Question 1

In a decision-making situation, the events that may occur in the future are known as states of nature.

Accepted Answer

A) True 
 B)False  True

Question 2

Kallie Inc., a small parts manufacturer, has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand. The following payoff table describes the company's decision situation.   The best decision for Kallie Inc. using the maximin decision criterion is to

Accepted Answer

A)  expand facilities. 
B)  acquire competitor. 
C)  subcontract production. 
D)  select high demand. 
A)  expand facilities. 
B)  acquire competitor. 
C)  subcontract production. 
D)  select high demand. C

Question 3

Fairco, a family business, is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The following payoff table describes the decision situation.   The best decision for Fairco using the Hurwicz criterion with a coefficient of optimism equal to 0.80 would be to

Accepted Answer

A)  make the large investment. 
B)  make the medium investment. 
C)  make the small investment. 
D)  choose stable demand. 
A)  make the large investment. 
B)  make the medium investment. 
C)  make the small investment. 
D)  choose stable demand. A

Question 4

The LaPlace criterion is a decision criterion in which each state of nature is weighted equally.

Accepted Answer

A) True 
 B)False

Question 5

A decision criterion in which the decision payoffs are weighted by a coefficient of optimism is known as the Hurwicz criterion.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following techniques is the most widely used decision-making criterion under risk?

Accepted Answer

A)  maximax criterion 
B)  minimax regret criterion 
C)  expected value criterion 
D)  Hurwicz criterion 
A)  maximax criterion 
B)  minimax regret criterion 
C)  expected value criterion 
D)  Hurwicz criterion

Question 7

Decision analysis is a quantitative technique supporting decision-making with uncertainty.

Accepted Answer

A) True 
 B)False

Question 8

What is decision analysis?

Accepted Answer

Decision analysis is a set of quantitati

Question 9

When probabilities can be assigned to the occurrence of states of nature in the future, the situation is referred to as

Accepted Answer

A)  decision-making under risk. 
B)  decision-making under certainty. 
C)  decision-making under uncertainty. 
D)  None of these answers is correct. 
A)  decision-making under risk. 
B)  decision-making under certainty. 
C)  decision-making under uncertainty. 
D)  None of these answers is correct.

Question 10

Quantitative methods are tools available to operations managers to help make a decision but not a recommendation.

Accepted Answer

A) True 
 B)False

Question 11

Kallie Inc., a small parts manufacturer, has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand, with probabilities of 0.6 and 0.4, respectively. The following payoff table describes the company's decision situation.   The expected value for the acquire competitor decision is

Accepted Answer

A)  $250,000. 
B)  $160,000. 
C)  $700,000. 
D)  $1,200,000. 
A)  $250,000. 
B)  $160,000. 
C)  $700,000. 
D)  $1,200,000.

Question 12

Fairco, a family business, is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The business believes that the probability for increasing, stable and decreasing product demand are 0.4, 0.5, and 0.1, respectively. The following payoff table describes the decision situation.   If the expected value criterion is used, then the best decision would be to

Accepted Answer

A)  make the large investment. 
B)  make the medium investment. 
C)  make the small investment. 
D)  choose the stable demand. 
A)  make the large investment. 
B)  make the medium investment. 
C)  make the small investment. 
D)  choose the stable demand.

Question 13

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand, with probabilities of 0.6 and 0.4, respectively. The following payoff table describes the company's decision situation.   The best decision according to the expected value criterion is

Accepted Answer

A)  Acquire Competitor. 
B)  Expand Facilities. 
C)  Subcontract Production. 
D)  High Demand 
A)  Acquire Competitor. 
B)  Expand Facilities. 
C)  Subcontract Production. 
D)  High Demand

Question 14

Quantitative methods are tools available to operations managers to help make a decision or recommendation.

Accepted Answer

A) True 
 B)False

Question 15

Kallie Inc., a small parts manufacturer, has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand. The following payoff table describes the company's decision situation.   The best decision for Kallie Inc. using the maximax decision criterion is to

Accepted Answer

A)  expand facilities. 
B)  acquire competitor. 
C)  subcontract production. 
D)  select high demand. 
A)  expand facilities. 
B)  acquire competitor. 
C)  subcontract production. 
D)  select high demand.

Question 16

The maximum value of perfect information to the decision maker is known as

Accepted Answer

A)  the expected value of perfect information. 
B)  the expected value of imperfect information. 
C)  the minimum of the minimax regret. 
D)  None of these answers is correct. 
A)  the expected value of perfect information. 
B)  the expected value of imperfect information. 
C)  the minimum of the minimax regret. 
D)  None of these answers is correct.

Question 17

Fairco, a family business, is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are three possible future outcomes for its product: (1) increasing demand; (2) stable demand; and (3) decreasing demand. The following payoff table describes the decision situation.   The best decision for Fairco using the maximin criterion would be to

Accepted Answer

A)  make the large investment. 
B)  make the medium investment. 
C)  make the small investment. 
D)  choose stable demand. 
A)  make the large investment. 
B)  make the medium investment. 
C)  make the small investment. 
D)  choose stable demand.

Question 18

A decision criterion that results in the maximum of the minimum payoffs is called a maximin criterion.

Accepted Answer

A) True 
 B)False

Question 19

Kallie Inc., a small parts manufacturer, has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand. The following payoff table describes the company's decision situation.   The best decision for Kallie Inc. using the equal likelihood criterion is to

Accepted Answer

A)  expand facilities.acquire competitor. 
B)  subcontract production. 
C)  select high demand. 
A)  expand facilities.acquire competitor. 
B)  subcontract production. 
C)  select high demand.

Question 20

The outcome of a decision is referred to as a payoff.

Accepted Answer

A) True 
 B)False

In a decision-making situation, the events that may occur in the future are known as states of nature.

The LaPlace criterion is a decision criterion in which each state of nature is weighted equally.

A decision criterion in which the decision payoffs are weighted by a coefficient of optimism is known as the Hurwicz criterion.

Which of the following techniques is the most widely used decision-making criterion under risk?

Decision analysis is a quantitative technique supporting decision-making with uncertainty.

What is decision analysis?

When probabilities can be assigned to the occurrence of states of nature in the future, the situation is referred to as

Quantitative methods are tools available to operations managers to help make a decision but not a recommendation.

Quantitative methods are tools available to operations managers to help make a decision or recommendation.

The maximum value of perfect information to the decision maker is known as

A decision criterion that results in the maximum of the minimum payoffs is called a maximin criterion.

The outcome of a decision is referred to as a payoff.

Introduction to Operations and Supply Chain Management

Quality Management

Statistical Process Control

Product Design

Service Design

Processes and Technology

Capacity and Facilities Design

Human Resources

Project Management

Supply Chain Management Strategy and Design

Global Supply Chain Procurement and Distribution

Forecasting

Inventory Management

Sales and Operations Planning

Resource Planning

Lean Systems

Operational Decision-Making Tools: Acceptance Sampling

Operational Decision-Making Tools: Facility Location Models

Operational Decision-Making Tools: Work Measurement

Operational Decison-Making Tools: Transportation and Transshipment Models

Operational Decision-Making Tools: Simulation

Operational Decision-Making Tools: Linear Programming

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Exam 17: Operational Decision-Making Tools: Decision Analysis

In a decision-making situation, the events that may occur in the future are known as states of nature.

The LaPlace criterion is a decision criterion in which each state of nature is weighted equally.

A decision criterion in which the decision payoffs are weighted by a coefficient of optimism is known as the Hurwicz criterion.

Which of the following techniques is the most widely used decision-making criterion under risk?

Decision analysis is a quantitative technique supporting decision-making with uncertainty.

What is decision analysis?

When probabilities can be assigned to the occurrence of states of nature in the future, the situation is referred to as

Quantitative methods are tools available to operations managers to help make a decision but not a recommendation.

Quantitative methods are tools available to operations managers to help make a decision or recommendation.

The maximum value of perfect information to the decision maker is known as

A decision criterion that results in the maximum of the minimum payoffs is called a maximin criterion.

The outcome of a decision is referred to as a payoff.

Introduction to Operations and Supply Chain Management

Quality Management

Statistical Process Control

Product Design

Service Design

Processes and Technology

Capacity and Facilities Design

Human Resources

Project Management

Supply Chain Management Strategy and Design

Global Supply Chain Procurement and Distribution

Forecasting

Inventory Management

Sales and Operations Planning

Resource Planning

Lean Systems

Operational Decision-Making Tools: Acceptance Sampling

Operational Decision-Making Tools: Facility Location Models

Operational Decision-Making Tools: Work Measurement

Operational Decison-Making Tools: Transportation and Transshipment Models

Operational Decision-Making Tools: Simulation

Operational Decision-Making Tools: Linear Programming

Filters