Quantitative - Test #1 (Non-Math Q's)
Optimistic decision makers tend to ____________.
magnify favorable outcomes and ignore bad outcomes
____________ is interchangeable with quantitative analysis.
management science
Quantitative analysis is typically associated with the use of ____________.
mathematical models
A pessimistic decision making criterion is ____________.
maximin
If a rational person selects an alternative that does not maximize the EMV, we would expect that this alternative ____________.
maximizes the expected utility
A(n) ____________ is a representation of reality or a real-life situation.
model
Probabilities for all the possible values of a discrete random variable ____________.
must sum to 1
If only one event may occur on any one trial, then the events are said to be ____________.
mutually exclusive
The classical method of determining probability is ____________.
objective probability
Which of the following is not one of the steps in the quantitative analysis approach?
observing a hypothesis
Expected monetary value (EMV) is ____________.
the average or expected monetary outcome of a decision if it can be repeated a large number of times
The expected value of a probability distribution is ____________.
the average value of the distribution
Quantitative analysis is ____________.
a logical, rational, and scientific approach to decision making
If two events are mutually exclusive, then the probability of the intersection of these two events will equal ____________.
0
In a standard normal distribution, the mean is equal to ____________.
0
If P(A) = 0.4 and P(B) = 0.5 and P(A and B) = 0.2, then P(B|A) =
0.50
If P(A) = 0.4 and P(B) = 0.5 and P(A and B) = 0.2, then P(A or B) =
0.7
The total area under the curve for any continuous distribution must equal ____________.
1
In the normal distribution, 95.45% of the population lies within ____________.
2 standard deviations of the mean
If a normal distribution has a mean of 200 and a standard deviation of 10, 99.7% of the population falls within what range of values?
170-230
What makes the difference between good decisions and bad decisions?
A good decision considers all alternatives, a good decision is based on logic, a good decision applies quantitative approaches, and a good decision considers all available data.
Which of the following is the fourth step of the "Six Steps in Decision Making"?
List the payoff or profit of each combination of alternatives and outcomes.
Which of the following is true about the expected value of perfect information?
It is calculated as expected value with perfect information minus maximum EMV.
If P(A) = 0.3, P(B) = 0.2, P(A and B) = 0.0, what can be said about events A and B?
They are mutually exclusive.
Properties of the normal distribution include ____________.
a continuous bell-shaped distribution
When does P(A|B) = P(A)?
When A and B are statistically independent.
The probability of two or more independent events occuring is the ____________.
joint probability
A decision tree is preferable to a decision table when ____________.
a number of sequential decisions are to be made
An input (such as variable cost per unit or fixed cost) for a model is an example of ____________.
a parameter
Decision trees are particularly useful when ____________.
a sequence of decisions must be made
A deterministic model is one in which ____________.
all parameters used in the model are known with complete certainty
On a decision tree, at each state-of-nature node, ____________.
an EMV is calculated
In decision theory terminology, a course of action or a strategy that may be chosen by a decision maker is called ____________.
an alternative
Sensitivity analysis is most often associated with which step of the quantitative analysis approach?
analyzing the results
If the sale of ice cream and pizza are independent, then as ice cream sales decrease by 60 percent during the winter months, pizza sales will ____________.
be unrelated
The point at which the total revenue equals total cost (meaning zero profit) is called the ____________.
break-even point
"The probability of event B, given that event A has occurred" is known as a ________ probability.
conditional
Decision variables are ____________.
controllable
An analytic and systematic approach to the study of decision making is referred to as ____________.
decision theory
A controllable variable is also called a ____________.
decision variable
A measurable quantity that may vary, or is subject to change, and can be controlled is known as a(n) ____________.
decision variable
The term "algorithm" ____________.
describes a series of steps or procedures to be repeated and was named after Algorismus who was a 19th-century Arabic mathematician
In using the criterion of realism (Hurwicz criterion), the coefficient of realism ____________.
describes the degree of optimism of the decision maker
Which of the following techniques involves the study and consolidation of historical data for a business and an industry?
descriptive analytics
Pessimistic decision makers tend to ____________.
discount favorable outcomes
The minimum expected opportunity loss is ____________.
equal to the expected value of perfect information
The EVSI ____________.
equals the EMV with sample information assuming no cost for the information minus the EMV without sample information
Which of the following is a decision-making criterion that is used for decision making under risk?
expected monetary value criterion
A measure of central tendency is ____________.
expected value
Subjective probability assessments depend on ____________.
experience and judgment
The condition of improper data yielding misleading results is referred to as ____________.
garbage in, garbage out
A measurable quantity that is inherent in the problem is called a(n) ____________.
parameter
Another name for a decision table is a ____________.
payoff table
Frederick Winslow Taylor ____________.
pioneered the principles of scientific management
Which of the following is an example of a discrete distribution?
poisson distribution
Bayes' theorem is used to revise probabilities. The new (revised) probabilites are called ____________.
posterior probabilities
New probabilities that have been found using Bayes' theorem are called ____________.
posterior probabilities
Which of the following categories of business analytics involves the use of optimization models?
prescriptive
Which of the following techniques involves the use of optimization methods to provide new and better ways to operate based on specific business objectives?
prescriptive analytics
A ________ is a numerical statement about the likelihood that an event will occur.
probability
In analyzing a problem, you should normally study ____________.
qualititative aspects and quantitative aspects
The break-even point is an example of a ____________.
quantitative analysis model
Which of the following is not considered a criteria for decision making under uncertainty?
random selection
If probabilities are available to the decision maker, then the decision-making environment is called ____________.
risk
In decision making under ________, there are several possible outcomes for each alternative, and the decision maker knows the probability of occurrence of each outcome.
risk
The three decision-making environments are decision making under ____________.
risk, certainty, and uncertainty
An analysis to determine how much a solution would change if there were changes in the model or the input data is called ____________.
sensitivity or postoptimality analysis
The square root of the variance is the ____________.
standard deviation
In decision theory, probabilities are associated with ____________.
states of nature
A conditional probability P(B|A) is equal to its marginal probability P(B) if ____________.
statistical independence exists
The most that a person should pay for perfect information is ____________.
the EVPI
If two events are mutually exclusive, then ____________.
the joint probability is equal to 0, their probabilities can be added, if one occurs, the other cannot occur, and they may also be collectively exhaustive
The minimum EOL criterion will always result in the same decision as ____________.
the maximum EMV criterion
In assessing utility values, ____________.
the worst outcome is given a utility of 0
Trying various approaches and picking the one that results in the best decision is called ____________.
trial-and-error method
In decision making under ________, there are several possible outcomes for each alternative, and the decision maker does not know the probabilities of the various outcomes.
uncertainty
A(n) ____________ model is one that is accurate and correctly represents the problem or system under investigation.
valid
To compute the variance of a discrete random variable, you need to know the ____________.
variable's possible values, expected value of the variable, and the probability of each possible value of the variable
On a decision tree, once the tree has been drawn and the payoffs and probabilities have been placed on the tree, the analysis (computing EMVs and selecting the best alternative) ____________.
working backward (starting on the right and moving to the left)
The efficiency of sample information ____________.
would be 100% if the sample information were perfect
