Question 1

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

Accepted Answer

A) True 
 B)False  True

Question 2

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 3

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 4

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 5

Consider the following payoff table with amounts in $ millions.   The column with investments lists mutually exclusive investment decisions.If you use the expected value criterion and you are indifferent between investments d2 and d3,then the probability that you assign to the state of nature S2 is __________.

Accepted Answer

A) at least 0.45 
B) at most 0.5 
C) 0)5 
D) at least 0.5 
A) at least 0.45 
B) at most 0.5 
C) 0)5 
D) at least 0.5

Question 6

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 Hurwicz decision criterion with a coefficient of optimism equal to 0.3 is to

Accepted Answer

A) expand facilities. 
B) acquire competitor. 
C) subcontract production. 
D) make no decision. 
A) expand facilities. 
B) acquire competitor. 
C) subcontract production. 
D) make no decision.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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.   The expected value of perfect information for Fairco is

Accepted Answer

A) $602,500. 
B) $540,000. 
C) $62,500. 
D) $25,000. 
A) $602,500. 
B) $540,000. 
C) $62,500. 
D) $25,000.

Question 9

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 10

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.   The expected value for the large investment decision is

Accepted Answer

A) $700,000. 
B) $540,000. 
C) $330,000. 
D) $165,000. 
A) $700,000. 
B) $540,000. 
C) $330,000. 
D) $165,000.

Question 11

A payoff table is a quantitative technique supporting decision-making under uncertainty.

Accepted Answer

A) True 
 B)False

Question 12

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 expand facilities 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 13

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

Accepted Answer

A) True 
 B)False

Question 14

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.

Question 15

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 16

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

Accepted Answer

A) True 
 B)False

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 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 18

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 regret that is associated with the decision to acquire competitor when demand is low is

Accepted Answer

A) $0. 
B) $525,000. 
C) $1,250,000. 
D) $1,275,000. 
A) $0. 
B) $525,000. 
C) $1,250,000. 
D) $1,275,000.

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 value of the Hurwicz decision criterion for subcontract production when the coefficient of optimism is 0.30 is

Accepted Answer

A) $92,500. 
B) $182,500. 
C) $250,000. 
D) $275,000. 
A) $92,500. 
B) $182,500. 
C) $250,000. 
D) $275,000.

Question 20

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 of perfect information for Kallie Inc.is

Accepted Answer

A) $1,210,000. 
B) $700,000. 
C) $510,000. 
D) $312,500. 
A) $1,210,000. 
B) $700,000. 
C) $510,000. 
D) $312,500.

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

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

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

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

A payoff table is a quantitative technique supporting decision-making under uncertainty.

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

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

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

Introduction to Operations and Supply Chain Management

Quality Management

Statistical Process Control

Supplement Operational Decision-Making Tools: Acceptance Sampling

Product Design

Service Design

Processes and Technology

Capacity and Facilities

Supplement Operational Decision-Making Tools: Facility Location Models

Human Resources

Supplement Operational Decision-Making Tools: Work Measurement

Project Management

Supply Chain Management Strategy and Design

Global Supply Chain Procurement and Distribution

Supplement Operational Decision-Making Tools: Transportation and Transshipment Models

Forecasting

Inventory Management

Supplement Operational Decision-Making Tools: Simulation

Sales and Operations Planning

Supplement Operational Decision-Making Tools: Linear Programming

Enterprise Resource Planning

Lean Systems

Scheduling

Filters

Exam 2: Supplement Operational Decision-Making Tools: Decision Analysis

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

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

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

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

A payoff table is a quantitative technique supporting decision-making under uncertainty.

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

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

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

Introduction to Operations and Supply Chain Management

Quality Management

Statistical Process Control

Supplement Operational Decision-Making Tools: Acceptance Sampling

Product Design

Service Design

Processes and Technology

Capacity and Facilities

Supplement Operational Decision-Making Tools: Facility Location Models

Human Resources

Supplement Operational Decision-Making Tools: Work Measurement

Project Management

Supply Chain Management Strategy and Design

Global Supply Chain Procurement and Distribution

Supplement Operational Decision-Making Tools: Transportation and Transshipment Models

Forecasting

Inventory Management

Supplement Operational Decision-Making Tools: Simulation

Sales and Operations Planning

Supplement Operational Decision-Making Tools: Linear Programming

Enterprise Resource Planning

Lean Systems

Scheduling

Filters