QBA exam 1000

State of Nature

A payoff matrix is a table that summarizes the final outcome (for regret) for each decision alternative under each possible

Models providing decisions for the decision maker

Although modeling provides valuable insight to decision makers, decision making remains a difficult task. Which of the following is not a primary cause for this difficulty?

Decision making under risk

Business decision models can be categorized as

Ensure selection of good outcomes

Decision analysis supports all but which of the following goals?

are multiple alternatives

Decision models are applicable when there

May be reached when the model accounts for unforeseeable circumstances

In decision analysis, good decisions

Often plays a role in determining whether good or bad outcomes occur

In decision making, luck

The probabilities are always obtained form historical data

Probabilistic decision rules can be used if the states of nature in a decision problem can be assigned probabilities that represent their likelihood of occurrence. Which of the following statements is not true regarding the probabilities employed?

Historical Data

States of nature are assigned probabilities through the use of

largest expected monetary value

The EMV decision rule selects the decision alternative with the

Criteria

The ___ in a decision problem represents factors that are important to the decision maker

Regret

The amount of opportunity lost in making a decision is called?

Non-probabilisitic category

The category of decision rules that contains the maximax decision rule is the

Maximax decision rule

The decision rule that determines the maximum payoff for each alternative and then selects the alternative associated with the largest payoff is the

Maximin decision rule

The decision rule that determines the minimum payoff for each alternative and selects the alternative associated with the largest minimum payoff is the

Minimax regret decision rule

The decision rule that selects the alternative associated with the smallest maximum opportunity loss is the

Maximizes the minimum return

The maximin approach to decision making

Worst possible outcome of a decision

Under the maximin rule, a decision maker hedges against the

Maximin decision rule

What decision rule pessimistically assumes that nature will always be "against us" regardless of what decision we make?

Maximax decision rule

Which decision rule optimistically assumes that nature will always be "on our side" regardless of what decision we make?

Help individuals make good decisions

Which of the following is a goal of decision analysis?

The maximax method ignores potentially large losses

Which of the following statements is true regarding the maximax method?

Payoff matrix

Which of the following summarizes the final outcome for each decision alternative?

The probability of possible future events is unknown

Which of these is a characteristic of decision making under uncertainty

Alternative

a(n) is a course of action intended to solve a problem?

EOL

expected regret it also called