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