Question 1

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

Accepted Answer

A) $187,000 
B) $132,000 
C) $123,000 
D) $65,000 
E) $55,000 
A) $187,000 
B) $132,000 
C) $123,000 
D) $65,000 
E) $55,000

Question 2

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 the maximum likelihood criterion,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 3

Most people occupy a middle ground and are classified as risk neutral

Accepted Answer

A) True 
 B)False

Question 4

A utility function for money can be constructed by applying a lottery procedure

Accepted Answer

A) True 
 B)False

Question 5

Bayes' decision rule says to choose the alternative with the largest expected payoff

Accepted Answer

A) True 
 B)False

Question 6

The maximum likelihood criterion ignores the payoffs for states of nature other than the most likely one

Accepted Answer

A) True 
 B)False

Question 7

The head of operations for a movie studio wants to determine which of two new scripts they should select for their next major production.She feels that script #1 has a 70% chance of earning $100 million over the long run,but a 30% chance of losing $20 million.If this movie is successful,then a sequel could also be produced,with an 80% chance of earning $50 million,but a 20% chance of losing $10 million.On the other hand,she feels that script #2 has a 60 % chance of earning $120 million,but a 40% chance of losing $30 million.If successful,its sequel would have a 50% chance of earning $80 million and a 50% chance of losing $40 million.As with the first script,if the original movie is a "flop",then no sequel would be produced.
-What would be the total payoff is script #1 were a success,but its sequel were not?

Accepted Answer

A) $150 million 
B) $100 million 
C) $90 million 
D) $50 million 
E) $-10 million 
A) $150 million 
B) $100 million 
C) $90 million 
D) $50 million 
E) $-10 million

Question 8

-The maximax strategy is:

Accepted Answer

A) Buy 
B) Rent 
C) Lease 
D) High 
E) Low 
A) Buy 
B) Rent 
C) Lease 
D) High 
E) Low

Question 9

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 expected payoff for the optimum decision alternative?

Accepted Answer

A) 50,000 copies 
B) 40,000 copies 
C) 32,000 copies 
D) 30,500 copies 
E) 10,500 copies 
A) 50,000 copies 
B) 40,000 copies 
C) 32,000 copies 
D) 30,500 copies 
E) 10,500 copies

Question 10

Testing how a problem solution reacts to changes in one or more of the model parameters is called:

Accepted Answer

A) analysis of tradeoffs 
B) sensitivity analysis 
C) priority recognition 
D) analysis of variance 
E) decision analysis 
A) analysis of tradeoffs 
B) sensitivity analysis 
C) priority recognition 
D) analysis of variance 
E) decision analysis

Question 11

Determining the worst payoff for each alternative and choosing the alternative with the "best worst" is the criterion called:

Accepted Answer

A) minimin 
B) maximin 
C) maximax 
D) maximum likelihood 
E) Bayes decision rule 
A) minimin 
B) maximin 
C) maximax 
D) maximum likelihood 
E) Bayes decision rule

Question 12

Which one of the following statements is not correct when making decisions?

Accepted Answer

A) The sum of the state of nature probabilities must be 1 
B) Every probability must be greater than or equal to 0 
C) All probabilities are assumed to be equal 
D) Probabilities are used to compute expected values 
E) Perfect information assumes that the state of nature that will actually occur is known 
A) The sum of the state of nature probabilities must be 1 
B) Every probability must be greater than or equal to 0 
C) All probabilities are assumed to be equal 
D) Probabilities are used to compute expected values 
E) Perfect information assumes that the state of nature that will actually occur is known

Question 13

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 expected payoff for the decision to write the statistics book?

Accepted Answer

A) 50,000 copies 
B) 40,000 copies 
C) 32,000 copies 
D) 30,500 copies 
E) 10,500 copies 
A) 50,000 copies 
B) 40,000 copies 
C) 32,000 copies 
D) 30,500 copies 
E) 10,500 copies

Question 14

-The maximax strategy is:

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) E 
A) A 
B) B 
C) C 
D) D 
E) E

Question 15

-The maximum likelihood strategy is:

Accepted Answer

A) Buy 
B) Rent 
C) Lease 
D) High 
E) Low 
A) Buy 
B) Rent 
C) Lease 
D) High 
E) Low

Question 16

What is his expected value of perfect information?

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 17

An example of maximax decision making is a person buying lottery tickets in hopes of a very big payoff

Accepted Answer

A) True 
 B)False

Question 18

What is the unconditional probability that the research predicts S2?

Accepted Answer

A) 0 32 
B) 0 4 
C) 0 44 
D) 0 56 
E) 0 6 
A) 0 32 
B) 0 4 
C) 0 44 
D) 0 56 
E) 0 6

Question 19

Sensitivity analysis may be useful in decision analysis since prior probabilities may be inaccurate

Accepted Answer

A) True 
 B)False

Question 20

The head of operations for a movie studio wants to determine which of two new scripts they should select for their next major production.She feels that script #1 has a 70% chance of earning $100 million over the long run,but a 30% chance of losing $20 million.If this movie is successful,then a sequel could also be produced,with an 80% chance of earning $50 million,but a 20% chance of losing $10 million.On the other hand,she feels that script #2 has a 60 % chance of earning $120 million,but a 40% chance of losing $30 million.If successful,its sequel would have a 50% chance of earning $80 million and a 50% chance of losing $40 million.As with the first script,if the original movie is a "flop",then no sequel would be produced.
-What is the probability that script #1 will be a success,but its sequel will not?

Accepted Answer

A) 0 8 
B) 0 7 
C) 0 56 
D) 0 2 
E) 0 14 
A) 0 8 
B) 0 7 
C) 0 56 
D) 0 2 
E) 0 14

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

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 the maximum likelihood criterion,which kind of dwellings will he decide to build?

Most people occupy a middle ground and are classified as risk neutral

A utility function for money can be constructed by applying a lottery procedure

Bayes' decision rule says to choose the alternative with the largest expected payoff

The maximum likelihood criterion ignores the payoffs for states of nature other than the most likely one

-The maximax strategy is:

Testing how a problem solution reacts to changes in one or more of the model parameters is called:

Determining the worst payoff for each alternative and choosing the alternative with the "best worst" is the criterion called:

Which one of the following statements is not correct when making decisions?

-The maximax strategy is:

-The maximum likelihood strategy is:

What is his expected value of perfect information?

An example of maximax decision making is a person buying lottery tickets in hopes of a very big payoff

What is the unconditional probability that the research predicts S2?

Sensitivity analysis may be useful in decision analysis since prior probabilities may be inaccurate

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

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

Most people occupy a middle ground and are classified as risk neutral

A utility function for money can be constructed by applying a lottery procedure

Bayes' decision rule says to choose the alternative with the largest expected payoff

The maximum likelihood criterion ignores the payoffs for states of nature other than the most likely one

-The maximax strategy is:

Testing how a problem solution reacts to changes in one or more of the model parameters is called:

Determining the worst payoff for each alternative and choosing the alternative with the "best worst" is the criterion called:

Which one of the following statements is not correct when making decisions?

-The maximax strategy is:

-The maximum likelihood strategy is:

What is his expected value of perfect information?

An example of maximax decision making is a person buying lottery tickets in hopes of a very big payoff

What is the unconditional probability that the research predicts S2?

Sensitivity analysis may be useful in decision analysis since prior probabilities may be inaccurate

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