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- 1. Multiple Choice
Which of the following is not considered a step in the decision-making process?
Clearly identify the problem
Develop objectives.
Evaluate alternatives.
Minimize costs whenever possible.
- 2. Multiple Choice
The first step, and a key element, in the decision-making process is to
consult a specialist
clearly define the problem
develop objectives
monitor the results
- 3. Multiple Choice
In terms of decision theory, an occurrence or situation over which the decision maker has no
control is called a(n)
decision under uncertainty
decision tree
state of nature
alternative
- 4. Multiple Choice
tabular presentation that shows the outcome for each decision alternative under the various
possible states of nature is called a(n)
isoquant table
payback period matrix
payoff table
feasible region
- 5. Multiple Choice
The decision criterion that would be used by an optimistic decision maker solving a problem under
conditions of uncertainty would be the
expected monetary value criterion
equally likely criterion
maximax criterion
maximin criterion
- 6. Multiple Choice
A decision maker who uses the maximin criterion when solving a problem under conditions of uncertainty is
an optimist
a pessimist
an economist
an optometrist
- 7. Multiple Choice
Expected monetary value is most appropriate for problem solving that takes place
when conditions are average
when all states of nature are equally likely
under conditions of uncertainty
under conditions of risk
- 8. Multiple Choice
A retailer is deciding how many of a certain product to stock. The historical probability distribution
of sales for this product is 0 units, 0.2; 1 unit, 0.3; 2 units, 0.4, and 3 units, 0.1. The product costs
$8 per unit and sells for $25 per unit. The conditional value for the decision alternative "Stock 3"
and state of nature "Sell 1" is
1.4 units
$1 profit
$25 profit
$-8 profit
- 9. Multiple Choice
Decision trees
give more accurate solutions than decision tables
give less accurate solutions than decision tables
are especially powerful when a sequence of decisions must be made
are rarely used because one needs specialized software to graph them
- 10. Multiple Choice
The expected value of perfect information is the same as the expected value with perfect information.
True
False
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