You are evaluating investment alternatives for a ski resort.There are four alternative investments and their payoffs (in $10,000s)are shown in the following table, depending on the snow conditions for the next season. $\begin{array}{r} \text { Snow Conditions }\\ \begin{array}{ccc} \text { Investment } & \text { Good } & \text { Bad } \\ d_{1} & 3 & 1 \\ d_{2} & 8 & 0 \\ d_{3} & 12 & -4 \\ d_{4} & 18 & -12 \end{array}\end{array}$ If you use the EMV criterion, what is the minimum probability that the conditions will be good for you to decide investment d4?

A) 0.4 B) 0.43 C) 0.5 D) 0.57 E) 0.59 A) 0.4 B) 0.43 C) 0.5 D) 0.57 E) 0.59

Consider the following decision table with rewards in $ millions. $\begin{array}{r} \text { State of Nature }\\ \begin{array}{|c|c|c|c|} \hline \text { Decision Alternatives } & S_{1} & S_{2} & S_{3} \\ \hline d_{1} & -1 & 2 & 8 \\ \hline d_{2} & -3 & 7 & 5 \\ \hline d_{3} & -0.5 & 0.75 & 1 \\ \hline d_{4} & 0 & 0 & 0 \\ \hline d_{5} & -1 & -1 & -1\\ \hline \end{array}\end{array}$ Using the Hurwicz criterion with alpha = 0.1, the appropriate choice would be ________.

A) d1 B) d2 C) d3 D) d4 E) d5 A) d1 B) d2 C) d3 D) d4 E) d5

Consider the following decision table with rewards in $ millions. $\begin{array}{r} \text { State of Nature }\\ \begin{array}{|c|c|c|c|} \hline \text { Decision Alternatives } & S_{1} & S_{2} & S_{3} \\ \hline d_{1} & -1 & 2 & 8 \\ \hline d_{2} & -3 & 7 & 5 \\ \hline d_{3} & -0.5 & 0.75 & 1 \\ \hline d_{4} & 0 & 0 & 0 \\ \hline d_{5} & -1 & -1 & -1\\ \hline \end{array}\end{array}$ Using the Hurwicz criterion with alpha = 0.2, the appropriate choice would be ________.

A) d1 B) d2 C) d3 D) d4 E) d5 A) d1 B) d2 C) d3 D) d4 E) d5

Consider the following decision table with rewards in $ millions. $\begin{array}{r} \text { State of Nature }\\ (\begin{array}{|c|c|c|c|} \hline\text { Decision Alternatives } & S_{1} & S_{2} & S_{3} \\ \hline d_{1} & -1 & 2 & 8 \\ \hline d_{2} & -3 & y & 5 \\ \hline d_{3} & -0.5 & 0.75 & 1 \\ \hline d_{4} & 0 & 0 & 0 \\ \hline d_{5} & x & -1 & -1\\ \hline \end{array}\end{array}$ If you are using the maximin criterion and decide d4, then x is ______.

A) at most -1 B) less than -1 C) any value D) cannot be determined without knowing the value of y E) less than -3 A) at most -1 B) less than -1 C) any value D) cannot be determined without knowing the value of y E) less than -3

Exam 19: Decision Analysis

Ray Crofford is evaluating investment alternatives to invest $100,000 which he inherited from his grandfather.His investment advisor has identified four alternatives and constructed the following payoff table which shows expected profits (in $10,000's)for various market conditions. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Market Condition }$ Investment Bull Neutral Bear T-Bills 3 3 3 Stocks 21 11 -30 Bonds 15 4 -3 Mixture 13 6 -10 For the 'Stocks' and 'Bonds' choices, the indifference value of Hurwicz's alpha is ____.

(Multiple Choice)

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Question 81

You are evaluating investment alternatives for a ski resort.There are four alternative investments and their payoffs (in $10,000s)are shown in the following table, depending on the snow conditions for the next season. Snow Conditions Investment Good Bad 3 1 8 0 12 -4 18 -12 If you use the EMV criterion, what is the minimum probability that the conditions will be good for you to decide investment d₄?

(Multiple Choice)

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Question 82

A particular electronic component is produced at two plants for an electronics manufacturer.Plant A produces 70% of the components used and the remainder are produced by plant B.The probability that a component is defective is 0.02 if it is produced at plant A and 0.01 if it is produced at plant B.The probability that the component is defective is ______

(Multiple Choice)

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Question 83

Melissa Rossi, Product Manager at National Consumers, Inc.(NCI), is evaluating alternatives for introducing a new package for toothpaste.She has identified four alternative markets, and has constructed the following table which shows NCI's rewards (in $1,000,000's)for various levels of acceptance by the markets and their probabilities. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Market Acceptance }$ Market Low (.3) Medium (.4) High (.3) Northeast Only -0.7 0 1 Southeast Only -0.2 0.2 0.8 National -1.5 -0.2 2 None (don't introduce the new package) 0 0 0 The EMV of introducing the new package in the "Northeast Only" market is ________.

(Multiple Choice)

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Question 84

Consider the following decision table with rewards in $ millions. State of Nature Decision Alternatives -1 2 8 -3 7 5 -0.5 0.75 1 0 0 0 -1 -1 -1 Using the Hurwicz criterion with alpha = 0.1, the appropriate choice would be ________.

(Multiple Choice)

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Question 85

In a decision-making under uncertainty scenario, the best decision alternative based on the strategy of minmax regret will always have zero regret.

(True/False)

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Question 86

In decision-making under uncertainty, an optimistic approach is the __________.

(Multiple Choice)

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Question 87

In a decision analysis problem, variables (such as general macroeconomic conditions)which are not under the decision maker's control are called prior probabilities.

(True/False)

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Question 88

The expected monetary value without information is $2,500, and the expected monetary payoff with perfect information is $5,000.The expected value of perfect information is ____________.

(Multiple Choice)

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Question 89

In decision-making under uncertainty, the approach that considers only the best and the worst payoffs for each decision alternative is the __________.

(Multiple Choice)

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Question 90

When deciding whether to purchase sample information, the revised probabilities due to that information can be incorporated through the application of Bayes' rule.

(True/False)

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Question 91

In a decision-making under risk scenario, the expected monetary value of a decision alternative is the arithmetic average of the payoffs to the decision alternative in each state of the nature.

(True/False)

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Question 92

A particular electronic component is produced at two plants for an electronics manufacturer.Plant A produces 70% of the components used and the remainder are produced by plant B.The probability that a component is defective is 0.02 if it is produced at plant A and 0.01 if it is produced at plant B.If the component is not defective the revised probability it is produced at plant A, P (A|ND), is closest to ________

(Multiple Choice)

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Question 93

Consider the following decision table with rewards in $ millions. State of Nature Decision Alternatives -1 2 8 -3 7 5 -0.5 0.75 1 0 0 0 -1 -1 -1 Using the Hurwicz criterion with alpha = 0.2, the appropriate choice would be ________.

(Multiple Choice)

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Question 94

Consider the following decision table with rewards in $ millions. State of Nature ( Decision Alternatives -1 2 8 -3 y 5 -0.5 0.75 1 0 0 0 x -1 -1 If you are using the maximin criterion and decide d₄, then x is ______.

(Multiple Choice)

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Question 95

Dianna Ivy is evaluating a plan to expand the production facilities of International Compressors Company which manufactures natural gas compressors.Dianna feels that the price of coal is a significant factor in her decision.She is able to estimate how much the company would make under various prices of coal.If Dianna is making her decision under certainty, then she knows the ___________.

(Multiple Choice)

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Question 96

Ray Crofford is evaluating investment alternatives to invest $100,000 which he inherited from his grandfather.His investment advisor has identified four alternatives and constructed the following payoff table which shows expected profits (in $10,000's)for various market conditions. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Market Condition }$ Investment Bull Neutral Bear T-Bills 3 3 3 Stocks 21 11 -30 Bonds 15 4 -3 Mixture 13 6 -10 If Ray uses the Hurwicz criterion with alpha = 0.1, the appropriate choice is ______.

(Multiple Choice)

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Question 97

Ray Crofford is evaluating investment alternatives to invest $100,000 which he inherited from his grandfather.His investment advisor has identified four alternatives and constructed the following payoff table which shows expected profits (in $10,000's)for various market conditions. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Market Condition }$ Investment Bull Neutral Bear T-Bills 3 3 3 Stocks 21 11 -30 Bonds 15 4 -3 Mixture 13 6 -10 For the combination of 'T-Bills' and 'Neutral', the opportunity loss is _________.

(Multiple Choice)

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Question 98

A CEO is looking to determine how much profit the company can make if they purchase one of their competitors.Key to the decision is how much profit each competitor is likely to make given different levels of future demand in their market.Estimates of the profits for each competitor that could be purchased are estimated in the table below based on demand.If the CEO knows that demand will experience a small increase, which competitor should the company purchase? PAYOFFS ( \mil ) Biprificarit decrease Small decrease Bmall increase Siprificarit increase Competitor A \ 50 \ 100 \ 270 \ 1,450 Competitor B \ 25 \ 75 \ 350 \ 1,330 Competitor C \ 15 \ 80 \ 300 \ 1,700 Competitor D \ 55 \ 90 \ 33 \ 1,500

(Multiple Choice)

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Question 99

Dan Hein owns the mineral and drilling rights to a 1,000 acre tract of land.If he drills a well and does not strike oil his net loss will be $50,000, but if he drills a well and strikes oil his net gain will be $100,000.If he does not drill, his loss is the cost of the mineral and drilling rights, which amount to $1000.The probability of the state of nature "oil in the tract" is unknown.If Dan is a pessimist, he would choose the ____________.

(Multiple Choice)

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Question 100

Consider the following decision table with rewards in $ millions. State of Nature Decision Alternatives -1 2 8 -3 7 5 -0.5 0.75 1 0 0 0 -1 -1 -1 Using the Hurwicz criterion with alpha = 0.1, the appropriate choice would be ________.

In a decision-making under uncertainty scenario, the best decision alternative based on the strategy of minmax regret will always have zero regret.

In decision-making under uncertainty, an optimistic approach is the __________.

In a decision analysis problem, variables (such as general macroeconomic conditions)which are not under the decision maker's control are called prior probabilities.

The expected monetary value without information is $2,500, and the expected monetary payoff with perfect information is $5,000.The expected value of perfect information is ____________.

In decision-making under uncertainty, the approach that considers only the best and the worst payoffs for each decision alternative is the __________.

When deciding whether to purchase sample information, the revised probabilities due to that information can be incorporated through the application of Bayes' rule.

In a decision-making under risk scenario, the expected monetary value of a decision alternative is the arithmetic average of the payoffs to the decision alternative in each state of the nature.

Consider the following decision table with rewards in $ millions. State of Nature Decision Alternatives -1 2 8 -3 7 5 -0.5 0.75 1 0 0 0 -1 -1 -1 Using the Hurwicz criterion with alpha = 0.2, the appropriate choice would be ________.

Consider the following decision table with rewards in $ millions. State of Nature ( Decision Alternatives -1 2 8 -3 y 5 -0.5 0.75 1 0 0 0 x -1 -1 If you are using the maximin criterion and decide d₄, then x is ______.

Introduction to Statistics and Business Analytics

Visualizing Data With Charts and Graphs

Descriptive Statistics

Probability

Discrete Distributions

Continuous Distributions

Sampling and Sampling Distributions

Statistical Inference: Estimation for Single Populations

Statistical Inference: Hypothesis Testing for Single Populations

Statistical Inferences About Two Populations

Analysis of Variance and Design of Experiments

Simple Regression Analysis and Correlation

Multiple Regression Analysis

Building Multiple Regression Models

Time-Series Forecasting and Index Numbers

Analysis of Categorical Data

Nonparametric Statistics

Statistical Quality Control

Filters

Exam 19: Decision Analysis

Consider the following decision table with rewards in $ millions. State of Nature Decision Alternatives -1 2 8 -3 7 5 -0.5 0.75 1 0 0 0 -1 -1 -1 Using the Hurwicz criterion with alpha = 0.1, the appropriate choice would be ________.

In a decision-making under uncertainty scenario, the best decision alternative based on the strategy of minmax regret will always have zero regret.

In decision-making under uncertainty, an optimistic approach is the __________.

In a decision analysis problem, variables (such as general macroeconomic conditions)which are not under the decision maker's control are called prior probabilities.

The expected monetary value without information is $2,500, and the expected monetary payoff with perfect information is $5,000.The expected value of perfect information is ____________.

In decision-making under uncertainty, the approach that considers only the best and the worst payoffs for each decision alternative is the __________.

When deciding whether to purchase sample information, the revised probabilities due to that information can be incorporated through the application of Bayes' rule.

In a decision-making under risk scenario, the expected monetary value of a decision alternative is the arithmetic average of the payoffs to the decision alternative in each state of the nature.

Consider the following decision table with rewards in $ millions. State of Nature Decision Alternatives -1 2 8 -3 7 5 -0.5 0.75 1 0 0 0 -1 -1 -1 Using the Hurwicz criterion with alpha = 0.2, the appropriate choice would be ________.

Consider the following decision table with rewards in $ millions. State of Nature ( Decision Alternatives -1 2 8 -3 y 5 -0.5 0.75 1 0 0 0 x -1 -1 If you are using the maximin criterion and decide d4, then x is ______.

Introduction to Statistics and Business Analytics

Visualizing Data With Charts and Graphs

Descriptive Statistics

Probability

Discrete Distributions

Continuous Distributions

Sampling and Sampling Distributions

Statistical Inference: Estimation for Single Populations

Statistical Inference: Hypothesis Testing for Single Populations

Statistical Inferences About Two Populations

Analysis of Variance and Design of Experiments

Simple Regression Analysis and Correlation

Multiple Regression Analysis

Building Multiple Regression Models

Time-Series Forecasting and Index Numbers

Analysis of Categorical Data

Nonparametric Statistics

Statistical Quality Control

Filters

Consider the following decision table with rewards in $ millions. State of Nature ( Decision Alternatives -1 2 8 -3 y 5 -0.5 0.75 1 0 0 0 x -1 -1 If you are using the maximin criterion and decide d₄, then x is ______.