Question 1

What is the expected value of selecting script #2?

Accepted Answer

A) $15,000,000 
B) $9,060,000 
C) $8,400,000 
D) $7,200,000 
E) $6,000,000 
A) $15,000,000 
B) $9,060,000 
C) $8,400,000 
D) $7,200,000 
E) $6,000,000

Question 2

An advantage of decision trees compared to payoff tables is that they permit us to analyze situations involving sequential decisions.

Accepted Answer

A) True 
 B)False

Question 3

The term sensitivity analysis is most closely associated with:

Accepted Answer

A) maximax 
B) maximin 
C) decision-making under risk 
D) minimax regret 
E) Laplace criterion 
A) maximax 
B) maximin 
C) decision-making under risk 
D) minimax regret 
E) Laplace criterion

Question 4

If she feels there is a 30% chance that demand will be high, what are the expected monthly profits for the outlet she will decide to lease?

Accepted Answer

A) $1,600 
B) $1,100 
C) $1,000 
D) $900 
E) $500 
A) $1,600 
B) $1,100 
C) $1,000 
D) $900 
E) $500

Question 5

Which of the following is not an approach for decision-making under uncertainty?

Accepted Answer

A) decision trees 
B) maximin 
C) maximax 
D) minimax regret 
E) Laplace 
A) decision trees 
B) maximin 
C) maximax 
D) minimax regret 
E) Laplace

Question 6

The term opportunity loss or regret is most closely associated with:

Accepted Answer

A) minimax regret 
B) maximax 
C) maximin 
D) expected monetary value 
E) Laplace 
A) minimax regret 
B) maximax 
C) maximin 
D) expected monetary value 
E) Laplace

Question 7

The expected value approach applies to decision-making under uncertainty.

Accepted Answer

A) True 
 B)False

Question 8

If she uses the Laplace criterion, what size outlet will she decide to lease?

Accepted Answer

A) small 
B) Medium 
C) large 
D) either small or Medium 
E) either medium or large 
A) small 
B) Medium 
C) large 
D) either small or Medium 
E) either medium or large

Question 9

If she feels that there is a 60% chance that the new cable network will be successful, what is her expected cost (per thousand "hits") under certainty?

Accepted Answer

A) $3.40 
B) $4.60 
C) $8.00 
D) $9.00 
E) $10.00 
A) $3.40 
B) $4.60 
C) $8.00 
D) $9.00 
E) $10.00

Question 10

-If somehow you find out for certain that state of nature #4 is going to occur, which alternative will you select?

Accepted Answer

The answer of  
-If somehow you find out for...

Question 11

If she uses the maximin criterion, what size outlet will she decide to lease?

Accepted Answer

A) small 
B) Medium 
C) large 
D) either small or Medium 
E) either medium or large 
A) small 
B) Medium 
C) large 
D) either small or Medium 
E) either medium or large

Question 12

The maximin strategy would be:

Accepted Answer

A) buy 
B) lease 
C) rent 
D) high 
E) low 
A) buy 
B) lease 
C) rent 
D) high 
E) low

Question 13

If he uses the Laplace criterion, which size bus will he decide to purchase?

Accepted Answer

A) small 
B) Medium 
C) large 
D) either small or Medium 
E) either medium or large 
A) small 
B) Medium 
C) large 
D) either small or Medium 
E) either medium or large

Question 14

If he feels the chances of declining, stable, and growing population trends are 40%, 50%, and 10%, respectively, what is his expected value of perfect information?

Accepted Answer

A) $187,000 
B) $132,000 
C) $123,000 
D) $65,000 
E) $55,000 
A) $187,000 
B) $132,000 
C) $123,000 
D) $65,000 
E) $55,000

Question 15

Which of the following characterizes decision-making under uncertainty?

Accepted Answer

A) Decision-makers must rely on probabilities in assessing outcomes. 
B) The likelihood of possible future events is unknown. 
C) Relevant parameters have known values. 
D) Certain parameters have probabilistic outcomes. 
E) none of the above 
A) Decision-makers must rely on probabilities in assessing outcomes. 
B) The likelihood of possible future events is unknown. 
C) Relevant parameters have known values. 
D) Certain parameters have probabilistic outcomes. 
E) none of the above

Question 16

If she feels that there is a 60% chance that the new cable network will be successful, what is her expected cost (per thousand "hits") for the strategy she will select?

Accepted Answer

A) $3.40 
B) $4.60 
C) $8.00 
D) $9.00 
E) $10.00 
A) $3.40 
B) $4.60 
C) $8.00 
D) $9.00 
E) $10.00

Question 17

The maximin strategy would be:

Accepted Answer

A) small 
B) Medium 
C) med.-large 
D) large 
E) ex-large 
A) small 
B) Medium 
C) med.-large 
D) large 
E) ex-large

Question 18

Expected monetary value gives the long-run average payoff if a large number of identical decisions could be made.

Accepted Answer

A) True 
 B)False

Question 19

The maximin approach involves choosing the alternative with the highest payoff.

Accepted Answer

A) True 
 B)False

Question 20

The expected value approach is used for decision-making under risk.

Accepted Answer

A) True 
 B)False

Exam 21: Extension 5: Decision Theory

What is the expected value of selecting script #2?

An advantage of decision trees compared to payoff tables is that they permit us to analyze situations involving sequential decisions.

The term sensitivity analysis is most closely associated with:

If she feels there is a 30% chance that demand will be high, what are the expected monthly profits for the outlet she will decide to lease?

Which of the following is not an approach for decision-making under uncertainty?

The term opportunity loss or regret is most closely associated with:

The expected value approach applies to decision-making under uncertainty.

If she uses the Laplace criterion, what size outlet will she decide to lease?

If she feels that there is a 60% chance that the new cable network will be successful, what is her expected cost (per thousand "hits") under certainty?

-If somehow you find out for certain that state of nature #4 is going to occur, which alternative will you select?

If she uses the maximin criterion, what size outlet will she decide to lease?

The maximin strategy would be:

If he uses the Laplace criterion, which size bus will he decide to purchase?

If he feels the chances of declining, stable, and growing population trends are 40%, 50%, and 10%, respectively, what is his expected value of perfect information?

Which of the following characterizes decision-making under uncertainty?

If she feels that there is a 60% chance that the new cable network will be successful, what is her expected cost (per thousand "hits") for the strategy she will select?

The maximin strategy would be:

Expected monetary value gives the long-run average payoff if a large number of identical decisions could be made.

The maximin approach involves choosing the alternative with the highest payoff.

The expected value approach is used for decision-making under risk.

Introduction to Operations Management

Competitiveness, Strategy, and Productivity

Forecasting

Product and Service Design

Strategic Capacity Planning for Products and Services

Process Selection and Facility Layout

Work Design and Measurement

Location Planning and Analysis

Management of Quality

Quality Control

Aggregate Planning and Master Scheduling

MRP and ERP

Inventory Management

Jit and Lean Operations

Supply Chain Management

Scheduling

Project Management

Management of Waiting Lines

Linear Programming

Extension 4: Reliability

Extension 7: Learning Curves

Extension 8: The Transportation Model

Extension 10: Acceptance Sampling

Extension 14: Maintenance

Filters