Test 3 - Multiple Choice - Problem solving

A decision maker's worst option has an expected value of $1,000, and her best option has an expected value of $3,000. With perfect information, the expected value would be $5,000. The decision maker has discovered a firm that will, for a fee of $1,000, make her position-risk free. How much better off will her firm be if she takes this firm up on its offer?

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A decision maker's worst option has an expected value of $1,000, and her best option has an expected value of $3,000. With perfect information, the expected value would be $5,000. What is the expected value of perfect information?

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A local bagel shop produces two products: bagels (B) and croissants (C). Each bagel requires 6 ounces of flour, 1 gram of yeast, and 2 tablespoons of sugar. A croissant requires 3 ounces of flour, 1 gram of yeast, and 4 tablespoons of sugar. The company has 6,600 ounces of flour, 1,400 grams of yeast, and 4,800 tablespoons of sugar available for today's production run. Bagel profits are 20 cents each, and croissant profits are 30 cents each. For the production combination of 600 bagels and 800 croissants, which resource is slack (not fully used)?

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A local bagel shop produces two products: bagels (B) and croissants (C). Each bagel requires 6 ounces of flour, 1 gram of yeast, and 2 tablespoons of sugar. A croissant requires 3 ounces of flour, 1 gram of yeast, and 4 tablespoons of sugar. The company has 6,600 ounces of flour, 1,400 grams of yeast, and 4,800 tablespoons of sugar available for today's production run. Bagel profits are 20 cents each, and croissant profits are 30 cents each. What are optimal profits for today's production run?

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A local bagel shop produces two products: bagels (B) and croissants (C). Each bagel requires 6 ounces of flour, 1 gram of yeast, and 2 tablespoons of sugar. A croissant requires 3 ounces of flour, 1 gram of yeast, and 4 tablespoons of sugar. The company has 6,600 ounces of flour, 1,400 grams of yeast, and 4,800 tablespoons of sugar available for today's production run. Bagel profits are 20 cents each, and croissant profits are 30 cents each. Which of the following is not a feasible production combination?

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An analyst, having solved a linear programming problem, determined that he had 10 more units of resource Q than previously believed. Upon modifying his program, he observed that the list of basic variables did not change, but the value of the objective function increased by $30. This means that resource Q's shadow price was:

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Consider the following decision scenario: -----------State of Nature -----------High-----Low Buy------$80*------ 0 Rent------ 70------- 30 Lease -----30------- 50 *PV for profits ($000) If P(high) is .60, the choice for maximum expected value would be:

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Consider the following decision scenario: -----------State of Nature -----------High-----Low Buy------$80*------ 0 Rent------ 70------- 30 Lease -----30------- 50 *PV for profits ($000) The maximax strategy would be:

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Consider the following decision scenario: -----------State of Nature -----------High-----Low Buy------$80*------ 0 Rent------ 70------- 30 Lease -----30------- 50 *PV for profits ($000) The maximin strategy would be:

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Consider the following decision scenario: -----------State of Nature -----------High-----Low Buy------$80*------ 0 Rent------ 70------- 30 Lease -----30------- 50 *PV for profits ($000) The minimax regret strategy would be:

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For a linear programming problem with the following constraints, which point is in the feasible solution space assuming this is a maximization problem? 14x+6y≤42 x−y≤3

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One local hospital has just enough space and funds currently available to start either a cancer or heart research lab. If administration decides on the cancer lab, there is a 20 percent chance of getting $100,000 in outside funding from the American Cancer Society next year, and an 80 percent chance of getting nothing. If the cancer research lab is funded the first year, no additional outside funding will be available the second year. However, if it is not funded the first year, then management estimates the chances are 50 percent it will get $100,000 the following year, and 50 percent that it will get nothing again. If, however, the hospital's management decides to go with the heart lab, then there is a 50 percent chance of getting $50,000 in outside funding from the American Heart Association the first year and a 50 percent chance of getting nothing. If the heart lab is funded the first year, management estimates a 40 percent chance of getting another $50,000 and a 60 percent chance of getting nothing additional the second year. If it is not funded the first year, then management estimates a 60 percent chance for getting $50,000 and a 40 percent chance for getting nothing in the following year. For both the cancer and heart research labs, no further possible funding is anticipated beyond the first two years. What would be the total payoff if the heart lab were funded in both the first and second years?

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Option A has a payoff of $10,000 in environment 1 and $20,000 in environment 2. Option B has a payoff of $5,000 in environment 1 and $27,500 in environment 2. Once the probability of environment 1 exceeds ________, option A becomes the better choice.

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Which of the following choices constitutes a simultaneous solution to these equations? 3x+2y=6 6x+3y=12

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