Question 1

-The maximin 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 2

The exponential utility function assumes a constant aversion to risk

Accepted Answer

A) True 
 B)False

Question 3

Bayes' theorem is a formula for determining prior probabilities of a state of nature

Accepted Answer

A) True 
 B)False

Question 4

An advantage of payoff tables compared to decision trees is that they permit us to analyze situations involving sequential decisions

Accepted Answer

A) True 
 B)False

Question 5

The Bayes' decision rule 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 6

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.
-What is the expected value of perfect information?

Accepted Answer

A) 40 
B) 45 
C) 75 
D) 85 
E) 100 
A) 40 
B) 45 
C) 75 
D) 85 
E) 100

Question 7

What is the posterior probability of S1 given that the research predicts S1?

Accepted Answer

A) 0 18 
B) 0 44 
C) 0 57 
D) 0 65 
E) 0 82 
A) 0 18 
B) 0 44 
C) 0 57 
D) 0 65 
E) 0 82

Question 8

-The maximum likelihood 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

The expected value of perfect information is:

Accepted Answer

A) 4 5 
B) 9 
C) 40 5 
D) 49 5 
E) 60 
A) 4 5 
B) 9 
C) 40 5 
D) 49 5 
E) 60

Question 10

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 economics 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 11

A decision tree branches out all of the possible decisions and all of the possible events

Accepted Answer

A) True 
 B)False

Question 12

-The maximin 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 13

Which of the following is not a criterion for decision making?

Accepted Answer

A) EVPI 
B) Maximin 
C) Maximax 
D) Bayes' decision rule 
E) Maximum likelihood 
A) EVPI 
B) Maximin 
C) Maximax 
D) Bayes' decision rule 
E) Maximum likelihood

Question 14

Prior probabilities refer to the relative likelihood of possible states of nature

Accepted Answer

A) True 
 B)False

Question 15

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 S1 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 16

The maximin approach involves choosing the alternative with the highest payoff

Accepted Answer

A) True 
 B)False

Question 17

-The maximax 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 18

Graphical analysis can only be used in sensitivity analysis for those problems that have two decision alternatives

Accepted Answer

A) True 
 B)False

-The maximin strategy is:

The exponential utility function assumes a constant aversion to risk

Bayes' theorem is a formula for determining prior probabilities of a state of nature

An advantage of payoff tables compared to decision trees is that they permit us to analyze situations involving sequential decisions

The Bayes' decision rule strategy is:

What is the posterior probability of S1 given that the research predicts S1?

-The maximum likelihood strategy is:

The expected value of perfect information is:

A decision tree branches out all of the possible decisions and all of the possible events

-The maximin strategy is:

Which of the following is not a criterion for decision making?

Prior probabilities refer to the relative likelihood of possible states of nature

The maximin approach involves choosing the alternative with the highest payoff

-The maximax strategy is:

Graphical analysis can only be used in sensitivity analysis for those problems that have two decision alternatives

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

-The maximin strategy is:

The exponential utility function assumes a constant aversion to risk

Bayes' theorem is a formula for determining prior probabilities of a state of nature

An advantage of payoff tables compared to decision trees is that they permit us to analyze situations involving sequential decisions

The Bayes' decision rule strategy is:

What is the posterior probability of S1 given that the research predicts S1?

-The maximum likelihood strategy is:

The expected value of perfect information is:

A decision tree branches out all of the possible decisions and all of the possible events

-The maximin strategy is:

Which of the following is not a criterion for decision making?

Prior probabilities refer to the relative likelihood of possible states of nature

The maximin approach involves choosing the alternative with the highest payoff

-The maximax strategy is:

Graphical analysis can only be used in sensitivity analysis for those problems that have two decision alternatives

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