Question 1

What is the expected value with perfect information in the following decision table?

Accepted Answer

A)  90 
B)  250 
C)  260 
D)  300 
E)  340 
A)  90 
B)  250 
C)  260 
D)  300 
E)  340

Question 2

What is the outcome of an alternative/state of nature combination called?

Accepted Answer

A)  price 
B)  conditional value 
C)  expected value 
D)  conditional probability 
E)  conditional expectation 
A)  price 
B)  conditional value 
C)  expected value 
D)  conditional probability 
E)  conditional expectation

Question 3

________ is the criterion for decision making under uncertainty that finds an alternative that maximizes the minimum outcome.

Accepted Answer

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

Question 4

The maximax criterion of decision making requires that all decision alternatives have an equal probability of occurrence.

Accepted Answer

A) True 
 B)False

Question 5

Identify and describe three methods used for decision making under conditions of uncertainty.

Accepted Answer

(1) Maximax is a criterion that finds an

Question 6

There are three equally likely states of nature (High, Medium, and Low demand). If the large factory will post profits of $60,000, $25,000, and -$10,000 under these states of nature, respectively, what is the EMV of the factory?

Accepted Answer

A)  $50,000 
B)  $25,000 
C)  $28,333.33 
D)  $21,666.67 
E)  $65,000 
A)  $50,000 
B)  $25,000 
C)  $28,333.33 
D)  $21,666.67 
E)  $65,000

Question 7

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 Opt

Question 8

A square node on a decision tree infers that:

Accepted Answer

A)  the node splits into various states of nature, of which only one will occur. 
B)  there are several alternatives available. 
C)  the manager must choose an alternative. 
D)  Both B and C 
E)  A, B, and C 
A)  the node splits into various states of nature, of which only one will occur. 
B)  there are several alternatives available. 
C)  the manager must choose an alternative. 
D)  Both B and C 
E)  A, B, and C

Question 9

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

Accepted Answer

The answer of The square symbol used in drawing a...

Question 10

Decision trees:

Accepted Answer

A)  give more accurate solutions than decision tables. 
B)  give less accurate solutions than decision tables. 
C)  are especially powerful when a sequence of decisions must be made. 
D)  are rarely used because one needs specialized software to graph them. 
E)  are too complex to be used by decision makers. 
A)  give more accurate solutions than decision tables. 
B)  give less accurate solutions than decision tables. 
C)  are especially powerful when a sequence of decisions must be made. 
D)  are rarely used because one needs specialized software to graph them. 
E)  are too complex to be used by decision makers.

Question 11

A state of nature is an occurrence or a situation over which the decision maker has little or no control.

Accepted Answer

A) True 
 B)False

Question 12

What is the EMV for Option 2 in the following decision table?

Accepted Answer

A)  10,000 
B)  16,000 
C)  20,000 
D)  24,000 
E)  30,000 
A)  10,000 
B)  16,000 
C)  20,000 
D)  24,000 
E)  30,000

Question 13

The first step in the analytic decision process is to clearly define the problem and the factors that influence it.

Accepted Answer

A) True 
 B)False

Question 14

A decision maker using the maximax criterion on the problem below would choose Alternative ________ because the maximum of the row maximums is ________.

Accepted Answer

A)  A; 60 
B)  B; 80 
C)  C; 70 
D)  D; -100 
E)  D; 140 
A)  A; 60 
B)  B; 80 
C)  C; 70 
D)  D; -100 
E)  D; 140

Question 15

Daily sales of bread by Salvador Monella's Baking Company follow the historical pattern shown in the table below. It costs the bakery 80 cents to produce a loaf of bread, which sells for $1.50. 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 16

In a decision tree, a round symbol represents a state of nature node.

Accepted Answer

A) True 
 B)False

Question 17

Miles is considering buying a new pickup truck for his lawn service firm. The economy in town seems to be growing, and he is wondering whether he should opt for a subcompact, compact, or full-size pickup truck. The smaller truck would have better fuel economy, but would sacrifice capacity and some durability. A friend at the Bureau of Economic Research told him that there is a 30% chance of lower gas prices in his area this year, a 20% chance of higher gas prices, and a 50% chance that gas prices will stay roughly unchanged. Based on this information, Miles has developed a decision table that indicates the profit amount he would end up with after a year for each combination of truck and gas prices. Develop a decision tree for this situation and indicate which type of truck he should select.

Accepted Answer

The tree appears in the drawin

Question 18

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

Accepted Answer

The answer of A(n) ________ is an occurrence or situation...

Question 19

An example of a conditional value would be the payoff from selecting a particular alternative when a particular state of nature occurs.

Accepted Answer

A) True 
 B)False

Question 20

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

What is the expected value with perfect information in the following decision table?

What is the outcome of an alternative/state of nature combination called?

________ is the criterion for decision making under uncertainty that finds an alternative that maximizes the minimum outcome.

The maximax criterion of decision making requires that all decision alternatives have an equal probability of occurrence.

Identify and describe three methods used for decision making under conditions of uncertainty.

There are three equally likely states of nature (High, Medium, and Low demand). If the large factory will post profits of $60,000, $25,000, and -$10,000 under these states of nature, respectively, what is the EMV of the factory?

A square node on a decision tree infers that:

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

Decision trees:

A state of nature is an occurrence or a situation over which the decision maker has little or no control.

What is the EMV for Option 2 in the following decision table?

The first step in the analytic decision process is to clearly define the problem and the factors that influence it.

A decision maker using the maximax criterion on the problem below would choose Alternative because the maximum of the row maximums is .

In a decision tree, a round symbol represents a state of nature node.

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

An example of a conditional value would be the payoff from selecting a particular alternative when a particular state of nature occurs.

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

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Process Strategies

Location Strategies

Human Resources, Job Design, and Work Measurement

Supply Chain Management

Inventory Management

Aggregate Planning and Sop

Material Requirements Planning Mrp and Erp

Short-Term Scheduling

Lean Operations

Maintenance and Reliability

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

Applying Analytics to Big Data in Operations Management

Filters

Exam 17: Decision-Making Tools

What is the expected value with perfect information in the following decision table?

What is the outcome of an alternative/state of nature combination called?

________ is the criterion for decision making under uncertainty that finds an alternative that maximizes the minimum outcome.

The maximax criterion of decision making requires that all decision alternatives have an equal probability of occurrence.

Identify and describe three methods used for decision making under conditions of uncertainty.

There are three equally likely states of nature (High, Medium, and Low demand). If the large factory will post profits of $60,000, $25,000, and -$10,000 under these states of nature, respectively, what is the EMV of the factory?

A square node on a decision tree infers that:

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

Decision trees:

A state of nature is an occurrence or a situation over which the decision maker has little or no control.

What is the EMV for Option 2 in the following decision table?

The first step in the analytic decision process is to clearly define the problem and the factors that influence it.

A decision maker using the maximax criterion on the problem below would choose Alternative ________ because the maximum of the row maximums is ________.

In a decision tree, a round symbol represents a state of nature node.

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

An example of a conditional value would be the payoff from selecting a particular alternative when a particular state of nature occurs.

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

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Process Strategies

Location Strategies

Human Resources, Job Design, and Work Measurement

Supply Chain Management

Inventory Management

Aggregate Planning and Sop

Material Requirements Planning Mrp and Erp

Short-Term Scheduling

Lean Operations

Maintenance and Reliability

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

Applying Analytics to Big Data in Operations Management

Filters

A decision maker using the maximax criterion on the problem below would choose Alternative because the maximum of the row maximums is .