Question 1

Two people who face the same problem and use the same decision-making methodology must always arrive at the same decision

Accepted Answer

A) True 
 B)False

Question 2

A event node in a decision tree indicates that a decision needs to be made at that point

Accepted Answer

A) True 
 B)False

Question 3

In decision analysis,states of nature refer to possible future conditions

Accepted Answer

A) True 
 B)False

Question 4

The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, moderate, or high, as follows.
  
-If he uses Bayes' decision rule,which size bus will he decide to purchase?

Accepted Answer

A) Small 
B) Medium 
C) Large 
D) Either small or medium 
E) Either medium or large 
A) Small 
B) Medium 
C) Large 
D) Either small or medium 
E) Either medium or large

Question 5

Two professors at a nearby university want to co-author a new textbook in either economics or statistics.They feel that if they write an economics book they have a 50% chance of placing it with a major publisher where it should ultimately sell about 40,000 copies.If they can't get a major publisher to take it,then they feel they have an 80% chance of placing it with a smaller publisher,with sales of 30,000 copies.On the other hand if they write a statistics book,they feel they have a 40% chance of placing it with a major publisher,and it should result in ultimate sales of about 50,000 copies.If they can't get a major publisher to take it,they feel they have a 50% chance of placing it with a smaller publisher,with ultimate sales of 35,000 copies.
-What is the probability that the statistics book would wind up being placed with a smaller publisher?

Accepted Answer

A) 0 6 
B) 0 5 
C) 0 4 
D) 0 3 
E) 0 
A) 0 6 
B) 0 5 
C) 0 4 
D) 0 3 
E) 0

Question 6

A posterior probability is a revised probability of a state of nature after doing a test or survey to refine the prior probability

Accepted Answer

A) True 
 B)False

Question 7

There is an option of paying $100 to have research done to better predict which state of nature will occur.When the true state of nature is S1,the research will accurately predict S1 60% of the time.When the true state of nature is S2,the research will accurately predict S2 80% of the time.
-Given that the research is done,what is the joint probability that the state of nature is S2 and the research predicts S2?

Accepted Answer

A) 0 08 
B) 0 16 
C) 0 24 
D) 0 32 
E) 0 36 
A) 0 08 
B) 0 16 
C) 0 24 
D) 0 32 
E) 0 36

Question 8

-The maximin strategy is:

Accepted Answer

A) small 
B) medium 
C) medium large 
D) large 
E) extra large 
A) small 
B) medium 
C) medium large 
D) large 
E) extra large

Question 9

There is an option of paying $100 to have research done to better predict which state of nature will occur.When the true state of nature is S1,the research will accurately predict S1 60% of the time.When the true state of nature is S2,the research will accurately predict S2 80% of the time.
-Given that the research is not done,what is the expected payoff using Bayes' decision rule?

Accepted Answer

A) 0 
B) 29 
C) 40 
D) 75 
E) 100 
A) 0 
B) 29 
C) 40 
D) 75 
E) 100

Question 10

States of nature are alternatives available to a decision maker

Accepted Answer

A) True 
 B)False

Question 11

The maximum likelihood criterion says to focus on the largest payoff

Accepted Answer

A) True 
 B)False

Question 12

Two professors at a nearby university want to co-author a new textbook in either economics or statistics.They feel that if they write an economics book they have a 50% chance of placing it with a major publisher where it should ultimately sell about 40,000 copies.If they can't get a major publisher to take it,then they feel they have an 80% chance of placing it with a smaller publisher,with sales of 30,000 copies.On the other hand if they write a statistics book,they feel they have a 40% chance of placing it with a major publisher,and it should result in ultimate sales of about 50,000 copies.If they can't get a major publisher to take it,they feel they have a 50% chance of placing it with a smaller publisher,with ultimate sales of 35,000 copies.
-What is the probability that the economics book would wind up being placed with a smaller publisher?

Accepted Answer

A) 0 8 
B) 0 5 
C) 0 4 
D) 0 2 
E) 0 1 
A) 0 8 
B) 0 5 
C) 0 4 
D) 0 2 
E) 0 1

Question 13

A risk seeker has a decreasing marginal utility for money

Accepted Answer

A) True 
 B)False

Question 14

Using Bayes' decision rule will always lead to larger payoffs

Accepted Answer

A) True 
 B)False

Question 15

The maximin criterion refers to:

Accepted Answer

A) minimizing the maximum return 
B) maximizing the minimum return 
C) choosing the alternative with the highest payoff 
D) choosing the alternative with the minimum payoff 
E) None of the above 
A) minimizing the maximum return 
B) maximizing the minimum return 
C) choosing the alternative with the highest payoff 
D) choosing the alternative with the minimum payoff 
E) None of the above

Question 16

The construction manager for ABC Construction must decide whether to build single family homes,apartments,or condominiums.he estimates annual profits (in $000)will vary with the population trend as follows:
  
-If he uses Bayes' decision rule,which kind of dwellings will he decide to build?

Accepted Answer

A) Single family 
B) Apartments 
C) Condos 
D) Either single family or apartments 
E) Either apartments or condos 
A) Single family 
B) Apartments 
C) Condos 
D) Either single family or apartments 
E) Either apartments or condos

Question 17

The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, moderate, or high, as follows.
  
-If he uses the maximum likelihood criterion,which size bus will he decide to purchase?

Accepted Answer

A) Small 
B) Medium 
C) Large 
D) Either small or medium 
E) Either medium or large 
A) Small 
B) Medium 
C) Large 
D) Either small or medium 
E) Either medium or large

Question 18

The EVPI indicates an upper limit in the amount a decision-maker should be willing to spend to obtain information

Accepted Answer

A) True 
 B)False

Question 19

What is the expected annual profit for the bus that he will decide to purchase using Bayes' decision rule?

Accepted Answer

A) $15,000 
B) $61,000 
C) $69,000 
D) $72,000 
E) $87,000 
A) $15,000 
B) $61,000 
C) $69,000 
D) $72,000 
E) $87,000

Question 20

The expected value of perfect information is:

Accepted Answer

A) 12 
B) 55 
C) 57 
D) 69 
E) 90 
A) 12 
B) 55 
C) 57 
D) 69 
E) 90

Two people who face the same problem and use the same decision-making methodology must always arrive at the same decision

A event node in a decision tree indicates that a decision needs to be made at that point

In decision analysis,states of nature refer to possible future conditions

A posterior probability is a revised probability of a state of nature after doing a test or survey to refine the prior probability

-The maximin strategy is:

States of nature are alternatives available to a decision maker

The maximum likelihood criterion says to focus on the largest payoff

A risk seeker has a decreasing marginal utility for money

Using Bayes' decision rule will always lead to larger payoffs

The maximin criterion refers to:

The construction manager for ABC Construction must decide whether to build single family homes,apartments,or condominiums.he estimates annual profits (in $000)will vary with the population trend as follows: -If he uses Bayes' decision rule,which kind of dwellings will he decide to build?

The EVPI indicates an upper limit in the amount a decision-maker should be willing to spend to obtain information

What is the expected annual profit for the bus that he will decide to purchase using Bayes' decision rule?

The expected value of perfect information is:

Introduction

Linear programming: Basic Concepts

Linear programming: Formulation and applications

Theart of modeling with spread sheets

What-If Analysis for linear programming

Network optimization problems

Using binary integer programming to deal withy es-Or-No decisions

Non linear programming

Forecasting

Queuing models

Computer simulation: Basic Concepts

Computer simulation with risks olver platform

Solution concepts for linear programming

Transportation and assignment problems

Pert CPM models for project management

Goal programming

Inventory management with known demand

Inventory management with uncertain demand

Computer simulation with crystal ball

Filters

Exam 9: Decision Analysis

Two people who face the same problem and use the same decision-making methodology must always arrive at the same decision

A event node in a decision tree indicates that a decision needs to be made at that point

In decision analysis,states of nature refer to possible future conditions

A posterior probability is a revised probability of a state of nature after doing a test or survey to refine the prior probability

-The maximin strategy is:

States of nature are alternatives available to a decision maker

The maximum likelihood criterion says to focus on the largest payoff

A risk seeker has a decreasing marginal utility for money

Using Bayes' decision rule will always lead to larger payoffs

The maximin criterion refers to:

The construction manager for ABC Construction must decide whether to build single family homes,apartments,or condominiums.he estimates annual profits (in $000)will vary with the population trend as follows: -If he uses Bayes' decision rule,which kind of dwellings will he decide to build?

The EVPI indicates an upper limit in the amount a decision-maker should be willing to spend to obtain information

What is the expected annual profit for the bus that he will decide to purchase using Bayes' decision rule?

The expected value of perfect information is:

Introduction

Linear programming: Basic Concepts

Linear programming: Formulation and applications

Theart of modeling with spread sheets

What-If Analysis for linear programming

Network optimization problems

Using binary integer programming to deal withy es-Or-No decisions

Non linear programming

Forecasting

Queuing models

Computer simulation: Basic Concepts

Computer simulation with risks olver platform

Solution concepts for linear programming

Transportation and assignment problems

Pert CPM models for project management

Goal programming

Inventory management with known demand

Inventory management with uncertain demand

Computer simulation with crystal ball

Filters