives?

Accepted Answer

Let X = probability XYZ offers a competi

Question 11

Before a marketing research study was done, John Colorado believed there was a 50/50 chance that his music store would be a success.The research team determined that there is a 0.9 probability that the marketing research will be favorable given a successful music store.There is also a 0.8 probability that the marketing research will be unfavorable given an unsuccessful music store.
(a)If the marketing research is favorable, what is the revised probability of a successful music store?
(b)If the marketing research is unfavorable, what is the revised probability of a successful music store?

Accepted Answer

The answer of Before a marketing research study was done,...

Question 12

Which of the following is not considered a criterion for decision making under uncertainty?

Accepted Answer

A) optimistic 
B) pessimistic 
C) equally likely 
D) random selection 
A) optimistic 
B) pessimistic 
C) equally likely 
D) random selection

Question 13

A manager is deciding whether or not to build a small facility.Demand is uncertain and can be either at a high or low level.If the manager chooses a small facility and demand is low, the payoff is $300.If the manager chooses a small facility and demand is high, the payoff is $100.On the other hand, if the manager chooses a large facility and demand is low, the payoff is -$200, but if demand is high, the payoff is $800.
(a)What would be the best decision based on the maximax criterion?
(b)What would be the best decision based on the maximin criterion?
(c)What would be the best decision based on the minimax regret?

Accepted Answer

large facility - highest overa

Question 14

Before a market survey is done, there is a 50/50 chance that a new soccer supply store would be a success.The people doing the survey have determined that there is a 0.9 probability that the survey will be favorable given a successful store.There is also a 0.75 probability that the survey will be unfavorable given an unsuccessful store.What is the probability that the survey will be unfavorable?

Accepted Answer

(1 − .9)(.

Question 15

In Bayesian analysis, conditional probabilities are also known as which of the following?

Accepted Answer

A) anterior probabilities 
B) posterior probabilities 
C) prior probabilities 
D) marginal probabilities 
A) anterior probabilities 
B) posterior probabilities 
C) prior probabilities 
D) marginal probabilities

Question 16

In constructing a utility curve

Accepted Answer

A) a comparison is made of the different amounts of money at different times. 
B) the certainty of a certain amount is compared with the willingness to gamble that amount on a larger amount. 
C) one takes the risk out of gambling. 
D) inflation plays a critical part in the evaluation. 
A) a comparison is made of the different amounts of money at different times. 
B) the certainty of a certain amount is compared with the willingness to gamble that amount on a larger amount. 
C) one takes the risk out of gambling. 
D) inflation plays a critical part in the evaluation.

Question 17

The following is a payoff table giving profits for various situations.   If a person were to use the expected monetary value criterion, what decision would be made?

Accepted Answer

A) Alternative 1 
B) Alternative 2 
C) Alternative 3 
D) Alternative 4 
A) Alternative 1 
B) Alternative 2 
C) Alternative 3 
D) Alternative 4

Question 18

A pessimistic decision-making criterion is

Accepted Answer

A) maximax. 
B) equally likely. 
C) maximin. 
D) decision making under certainty. 
A) maximax. 
B) equally likely. 
C) maximin. 
D) decision making under certainty.

Question 19

Which of the following is the fourth step of the "Six Steps in Decision Making"?

Accepted Answer

A) Select one of the mathematical decision theory models. 
B) List the possible alternatives. 
C) Apply the model and make your decision. 
D) List the payoff or profit of each combination of alternatives and outcomes. 
A) Select one of the mathematical decision theory models. 
B) List the possible alternatives. 
C) Apply the model and make your decision. 
D) List the payoff or profit of each combination of alternatives and outcomes.

Question 20

The following is a payoff table giving costs for various situations.   What decision would a pessimist make?

Accepted Answer

A) Alternative 1 
B) Alternative 2 
C) Alternative 3 
D) Alternative 4 
A) Alternative 1 
B) Alternative 2 
C) Alternative 3 
D) Alternative 4

In decision making under ________, there are several possible outcomes for each alternative, and the decision maker does not know the probabilities of the various outcomes.

Utility values typically range from

A decision sciences professor defines the P(A)= the likelihood one of his students will be bitten by a monkey on his trip to India and P(B)= an Indian monkey carries rabies.Which of these expressions represents the likelihood that given a monkey doesn't have rabies, it will bite his student?

The equally likely criterion is also called the ________ criterion.

Briefly describe decision making under risk.

A market research survey is available for $5,000.Using a decision tree analysis, it is found that the expected monetary value with no survey is $49,000.If the expected value of sample information is -$4,000, what is the expected monetary value with the survey?

The Hurwicz criterion coefficient of realism measures the decision maker's degree of

Suppose that the payoff from an investment depends upon market conditions.A great market has a payoff of $200,000, a normal market has a payoff of $100,000, and a poor market has a payoff of $20,000.Using an α-value of 0.3, what is the criterion of realism value?

A risk avoider is a person for whom the utility of an outcome

Which of the following is not considered a criterion for decision making under uncertainty?

In Bayesian analysis, conditional probabilities are also known as which of the following?

In constructing a utility curve

The following is a payoff table giving profits for various situations. If a person were to use the expected monetary value criterion, what decision would be made?

A pessimistic decision-making criterion is

Which of the following is the fourth step of the "Six Steps in Decision Making"?

The following is a payoff table giving costs for various situations. What decision would a pessimist make?

Introduction to Quantitative Analysis

Probability Concepts and Applications

Regression Models

Forecasting

Inventory Control Models

Linear Programming Models: Graphical and Computer Methods

Linear Programming Applications

Transportation, Assignment, and Network Models

Integer Programming, Goal Programming, and Nonlinear Programming

Project Management

Waiting Lines and Queuing Theory Models

Simulation Modeling

Markov Analysis

Statistical Quality Control

Analytic Hierarchy Process

Dynamic Programming

Decision Theory and the Normal Distribution

Game Theory

Mathematical Tools: Determinants and Matrices

Calculus-Based Optimization

Linear Programming: The Simplex Method

Transportation, Assignment, and Network Algorithms

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Exam 3: Decision Analysis

In decision making under ________, there are several possible outcomes for each alternative, and the decision maker does not know the probabilities of the various outcomes.

Utility values typically range from

A decision sciences professor defines the P(A)= the likelihood one of his students will be bitten by a monkey on his trip to India and P(B)= an Indian monkey carries rabies.Which of these expressions represents the likelihood that given a monkey doesn't have rabies, it will bite his student?

The equally likely criterion is also called the ________ criterion.

Briefly describe decision making under risk.

A market research survey is available for $5,000.Using a decision tree analysis, it is found that the expected monetary value with no survey is $49,000.If the expected value of sample information is -$4,000, what is the expected monetary value with the survey?

The Hurwicz criterion coefficient of realism measures the decision maker's degree of

Suppose that the payoff from an investment depends upon market conditions.A great market has a payoff of $200,000, a normal market has a payoff of $100,000, and a poor market has a payoff of $20,000.Using an α-value of 0.3, what is the criterion of realism value?

A risk avoider is a person for whom the utility of an outcome

Which of the following is not considered a criterion for decision making under uncertainty?

In Bayesian analysis, conditional probabilities are also known as which of the following?

In constructing a utility curve

The following is a payoff table giving profits for various situations. If a person were to use the expected monetary value criterion, what decision would be made?

A pessimistic decision-making criterion is

Which of the following is the fourth step of the "Six Steps in Decision Making"?

The following is a payoff table giving costs for various situations. What decision would a pessimist make?

Introduction to Quantitative Analysis

Probability Concepts and Applications

Regression Models

Forecasting

Inventory Control Models

Linear Programming Models: Graphical and Computer Methods

Linear Programming Applications

Transportation, Assignment, and Network Models

Integer Programming, Goal Programming, and Nonlinear Programming

Project Management

Waiting Lines and Queuing Theory Models

Simulation Modeling

Markov Analysis

Statistical Quality Control

Analytic Hierarchy Process

Dynamic Programming

Decision Theory and the Normal Distribution

Game Theory

Mathematical Tools: Determinants and Matrices

Calculus-Based Optimization

Linear Programming: The Simplex Method

Transportation, Assignment, and Network Algorithms

Filters