Question 1

The expected value of an alternative can never be negative.

Accepted Answer

A) True 
 B)False

Question 2

Risk analysis helps the decision maker recognize the difference between the expected value of a decision alternative and the payoff that may actually occur.

Accepted Answer

A) True 
 B)False

Question 3

EVPI is always greater than or equal to EVSI.

Accepted Answer

A) True 
 B)False

Question 4

Circular nodes in a decision tree indicate that it would be incorrect to choose a path from the node.

Accepted Answer

A) True 
 B)False

Question 5

The options from which a decision maker chooses a course of action are

Accepted Answer

A)  called the decision alternatives. 
B)  under the control of the decision maker. 
C)  not the same as the states of nature. 
D)  All of the alternatives are true. 
A)  called the decision alternatives. 
B)  under the control of the decision maker. 
C)  not the same as the states of nature. 
D)  All of the alternatives are true.

Question 6

Fold back the decision tree and state what strategy should be followed.

Accepted Answer

@#IMG-DLM& Strategy: Select A.

Question 7

Which of the following approaches to decision making requires knowledge of the probabilities of the states of nature?

Accepted Answer

A)  minimax regret 
B)  maximin 
C)  expected value 
D)  conservative 
A)  minimax regret 
B)  maximin 
C)  expected value 
D)  conservative

Question 8

To find the EVSI,

Accepted Answer

A)  use the EVPI to calculate sample information probabilities. 
B)  use indicator probabilities to calculate prior probabilities. 
C)  use prior and sample information probabilities to calculate revised probabilities. 
D)  use sample information to revise the sample information probabilities. 
A)  use the EVPI to calculate sample information probabilities. 
B)  use indicator probabilities to calculate prior probabilities. 
C)  use prior and sample information probabilities to calculate revised probabilities. 
D)  use sample information to revise the sample information probabilities.

Question 9

Sensitivity analysis considers

Accepted Answer

A)  how sensitive the decision maker is to risk. 
B)  changes in the number of states of nature. 
C)  changes in the values of the payoffs. 
D)  changes in the available alternatives. 
A)  how sensitive the decision maker is to risk. 
B)  changes in the number of states of nature. 
C)  changes in the values of the payoffs. 
D)  changes in the available alternatives.

Question 10

Making a good decision

Accepted Answer

A)  requires probabilities for all states of nature. 
B)  requires a clear understanding of decision alternatives, states of nature, and payoffs. 
C)  implies that a desirable outcome will occur. 
D)  All of the alternatives are true. 
A)  requires probabilities for all states of nature. 
B)  requires a clear understanding of decision alternatives, states of nature, and payoffs. 
C)  implies that a desirable outcome will occur. 
D)  All of the alternatives are true.

Question 11

For a maximization problem, the conservative approach is often referred to as the

Accepted Answer

A)  minimax approach 
B)  maximin approach 
C)  maximax approach 
D)  minimum approach 
A)  minimax approach 
B)  maximin approach 
C)  maximax approach 
D)  minimum approach

Question 12

Decision alternatives are structured so that several could occur simultaneously.

Accepted Answer

A) True 
 B)False

Question 13

For a maximization problem, the optimistic approach is often referred to as the

Accepted Answer

A)  minimax approach 
B)  maximin approach 
C)  maximax approach 
D)  minimum approach 
A)  minimax approach 
B)  maximin approach 
C)  maximax approach 
D)  minimum approach

Question 14

Maximizing the expected payoff and minimizing the expected opportunity loss result in the same recommended decision.

Accepted Answer

A) True 
 B)False

Question 15

The expected value of sample information can never be less than the expected value of perfect information.

Accepted Answer

A) True 
 B)False

Question 16

A payoff

Accepted Answer

A)  is always measured in profit. 
B)  is always measured in cost. 
C)  exists for each pair of decision alternative and state of nature. 
D)  exists for each state of nature. 
A)  is always measured in profit. 
B)  is always measured in cost. 
C)  exists for each pair of decision alternative and state of nature. 
D)  exists for each state of nature.

The expected value of an alternative can never be negative.

Risk analysis helps the decision maker recognize the difference between the expected value of a decision alternative and the payoff that may actually occur.

EVPI is always greater than or equal to EVSI.

Circular nodes in a decision tree indicate that it would be incorrect to choose a path from the node.

The options from which a decision maker chooses a course of action are

Fold back the decision tree and state what strategy should be followed.

Which of the following approaches to decision making requires knowledge of the probabilities of the states of nature?

To find the EVSI,

Sensitivity analysis considers

Making a good decision

For a maximization problem, the conservative approach is often referred to as the

Decision alternatives are structured so that several could occur simultaneously.

For a maximization problem, the optimistic approach is often referred to as the

Maximizing the expected payoff and minimizing the expected opportunity loss result in the same recommended decision.

The expected value of sample information can never be less than the expected value of perfect information.

A payoff

Introduction

An Introduction to Linear Programming

Linear Programming: Sensitivity Analysis and Interpretation of Solution

Linear Programming Applications in Marketing, Finance, and Operations Management

Advanced Linear Programming Applications

Distribution and Network Models

Integer Linear Programming

Nonlinear Optimization Models

Project Scheduling: Pertcpm

Inventory Models

Waiting Line Models

Simulation

Multicriteria Decisions

Forecasting

Markov Processes

Filters

Exam 13: Decision Analysis

The expected value of an alternative can never be negative.

Risk analysis helps the decision maker recognize the difference between the expected value of a decision alternative and the payoff that may actually occur.

EVPI is always greater than or equal to EVSI.

Circular nodes in a decision tree indicate that it would be incorrect to choose a path from the node.

The options from which a decision maker chooses a course of action are

Fold back the decision tree and state what strategy should be followed.

Which of the following approaches to decision making requires knowledge of the probabilities of the states of nature?

To find the EVSI,

Sensitivity analysis considers

Making a good decision

For a maximization problem, the conservative approach is often referred to as the

Decision alternatives are structured so that several could occur simultaneously.

For a maximization problem, the optimistic approach is often referred to as the

Maximizing the expected payoff and minimizing the expected opportunity loss result in the same recommended decision.

The expected value of sample information can never be less than the expected value of perfect information.

A payoff

Introduction

An Introduction to Linear Programming

Linear Programming: Sensitivity Analysis and Interpretation of Solution

Linear Programming Applications in Marketing, Finance, and Operations Management

Advanced Linear Programming Applications

Distribution and Network Models

Integer Linear Programming

Nonlinear Optimization Models

Project Scheduling: Pertcpm

Inventory Models

Waiting Line Models

Simulation

Multicriteria Decisions

Forecasting

Markov Processes

Filters