Question 1

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 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 equal likelihood 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 3

What is decision analysis?

Accepted Answer

Decision analysis is a set of quantitati

Question 4

When probabilities are assigned to states of nature the situation is referred to as decision-making under uncertainty.

Accepted Answer

A) True 
 B)False

Question 5

The most widely used decision-making criterion for situations with risk is expected value.

Accepted Answer

A) True 
 B)False

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 minimax regret 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 7

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 medium investment decision is

Accepted Answer

A) $600,000. 
B) $540,000. 
C) $330,000. 
D) $165,000. 
A) $600,000. 
B) $540,000. 
C) $330,000. 
D) $165,000.

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 following payoff table describes the decision situation.   The best decision for Fairco using the maximax criterion would be to

Accepted Answer

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

Question 9

Consider the following payoff table with amounts in $ millions.   If you are using Hurwicz and decide d3,then the coefficient of optimism,α,is ______.

Accepted Answer

A) undetermined;there is not enough information to find the answer 
B) unfeasible;there is no value of α that would make you choose d3 
C) larger than 0.85 
D) less than 0.83 
A) undetermined;there is not enough information to find the answer 
B) unfeasible;there is no value of α that would make you choose d3 
C) larger than 0.85 
D) less than 0.83

Question 10

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 11

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 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.   The expected value for the small investment decision is

Accepted Answer

A) $540,000. 
B) $400,000. 
C) $330,000. 
D) $165,000. 
A) $540,000. 
B) $400,000. 
C) $330,000. 
D) $165,000.

Question 13

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 equal likelihood criterion would be to

Accepted Answer

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

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 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 15

A sequential decision tree is a graphical method for analyzing decision situations that require a sequence of decisions over time.

Accepted Answer

A) True 
 B)False

Question 16

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 minimax regret decision criterion would be to

Accepted Answer

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

Question 17

Consider the following payoff table with amounts in $ millions.   If you are using the maximin criterion and decide d4,then x is ______.

Accepted Answer

A) at most −1 
B) less than −1 
C) any value 
D) cannot be determined without knowing the value of y 
A) at most −1 
B) less than −1 
C) any value 
D) cannot be determined without knowing the value of y

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,with probabilities of 0.6 and 0.4,respectively.The following payoff table describes the company's decision situation.   The expected value for the subcontract production 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 19

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 choose investment d2,then the probability that you assign to the state of nature S1 is __________.

Accepted Answer

A) more than 0.25 and less than 0.67 
B) more than 0.33 and less than 0.67 
C) more than 0.25 and less than 0.5 
D) more than 0.33 and less than 0.5 
A) more than 0.25 and less than 0.67 
B) more than 0.33 and less than 0.67 
C) more than 0.25 and less than 0.5 
D) more than 0.33 and less than 0.5

Question 20

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

Accepted Answer

A) True 
 B)False

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

What is decision analysis?

When probabilities are assigned to states of nature the situation is referred to as decision-making under uncertainty.

The most widely used decision-making criterion for situations with risk is expected value.

Consider the following payoff table with amounts in $ millions. If you are using Hurwicz and decide d₃,then the coefficient of optimism,α,is ______.

A sequential decision tree is a graphical method for analyzing decision situations that require a sequence of decisions over time.

Consider the following payoff table with amounts in $ millions. If you are using the maximin criterion and decide d₄,then x is ______.

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 choose investment d₂,then the probability that you assign to the state of nature S₁ is __________.

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

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

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

What is decision analysis?

When probabilities are assigned to states of nature the situation is referred to as decision-making under uncertainty.

The most widely used decision-making criterion for situations with risk is expected value.

Consider the following payoff table with amounts in $ millions. If you are using Hurwicz and decide d3,then the coefficient of optimism,α,is ______.

A sequential decision tree is a graphical method for analyzing decision situations that require a sequence of decisions over time.

Consider the following payoff table with amounts in $ millions. If you are using the maximin criterion and decide d4,then x is ______.

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 choose investment d2,then the probability that you assign to the state of nature S1 is __________.

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

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

Consider the following payoff table with amounts in $ millions. If you are using Hurwicz and decide d₃,then the coefficient of optimism,α,is ______.

Consider the following payoff table with amounts in $ millions. If you are using the maximin criterion and decide d₄,then x is ______.

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 choose investment d₂,then the probability that you assign to the state of nature S₁ is __________.