D S Exam 235, ISM

0.125

Football teams toss a coin to see who will get their choice of kicking or receiving to begin a game. The probability that given team will win the toss three games in a row is ______

The average of the two middle observations

How is the median defined if the number of observations is even?

80

How much should the farmer be willing to pay for an additional worker?

32

If A and B are any two events with P(A)= 0.8 and P( B/A)= 0.4, then the joint probability of A and B is:

Independent

If P(A) = P(A/B), then events A and B are said to be:

positive

If all monetary values in a decision problem are costs, then it is customary to list them as ________ values in a cost table:

0.0

If events A and B are mutually exclusive, then the probability of both events occurring simultaneously is equal to:

decisions; uncertainty

In a single-stage decision tree problem, all _________ are made first and then all ___________ is resolved

conditional on

In decision trees, probabilities are listed on probability branches. These probabilities are ______________ events that have already been observed

from left to right

In decision trees, time proceeds:

discrete vs continuous., positive (or nonnegative) vs. unrestricted, symmetric vs skewed, bounded vs unbounded

In general, important characteristics of probability distributions include the following distinctions:

possible payoffs

In general, the expected monetary values (EMV) represents _______________________

nonnegative

In most cases, when solving linear programming problems, we want the decision variables to be:

Mode

Most frequently occurring value:

-0.5

Suppose a company sells two different products, x and y, for net profits of $5 per unit and $10 per unit, respectively. The slope of the line representing the objective function is:

Generally not the appropriate model

The deterministic (non-simulation) approach, using best guesses for the uncertain inputs, is:

expected value

The mean of the probability distribution is also called the

Expected value

The mean of the probability distribution is also called the:

EMV

The preferred criterion in decision making is

an objective function coefficient, resource level, and adding simple upper or lower bounds on a decision variable

The sensitivity analysis provides information about which of the following:

a folding back procedure

The solution procedure that was introduced in the book for decision trees is called:

decision nodes, probability nodes, and end nodes

There are three types of nodes that are used with the decision trees. They are:

when a binding constraint is parallel to a level curve

When do alternate optimal solutions occur in LP models

a normal distribution

When n is reasonably large and p isn't too close to 0 or 1, the binomial distribution can be well approximated by which of the following distributions?

The numbers are probabilistically dependent

Which of the following statements are false regarding the numbers generated by the RAND function in Excel?

strategy region chart

Which of these sensitivity analysis charts is most useful in determining whether the optimal decision changes over the range of the input variable?

risk adverse

With regard to decision making, most individuals are:

plays no role in determining the feasible region of the problem

a redundant constraint is one which

optimal solution

a set of values of the decision variables that satisfy all constraints and yields the best objective function value is:

folding-back procedure

calculation method for decision tree; starting at the right, take EMVs at probability nodes, maximums of EMVs at decision nodes

nodes

decision trees are composed of _______ (circles, squares, triangles)

branches

decision trees are composed of _______ (lines)

Decision Tree

enables a decision maker to view all important aspects of the problem at once

type 2 error

error committed when null hypothesis is false but is not rejected

type 1 error

error committed when null hypothesis is true but is rejected

exhaustive events

events where at least one of them must occur

independent events

events where knowledge that one of them has occurred is of no value in assessing the probability that the other will occur

mutually exclusive

events where only one of them can occur

multiplication rule

formula for the probability that two events both occur

infeasible

if there is no way to simultaneously satisfy all the constraints in an LP model the problem is said to be:

kurtosis

measure of "fatness" of tails of a distribution (relative to normal distribution)

perfect information

resolves all probabilities before any decisions are to be made

empirical rules

rules that specify approximate percentage observations within one, two, or three standard deviations of mean for symmetric, bell-shaped distributions

sample information

the non-perfect information that we might get, say from a test or an experiment

Expected monetary value (EMV)

the weighted average of possible monetary values, weighted by their probabilities

EMV (Expected Monetary Value)

the weighted average of the possible payoffs for this decision, weighted by the probabilities of the outcomes. (Impact x Probability)

True

true or false? A discrete distribution is useful for many situations, either when the uncertain quantity is not continuous (the number of televisions demanded, for example) or when we want a discrete approximation to a continuous variable

True

true or false? A probability distribution is continuous if its possible values fall along some continuum

True

true or false? Age, height, and weight are examples of numerical data

True

true or false? For each possible decision and each possible outcome, the payoff table lists the monetary value earned by an organization, where a positive value represents a profit and a negative value represents a loss

True

true or false? If P(A and B)= 1, then A and B must be collectively exhaustive.

True

true or false? In a multistage decision problem, decisions and outcomes alternate. That is, a decision maker makes a decision, then some uncertainty is resolved, then the decision maker makes a second decision, then some further uncertainty is resolved, and so on

True

true or false? In decision trees, any branches leading into a node (from the left) have already occured

True

true or false? In making decisions, we choose the decision with the largest expected monetary value

True

true or false? It is often useful to perform sensitivity analysis to see how, or if, the optimal solution to a linear programming problem changes as we change one or more model inputs

True

true or false? Spreadsheet simulation modeling is quite similar to the other modeling applications in that it begins with input variables and then relates these with appropriate Excel formulas to produce output variables of interest

True

true or false? The feasible region in a graphical solution of a linear programming problem will appear as some type of polygon, with lines forming all sides

True

true or false? The flaw of averages is the reason deterministic models can be very misleading

True

true or false? The number of car insurance policy holders is an example of a discrete numerical variable

True

true or false? When determining the most appropriate input probability distribution in a simulation model, first select the most appropriate family, and the select the most appropriate member of that family

True

true or false? When you use the expected monetary value (EMV) criterion, you are not using all of the information that is shown in the risk profiles of alternatives since you are only comparing the means

True

true or false? decision trees are composed of nodes (circles, squares, triangles) and branches (lines)

True

true or false? in decision trees, an end node ( a triangle) indicates that the problem is completed; that is, all decisions have been made, all uncertainty has been resolved, and all payoffs/costs have been incurred

risk profile

A __________ lists the full probability distribution

shadow price

A _______________ indicates how much a company would pay for more of a scarce resource

an optimal solution at some extreme point

A linear programming problem with a feasible region will have:

no value can be less than A or greater than B

A probability distribution is bounded if there are values A and B such that:

Cross-sectional

A sample of a population taken at one particular point in time is categorized as:

histograms

Amount of bin counts for a numerical variable; shows shape of the distribution

Range

As a measure of variability, what is defined as the maximum value minus the minimum value?