OPS301 - Chp A - Decision Making Tools

8 September 2022
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question
Analytic decision making is based on logic and considers all available data and possible alternatives.
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True.
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A state of nature is an occurrence or a situation over which the decision maker has little or no control.
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True.
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If a decision maker can assign probabilities of occurrences to the states of‚Äč nature, then the‚Äč decision-making environment is Decision Making under Uncertainty.
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False.
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The expected monetary value of a decision alternative is the sum of all possible payoffs from the‚Äč alternative, each weighted by the probability of that payoff occurring.
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True.
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In a decision‚Äč tree, the expected monetary values are computed by working from right to left.
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True.
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Which of the following is NOT considered a step in the‚Äč decision-making process?
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Minimize costs whenever possible.
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In terms of decision‚Äč theory, an occurrence or situation over which the decision maker has no control is called‚Äč a(n):
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State of Nature.
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What is a tabular presentation that shows the outcome for each decision alternative under the various possible states of nature‚Äč called?
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Payoff Table.
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What decision criterion would be used by an optimistic decision maker solving a problem under conditions of‚Äč uncertainty?
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Maximax.
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A decision maker who uses the maximin criterion when solving a problem under conditions of uncertainty‚Äč is:
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A pessimist.
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Expected monetary value is most appropriate for problem solving that takes‚Äč place:
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Under conditions of risk.
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What is the difference between the expected payoff under perfect information and the maximum expected payoff under‚Äč risk?
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Expected value of perfect information.
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The likelihood that a decision maker will ever receive a payoff precisely equal to the EMV when making any one decision‚Äč is:
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Low‚Äč (near 0%).
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A decision tree is‚Äč a(n):
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Graphical representation of alternatives and states of nature.
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A problem that involves a sequence of‚Äč decisions:
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Can be better analyzed with a decision tree than by a decision table.
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The first‚Äč step, and a key‚Äč element, in the‚Äč decision-making process is‚Äč to:
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Clearly define the problem.