Use the following data to answer questions 88-100. \[\begin{array}{l} \quad \quad \quad \quad \quad \quad \quad \quad \text { Expected Demand for Weston Gadgets, Inc. }\\ \begin{array} { | l | l | l | l | } \hline \text { Decision Alternative } & \text { Low 35\% } & \text { Medium 30\% } & \text { High 35\% } \\ \hline \text { Outsource } & \$ 16.00 \text { million } & \$ 28.00 \text { million } & \$ 66.00 \text { million } \\ \hline \text { Build capacity } & \$ 4.00 \text { million } & \$ 32.00 \text { million } & \$ 26.00 \text { million } \\ \hline \text { Do nothing } & \$ 9.00 \text { million } & \$ 18.00 \text { million } & \$ 66.00 \text { million } \\ \hline \end{array} \end{array}\] -Refer to the data on Expected Demand for Weston Gadgets,Inc.Based on the Hurwicz criterion,what is the payoff for the option to outsource if you used the coefficient of realism of 0.6?

A) $46.00 million B) $20.80 million C) $43.20 million D) $33.20 million A) $46.00 million B) $20.80 million C) $43.20 million D) $33.20 million

Use the following data to answer questions 88-100. \[\begin{array}{l} \quad \quad \quad \quad \quad \quad \quad \quad \text { Expected Demand for Weston Gadgets, Inc. }\\ \begin{array} { | l | l | l | l | } \hline \text { Decision Alternative } & \text { Low 35\% } & \text { Medium 30\% } & \text { High 35\% } \\ \hline \text { Outsource } & \$ 16.00 \text { million } & \$ 28.00 \text { million } & \$ 66.00 \text { million } \\ \hline \text { Build capacity } & \$ 4.00 \text { million } & \$ 32.00 \text { million } & \$ 26.00 \text { million } \\ \hline \text { Do nothing } & \$ 9.00 \text { million } & \$ 18.00 \text { million } & \$ 66.00 \text { million } \\ \hline \end{array} \end{array}\] -Refer to the data on Expected Demand for Weston Gadgets,Inc.For the various demand scenarios,if you applied the Laplace criterion,what is the highest payoff?

A) $36.67 million B) $32.17 million C) $33.20 million D) $41.55 million A) $36.67 million B) $32.17 million C) $33.20 million D) $41.55 million

Use the following data to answer questions 88-100. \[\begin{array}{l} \quad \quad \quad \quad \quad \quad \quad \quad \text { Expected Demand for Weston Gadgets, Inc. }\\ \begin{array} { | l | l | l | l | } \hline \text { Decision Alternative } & \text { Low 35\% } & \text { Medium 30\% } & \text { High 35\% } \\ \hline \text { Outsource } & \$ 16.00 \text { million } & \$ 28.00 \text { million } & \$ 66.00 \text { million } \\ \hline \text { Build capacity } & \$ 4.00 \text { million } & \$ 32.00 \text { million } & \$ 26.00 \text { million } \\ \hline \text { Do nothing } & \$ 9.00 \text { million } & \$ 18.00 \text { million } & \$ 66.00 \text { million } \\ \hline \end{array} \end{array}\] -Refer to the data on Expected Demand for Weston Gadgets,Inc.For the various demand scenarios and their associated probabilities,which of the following decision alternatives has the maximum expected value?

A) Build capacity B) Do nothing C) Outsource D) either Do nothing or Outsource A) Build capacity B) Do nothing C) Outsource D) either Do nothing or Outsource

Exam 29: Decision-Making Tools

XYZ is a paint product manufacturer,and one of the plants is experiencing a substantial increase in demand.The future demand for the products could be low,medium,or high,with probabilities estimated to be 25%,50%,and 30%,respectively.The company wants to determine the financial impact associated with the three decision alternatives under the varying levels of demand.Given the following payoff matrix,compute the EVPI. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Demand }$ De cision alternative (20\%) Medium (50\%) High (30\%) S ubcontract additional capacity \ 7 million \ 40 million \ 70 million Build a new plant -\ 55 million \ 25 million \ 100 million Do nothing \ 15 million \3 0 million \ 85 million

(Multiple Choice)

5.0/5

(38)

Question 61

Which of the following statements is FALSE about minimax regret criterion?

(Multiple Choice)

4.9/5

(32)

Question 62

The classification of decision-making situations is based on ______ about the states of nature

(Multiple Choice)

4.7/5

(49)

Question 63

Which of the following statement is FALSE about the expected value approach to make decisions under risk?

(Multiple Choice)

5.0/5

(39)

Question 64

Use the following data to answer questions 77-87. -Refer to the data on Expected Demand for Acme Widgets.If the company has information that demand is going to be low,what is the option that the company should choose?

(Multiple Choice)

4.7/5

(38)

Question 65

ABC operates a factory in the United Kingdom.Because the company's existing factory doesn't have the capacity to meet the future demands,it is considering various options.Consider the payoff matrix that shows the payoff for each combination of decision and state of nature.Determine the best alternative using the Hurwicz criterion.Assume α = 0.7.

(Multiple Choice)

4.7/5

(33)

Question 66

Which of the following is a drawback of the maximax criterion?

(Multiple Choice)

4.9/5

(43)

Question 67

Use the following data to answer questions 88-100. Expected Demand for Weston Gadgets, Inc. Decision Alternative Low 35\% Medium 30\% High 35\% Outsource \ 16.00 million \ 28.00 million \ 66.00 million Build capacity \ 4.00 million \ 32.00 million \ 26.00 million Do nothing \ 9.00 million \ 18.00 million \ 66.00 million -Refer to the data on Expected Demand for Weston Gadgets,Inc.Based on the Hurwicz criterion,what is the payoff for the option to outsource if you used the coefficient of realism of 0.6?

(Multiple Choice)

4.8/5

(38)

Question 68

In a decision tree,branches from a square node represent ______.

(Multiple Choice)

5.0/5

(26)

Question 69

Use the following data to answer questions 88-100. Expected Demand for Weston Gadgets, Inc. Decision Alternative Low 35\% Medium 30\% High 35\% Outsource \ 16.00 million \ 28.00 million \ 66.00 million Build capacity \ 4.00 million \ 32.00 million \ 26.00 million Do nothing \ 9.00 million \ 18.00 million \ 66.00 million -Refer to the data on Expected Demand for Weston Gadgets,Inc.For the various demand scenarios,if you applied the Laplace criterion,what is the highest payoff?

(Multiple Choice)

4.8/5

(36)

Question 70

Use the following data to answer questions 77-87. -Refer to the data on Expected Demand for Acme Widgets.For the various demand scenarios and their associated probabilities,the option to do nothing has an expected value of ______.

(Multiple Choice)

4.8/5

(38)

Question 71

Use the following data to answer questions 88-100. Expected Demand for Weston Gadgets, Inc. Decision Alternative Low 35\% Medium 30\% High 35\% Outsource \ 16.00 million \ 28.00 million \ 66.00 million Build capacity \ 4.00 million \ 32.00 million \ 26.00 million Do nothing \ 9.00 million \ 18.00 million \ 66.00 million -Refer to the data on Expected Demand for Weston Gadgets,Inc.For the various demand scenarios and their associated probabilities,which of the following decision alternatives has the maximum expected value?

(Multiple Choice)

4.7/5

(39)

Question 72

A company's decision to introduce a new product into the market is an example of ______.

(Multiple Choice)

4.7/5

(31)

Question 73

A decision tree is drawn from ______.

(Multiple Choice)

4.9/5

(33)

Question 74

In Hurwicz criterion,coefficient α's mirror image (1-α)is called the ______.

(Multiple Choice)

4.9/5

(33)

Question 75

XYZ is a paint product manufacturer,and one of the plants is experiencing a substantial increase in demand.The future demand for the products could be low,medium,or high,with probabilities estimated to be 25%,50%,and 30%,respectively.The company wants to determine the financial impact associated with the three decision alternatives under the varying levels of demand.Given the following payoff matrix,the firm's manager should ______. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Demand }$ De cision alternative (20\%) Medium (50\%) High (30\%) S ubcontract additional capacity \ 7 million \ 40 million \ 70 million Build a new plant -\ 55 million \ 25 million \ 100 million Do nothing \ 15 million \3 0 million \ 85 million

(Multiple Choice)

4.7/5

(40)

Question 76

The systematic decision-making process that operations and supply chain managers rely on consists of ______ steps:

(Multiple Choice)

4.9/5

(39)

Question 77

Use the following data to answer questions 77-87. -Refer to the data on Expected Demand for Acme Widgets.For the various demand scenarios and their associated probabilities,which of the three decision alternatives has the maximum expected value?

(Multiple Choice)

4.9/5

(44)

Question 78

Consider that you are getting ready to leave outside in the morning,and weather forecasters predict rain.If you decide to take your raincoat and it rains,which of the following is the corresponding payoff?

(Multiple Choice)

4.8/5

(30)

Question 79

In a decision tree,a square node represents a ______.

(Multiple Choice)

4.8/5

(29)

Question 80

Exam 29: Decision-Making Tools

Which of the following statements is FALSE about minimax regret criterion?

The classification of decision-making situations is based on ______ about the states of nature

Which of the following statement is FALSE about the expected value approach to make decisions under risk?

Use the following data to answer questions 77-87. -Refer to the data on Expected Demand for Acme Widgets.If the company has information that demand is going to be low,what is the option that the company should choose?

Which of the following is a drawback of the maximax criterion?

In a decision tree,branches from a square node represent ______.

Use the following data to answer questions 77-87. -Refer to the data on Expected Demand for Acme Widgets.For the various demand scenarios and their associated probabilities,the option to do nothing has an expected value of ______.

A company's decision to introduce a new product into the market is an example of ______.

A decision tree is drawn from ______.

In Hurwicz criterion,coefficient α's mirror image (1-α)is called the ______.

The systematic decision-making process that operations and supply chain managers rely on consists of ______ steps:

Use the following data to answer questions 77-87. -Refer to the data on Expected Demand for Acme Widgets.For the various demand scenarios and their associated probabilities,which of the three decision alternatives has the maximum expected value?

Consider that you are getting ready to leave outside in the morning,and weather forecasters predict rain.If you decide to take your raincoat and it rains,which of the following is the corresponding payoff?

In a decision tree,a square node represents a ______.

Introduction to Managing Global Operations and Supply Chains

Operations and Supply Chain Strategies

Project Management

Supplement: Project Management

Product and Service Innovations

Supplement: Reliability

Managing for Quality

Quality Improvement and Control Tools

Capacity Planning

Supply Chain Design and Location Planning

Process Design and Layout Planning

Supplement: Tools for Analyzing, Designing, and Selecting Processes and Layouts

Supplier Management

Logistics Management

Demand Management and Customer Service

Demand Forecasting Methods

Lean Operations and Supply Chains

Inventory Management

Inventory Control Models

Sales and Operations Planning

Master Scheduling and Material Requirements Planning

Supplement: Capacity Requirements Planning, MRP II, ERP, and DRP

Detailed Scheduling

Linear Programming

The Transportation Models

Waiting Line Models

Simulation

Learning Curves

Filters