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Engineering Economy, 5/e

Leland Blank, Texas A&M University
Anthony Tarquin, University of Texas - El Paso

Formalized Sensitivity Analysis and Expected Value Decisions

Matching Quiz

Select the correct answers on the left to fill in the blanks on the right. There are more answers than questions, therefore, some of the items on the right will remain unused. When you have completed the quiz, click the SUBMIT button at the bottom.


1				The first step in performing a sensitivity analysis is to select the ____________ of interest that are most likely to vary from the estimate.


2				If three-estimate sensitivity analysis is used, an example for which the pessimistic estimate is probably the lowest value is ______________ .


3				If the sensitivity of several parameters is shown on one graph, the scale of the x-axis should be ________________ from the most likely estimated value.


4				The expected value can be used for two purposes; one is to evaluate the expected economic viability of a _________________ .


5				Because an engineering alternative is implemented only once, the expected value of its PW is actually a _____________ of the long-run average.


6				In a decision tree graph, the possible alternatives at each stage are indicated as branches from the _____________.

Answer choices for questions 1 through 6

A)	Point estimate
B)	Parameter(s)
C)	MARR
D)	Absolute amounts
E)	Measure of worth
F)	Chance cause
G)	Percentage deviation
H)	Final outcome probability
I)	Alternative life
J)	Decision node
K)	First cost
L)	Replacement machine
M)	Probability node
N)	Fully-formulated alternative
O)	Increment deviation, eg, +5 units

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