Question 1

The expected value of perfect information (EVPI)is the:

Accepted Answer

A) payoff for a decision made under perfect information. 
B) payoff under minimum risk. 
C) average expected payoff. 
D) difference between the payoff under perfect information and the payoff under risk. 
E) greater of EVwPI and Maximum EMV. 
A) payoff for a decision made under perfect information. 
B) payoff under minimum risk. 
C) average expected payoff. 
D) difference between the payoff under perfect information and the payoff under risk. 
E) greater of EVwPI and Maximum EMV.

Question 2

________ is the criterion for decision making under uncertainty that finds an alternative that maximizes the minimum outcome.

Accepted Answer

The answer of ________ is the criterion for decision making...

Question 3

A branch of a decision tree that is less favorable than other available options may be ________.

Accepted Answer

The answer of A branch of a decision tree that...

Question 4

What is the difference between the expected payoff under perfect information and the maximum expected payoff under risk?

Accepted Answer

A) expected monetary value 
B) economic order quantity 
C) expected value of perfect information 
D) PERT 
E) expected monetary payoff 
A) expected monetary value 
B) economic order quantity 
C) expected value of perfect information 
D) PERT 
E) expected monetary payoff

Question 5

If a decision maker is a pessimist,what decision-making criterion is appropriate? Why?

Accepted Answer

Maximin assumes that the worst

Question 6

What decision criterion would be used by an optimistic decision maker solving a problem under conditions of uncertainty?

Accepted Answer

A) expected monetary value 
B) equally likely 
C) maximax 
D) maximin 
E) minimin 
A) expected monetary value 
B) equally likely 
C) maximax 
D) maximin 
E) minimin

Question 7

Big data refers to numbers larger than 1,600.

Accepted Answer

A) True 
 B)False

Question 8

What limitation(s)do decision trees overcome compared to decision tables?

Accepted Answer

Decision trees work

Question 9

What is a tabular presentation that shows the outcome for each decision alternative under the various possible states of nature called?

Accepted Answer

A) isoquant table 
B) payback period matrix 
C) payoff table 
D) feasible region 
E) decision tree 
A) isoquant table 
B) payback period matrix 
C) payoff table 
D) feasible region 
E) decision tree

Question 10

What is the EMV for Option 2 in the following decision table?

Accepted Answer

A) 50 
B) 100 
C) 170 
D) 200 
E) 350 
A) 50 
B) 100 
C) 170 
D) 200 
E) 350

Question 11

In a decision tree,the expected monetary values are computed by working from right to left.

Accepted Answer

A) True 
 B)False

Question 12

What is a conditional value?

Accepted Answer

It is an outcome of

Question 13

There are three equally likely states of nature (High,Medium,and Low demand).If the large factory will post profits of $50,000,$25,000,and - $10,000 under these states of nature,respectively,what is the EMV of the factory?

Accepted Answer

A) $50,000 
B) $25,000 
C) $28,333.33 
D) $21,666.67 
E) $65,000 
A) $50,000 
B) $25,000 
C) $28,333.33 
D) $21,666.67 
E) $65,000

Question 14

________ is the difference between the payoff under perfect information and the payoff under risk.

Accepted Answer

Expected v

Question 15

A toy manufacturer makes stuffed kittens and puppies that have relatively lifelike motions.There are three different mechanisms which can be installed in these "pets." These toys will sell for the same price regardless of the mechanism installed,but each mechanism has its own variable cost and setup cost.Profit,therefore,is dependent upon the choice of mechanism and upon the level of demand.The manufacturer has in hand a forecast of demand that suggests a 0.2 probability of light demand,a 0.45 probability of moderate demand,and a probability of 0.35 of heavy demand.Payoffs for each mechanism-demand combination appear in the table below.
   Construct the appropriate decision tree to analyze this problem.Use standard symbols for the tree.Analyze the tree to select the optimal decision for the manufacturer.

Accepted Answer

@#IMG-DLM& The best

Question 16

A local business owner is a bit uncertain of the demand forecast,and he is timidly approaching the capacity decision for a business he is about to open.Here's how he describes the decisions that confront him over the next two years.
"First,I have to choose between building a large plant initially and building a small one that has room to expand.Or I could rent now and decide whether to build next year.That one,too,could be the large version or the small.If I build small,then after one year,I can review how good business was,and decide whether to expand.If I build large,there is no further option to enlarge."
Do not concern yourself with probabilities or payoff values.Simply draw the tree that illustrates the manager's decision alternatives and the chance events that go along with them.Use standard symbols for decision tree construction,and label all parts of your diagram carefully.To simplify,assume that business in the first year,and in the second,can be only "good" or "bad."

Accepted Answer

The answer of A local business owner is a bit...

Question 17

The expected value with perfect information assumes that all states of nature are equally likely.

Accepted Answer

A) True 
 B)False

Question 18

A problem that involves a sequence of decisions:

Accepted Answer

A) cannot be analyzed with expected monetary value. 
B) can be better analyzed with a decision tree than by a decision table. 
C) must be analyzed in the same order that the decisions are made. 
D) cannot be analyzed with decision tree software. 
E) can only be analyzed using decision making under certainty. 
A) cannot be analyzed with expected monetary value. 
B) can be better analyzed with a decision tree than by a decision table. 
C) must be analyzed in the same order that the decisions are made. 
D) cannot be analyzed with decision tree software. 
E) can only be analyzed using decision making under certainty.

Question 19

A decision maker using the maximin criterion on the problem below would choose Alternative ________ because the maximum of the row minimums is ________.

Accepted Answer

A) A;55 
B) B;30 
C) C;70 
D) D;140 
E) D;10 
A) A;55 
B) B;30 
C) C;70 
D) D;140 
E) D;10

Question 20

What is the EMV for Option 1 in the following decision table?

Accepted Answer

A) 200 
B) 240 
C) 250 
D) 260 
E) 300 
A) 200 
B) 240 
C) 250 
D) 260 
E) 300

Exam 22: Decision-Making Tools

The expected value of perfect information (EVPI)is the:

________ is the criterion for decision making under uncertainty that finds an alternative that maximizes the minimum outcome.

A branch of a decision tree that is less favorable than other available options may be ________.

What is the difference between the expected payoff under perfect information and the maximum expected payoff under risk?

If a decision maker is a pessimist,what decision-making criterion is appropriate? Why?

What decision criterion would be used by an optimistic decision maker solving a problem under conditions of uncertainty?

Big data refers to numbers larger than 1,600.

What limitation(s)do decision trees overcome compared to decision tables?

What is a tabular presentation that shows the outcome for each decision alternative under the various possible states of nature called?

What is the EMV for Option 2 in the following decision table?

In a decision tree,the expected monetary values are computed by working from right to left.

What is a conditional value?

There are three equally likely states of nature (High,Medium,and Low demand).If the large factory will post profits of $50,000,$25,000,and - $10,000 under these states of nature,respectively,what is the EMV of the factory?

________ is the difference between the payoff under perfect information and the payoff under risk.

The expected value with perfect information assumes that all states of nature are equally likely.

A problem that involves a sequence of decisions:

A decision maker using the maximin criterion on the problem below would choose Alternative ________ because the maximum of the row minimums is ________.

What is the EMV for Option 1 in the following decision table?

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Process Strategy

Location Strategies

Layout Strategies

Human Resources,job Design,and Work Measurement

Supply Chain Management

Inventory Management

Aggregate Planning and Sop

Material Requirements Planning Mrpand ERP

Short-Term Scheduling

Lean Operations

Maintenance and Reliability

Sustainability in the Supply Chain

Statistical Process Control

Capacity and Constraint Management

Supply Chain Management Analytics

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

Filters

A decision maker using the maximin criterion on the problem below would choose Alternative because the maximum of the row minimums is .