Exam 19: Introduction to Decision Analysis

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A decision tree is a diagram that illustrates the correct ordering of actions and events in a decision analysis problem. Each act or event is represented by a branch on the decision tree.

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Question 1

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True

Sensitivity analysis measures how sensitive a decision is to the number of possible outcomes.

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Question 2

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False

Define sensitivity analysis and how it related to cash flow.

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Question 3

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Sensitivity analysis determines how sensitive the decision to the probabilities being assessed.
Sensitivity analysis can also investigate how much a cash-flow value would have to change before the
decision would change.

Define the process of "folding back the tree" in decision tree analysis.

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Question 4

Which one of the factors below would not affect the complexity of a decision?

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Question 5

The disadvantage of the expected-value criterion is that it does not take into account the decision maker's attitude toward profit.

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Question 6

Which of the following are not examples of non-probabilistic decision criteria?

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Question 7

Probabilistic criteria incorporates the decision maker's probability of each state of nature occurring.

(True/False)

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Question 8

In constructing a payoff table to compute the cost of uncertainty, which of the following defines the correct order of steps taken?

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Question 9

Certainty represents a situation where the results of selecting each alternative are known before the decision is made.

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Question 10

Explain the primary difference between the business decision-making environments of certainty versus uncertainty.

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Question 11

The outcome that is associated with any combination of a particular state of nature and an alternative is called a payoff.

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Question 12

In business, you will encounter a wide variety of decision situations. The two primary decision environments are certainty and uncertainty.

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Question 13

Identify the 4 steps to constructing a decision tree.

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Question 14

Identify the 8 steps of computing the cost of uncertainty.

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Question 15

When we apply the expected-value criterion, the best decision is to select the alternative with the highest average payoff or the lowest average loss.

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Question 16

Explain the difference between the two main categories of decision criteria.

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Question 17

A decision tree provides a "road map" for organizing events, starting with the most recent events and choices first.

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Question 18

Explain the goal of decision analysis and identify three factors that affect the complexity of a decision.

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Question 19

Jamie Anderson is analyzing the following payoff table. She is trying to choose how many salads to make in advance each day before she knows the actual demand.

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Question 20

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A decision tree is a diagram that illustrates the correct ordering of actions and events in a decision analysis problem. Each act or event is represented by a branch on the decision tree.

Sensitivity analysis measures how sensitive a decision is to the number of possible outcomes.

Define sensitivity analysis and how it related to cash flow.

Define the process of "folding back the tree" in decision tree analysis.

Which one of the factors below would not affect the complexity of a decision?

The disadvantage of the expected-value criterion is that it does not take into account the decision maker's attitude toward profit.

Which of the following are not examples of non-probabilistic decision criteria?

Probabilistic criteria incorporates the decision maker's probability of each state of nature occurring.

In constructing a payoff table to compute the cost of uncertainty, which of the following defines the correct order of steps taken?

Certainty represents a situation where the results of selecting each alternative are known before the decision is made.

Explain the primary difference between the business decision-making environments of certainty versus uncertainty.

The outcome that is associated with any combination of a particular state of nature and an alternative is called a payoff.

In business, you will encounter a wide variety of decision situations. The two primary decision environments are certainty and uncertainty.

Identify the 4 steps to constructing a decision tree.

Identify the 8 steps of computing the cost of uncertainty.

When we apply the expected-value criterion, the best decision is to select the alternative with the highest average payoff or the lowest average loss.

Explain the difference between the two main categories of decision criteria.

A decision tree provides a "road map" for organizing events, starting with the most recent events and choices first.

Explain the goal of decision analysis and identify three factors that affect the complexity of a decision.

Jamie Anderson is analyzing the following payoff table. She is trying to choose how many salads to make in advance each day before she knows the actual demand.

The Where, Why, and How of Data Collection

Graphs, Charts and Tablesdescribing Your Data

Describing Data Using Numerical Measures

Introduction to Probability

Discrete Probability Distributions

Introduction to Continuous Probability Distributions

Introduction to Sampling Distributions

Estimating Single Population Parameters

Introduction to Hypothesis Testing

Estimation and Hypothesis Testing for Two Population Parameters

Hypothesis Tests and Estimation for Population Variances

Analysis of Variance

Goodness-Of-Fit Tests and Contingency Analysis

Introduction to Linear Regression and Correlation Analysis

Multiple Regression Analysis and Model Building

Analyzing and Forecasting Time-Series Data

Introduction to Nonparametric Statistics

Introducing Business Analytics

Introduction to Quality and Statistical Process Control

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