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| 1 | |
A key reason for poor decisions is failure to identify the problem. |
| | A) | True |
| | B) | False |
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| 2 | |
Optimization for an organization may mean suboptimization for some departments. |
| | A) | True |
| | B) | False |
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| 3 | |
A decision environment of uncertainty has probabilities assigned to each state of nature. |
| | A) | True |
| | B) | False |
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| 4 | |
If a decision maker is using a maximax approach, the decision maker would choose the alternative that has the best possible payoff. |
| | A) | True |
| | B) | False |
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| 5 | |
If a decision maker is using a maximin approach, the decision maker would choose the alternative that has the best of the worst possible payoffs. |
| | A) | True |
| | B) | False |
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| 6 | |
A decision maker who uses the minimax regret approach is focusing on avoiding the "If only I had chosen…" effect. |
| | A) | True |
| | B) | False |
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| 7 | |
Expected monetary value is the criterion that is useful for decision making under uncertainty. |
| | A) | True |
| | B) | False |
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| 8 | |
The expected monetary value can be computed using a decision tree diagram |
| | A) | True |
| | B) | False |
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| 9 | |
Sensitivity analysis is sometimes used to determine the expected value of perfect information. |
| | A) | True |
| | B) | False |
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| 10 | |
The range of probability for which an alternative has the best expected value can be determined using a decision tree. |
| | A) | True |
| | B) | False |
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| 11 | |
The EVPI is equal to the expected financial value of the regrets for the optimal decision under risk. |
| | A) | True |
| | B) | False |
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| 12 | |
Which approach would be used by an optimistic (or desperate) decision maker? |
| | A) | maximin |
| | B) | maximax |
| | C) | minimax regret |
| | D) | EMV |
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| 13 | |
Which approach would be used by a pessimistic decision maker? |
| | A) | maximin |
| | B) | maximax |
| | C) | minimax regret |
| | D) | EMV |
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| 14 | |
Which approach requires having probabilities for the states of nature? |
| | A) | maximin |
| | B) | maximax |
| | C) | minimax regret |
| | D) | EMV |
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| 15 | |
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073525251/886182/ch5s_14.JPG','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]>
The maximax choice would be: |
| | A) | Buy |
| | B) | Rent |
| | C) | Lease |
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| 16 | |
<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073525251/886182/ch5s_14.JPG','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]> The maximin choice would be: |
| | A) | Buy |
| | B) | Rent |
| | C) | Lease |
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| 17 | |
<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073525251/886182/ch5s_14.JPG','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]> The minimax regret choice would be: |
| | A) | Buy |
| | B) | Rent |
| | C) | Lease |
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| 18 | |
<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073525251/886182/ch5s_14.JPG','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]> If the probability of Business Grows is 0.40, which alternative would be chosen using EMV? |
| | A) | Buy |
| | B) | Rent |
| | C) | Lease |
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| 19 | |
<![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073525251/886182/ch5s_14.JPG','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (9.0K)</a>]]> If the probability of Business Grows is 0.40, what is the EVPI? |
| | A) | 57 |
| | B) | 44 |
| | C) | 42 |
| | D) | 36 |
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