Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

An example of a conditional value would be the payoff from selecting a particular alternative when a particular state of nature occurs.

Accepted Answer

A) True 
 B)False

Question 3

A square node on a decision tree infers that

Accepted Answer

A) the node splits into various states of nature,of which only one will occur. 
B) there are several alternatives available. 
C) the manager must choose an alternative. 
D) there are several alternatives available and the manager must choose an alternative. 
E) the node splits into various states of nature,of which only one will occur,there are several alternatives available and the manager must choose an alternative. 
A) the node splits into various states of nature,of which only one will occur. 
B) there are several alternatives available. 
C) the manager must choose an alternative. 
D) there are several alternatives available and the manager must choose an alternative. 
E) the node splits into various states of nature,of which only one will occur,there are several alternatives available and the manager must choose an alternative.

Question 4

The first step,and a key element,in the decision-making process is to

Accepted Answer

A) consult a specialist. 
B) clearly define the problem. 
C) develop objectives. 
D) monitor the results. 
E) select the best alternative. 
A) consult a specialist. 
B) clearly define the problem. 
C) develop objectives. 
D) monitor the results. 
E) select the best alternative.

Question 5

If a decision maker can assign probabilities of occurrences to the states of nature,then the decision-making environment is Decision Making under Uncertainty.

Accepted Answer

A) True 
 B)False

Question 6

Earl Shell owns his own Sno-Cone business and lives 30 miles from a beach resort.The sale of Sno-Cones is highly dependent upon his location and upon the weather.At the resort,he will profit $120 per day in fair weather,$10 per day in bad weather.At home,he will profit $70 in fair weather,$55 in bad weather.Assume that on any particular day,the weather service suggests a 40% chance of foul weather.
a.Construct Earl's decision tree.
b.What decision is recommended by the expected value criterion?

Accepted Answer

Resort has

Question 7

The expected monetary value of a decision alternative is the sum of all possible payoffs from the alternative,each weighted by the probability of that payoff occurring.

Accepted Answer

A) True 
 B)False

Question 8

In the context of decision-making,define alternative.

Accepted Answer

An alternative is a

Question 9

In terms of decision theory,an occurrence or situation over which the decision maker has no control is called a(n)

Accepted Answer

A) decision under uncertainty. 
B) decision tree. 
C) state of nature. 
D) alternative. 
E) probable state. 
A) decision under uncertainty. 
B) decision tree. 
C) state of nature. 
D) alternative. 
E) probable state.

Question 10

A(n)________ is a graphical means of analyzing decision alternatives and states of nature.

Accepted Answer

The answer of A(n)________ is a graphical means of analyzing...

Question 11

A do-it-yourself homeowner is installing a new toilet.While installing the toilet he must decide on what kind of connecting pipe he will install to the water supply.There are two available options,one that has a shut-off valve in case of a leak and a cheaper one without the shut-off valve.Suppose that the shut-off valve pipe costs an extra ten dollars and that the homeowner must buy one of the two.
a.Draw a decision tree for this scenario,labeling the cost of a leak as X and the chance of a leak as P.
b.If the chance of a leak causing household damage is 1%,at what $ amount of household damage is the owner neutral on which pipe to buy?
c.If the cost of a leak would be $10,000 what is the maximum % chance to leak at which the homeowner would prefer to buy the cheaper pipe?
d.If the cost of a leak is $1,000 and the chance to flood .1% which pipe should the homeowner buy?

Accepted Answer

a- @#IMG-DLM& b- EMV of part B for the cheap pipe

Question 12

The likelihood that a decision maker will ever receive a payoff precisely equal to the EMV when making any one decision is

Accepted Answer

A) low (near 0%). 
B) high (near 100%). 
C) dependent upon the number of alternatives. 
D) dependent upon the number of states of nature. 
E) 50%. 
A) low (near 0%). 
B) high (near 100%). 
C) dependent upon the number of alternatives. 
D) dependent upon the number of states of nature. 
E) 50%.

Question 13

A decision maker who uses the maximin criterion when solving a problem under conditions of uncertainty is

Accepted Answer

A) an optimist. 
B) a pessimist. 
C) an economist. 
D) an optometrist. 
E) making a serious mistake;maximin is not appropriate for conditions of uncertainty. 
A) an optimist. 
B) a pessimist. 
C) an economist. 
D) an optometrist. 
E) making a serious mistake;maximin is not appropriate for conditions of uncertainty.

Question 14

The campus bookstore sells highlighters that it purchases by the case.Cost per case,including shipping and handling,is $200.Revenue per case is $350.Any cases unsold will be discounted and sold at $175.The bookstore has estimated that demand will follow the pattern below
   a.Construct the bookstore's payoff table.
b.How many cases should the bookstore stock in order to maximize profit?
c.How would your answer differ if the clearance price were not $175 per case but $225 per case? (It is not necessary to re-solve the problem to answer this. )

Accepted Answer

(a)The Excel OM table is below.
(b)The h

Question 15

Analytic decision making is based on logic and considers all available data and possible alternatives.

Accepted Answer

A) True 
 B)False

Question 16

The following decision tree has how many state of nature nodes?

Accepted Answer

A) 0 
B) 1 
C) 2 
D) 3 
E) 4 
A) 0 
B) 1 
C) 2 
D) 3 
E) 4

Question 17

What is the expected value with perfect information in the following decision table?

Accepted Answer

A) 50 
B) 200 
C) 260 
D) 300 
E) 350 
A) 50 
B) 200 
C) 260 
D) 300 
E) 350

Question 18

The square symbol used in drawing a decision trees represents a ________ node.

Accepted Answer

The answer of The square symbol used in drawing a...

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

In the context of decision-making,define state of nature.

Accepted Answer

A state of nature is an occurr

Exam 21: Decision-Making Tools

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

An example of a conditional value would be the payoff from selecting a particular alternative when a particular state of nature occurs.

A square node on a decision tree infers that

The first step,and a key element,in the decision-making process is to

If a decision maker can assign probabilities of occurrences to the states of nature,then the decision-making environment is Decision Making under Uncertainty.

The expected monetary value of a decision alternative is the sum of all possible payoffs from the alternative,each weighted by the probability of that payoff occurring.

In the context of decision-making,define alternative.

In terms of decision theory,an occurrence or situation over which the decision maker has no control is called a(n)

A(n)________ is a graphical means of analyzing decision alternatives and states of nature.

The likelihood that a decision maker will ever receive a payoff precisely equal to the EMV when making any one decision is

A decision maker who uses the maximin criterion when solving a problem under conditions of uncertainty is

Analytic decision making is based on logic and considers all available data and possible alternatives.

The following decision tree has how many state of nature nodes?

What is the expected value with perfect information in the following decision table?

The square symbol used in drawing a decision trees represents a ________ node.

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

In the context of decision-making,define state of nature.

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Sustainability in the Supply Chain and Design of Goods and Services

Managing Quality

Process Strategy and Sustainability

Location Strategies

Layout Strategies

Human Resources,job Design,and Work Measurement

Supply-Chain Management

Inventory Management

Aggregate Planning

Material Requirements Planning Mrpand ERP

Short-Term Scheduling

Jit and Lean Operations

Maintenance and Reliability

Statistical Process Control

Capacity and Constraint Management

Supply Chain Management Analytics

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

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