1.Within decisionmaking theory, what is a relationship between objectives and variables? A. a match B. a model C. a path D. a link 2.What is an occurrence or a situation over which the decision maker has little or no control? A. chance event B. alternative C. state of nature D. unactionable event 3.What decision tree symbol represents a stateofnature node? A. trapezoid B. square C. circle D. triangle 4.What decision tree symbol represents a decision node? A. triangle B. circle C. star D. square 5.What are listed down the left side of a decision table? A. alternatives B. outcome probabilities C. states of nature D. conditional values 6.What is an alternative name for a decision table? A. outcome table B. payoff table C. decisionn matrix D. decision grid Skill Builder Question Help Instructor created question 7.Given the following conditional value table: Definitions: Maximax: A criterion that finds an alternative that maximizes the maximum outcome (appropriate for profit) Maximin: A criterion that finds and alternative that maximizes the minimum outcome (appropriate for profit) Equally Likely: A criterion that assigns equal probability to each state of nature. a) Using the decision making under uncertainty with the criterion of Maximax: The appropriate 'Alternative' decision will be The value of the return under this decision is $ b) Using the decision making under uncertainty with the criterion of Maximin: The appropriate 'Alternative' decision will be The value of the return under this decision is $ c) Using the decision making under uncertainty with the criterion of Equally Likely: The appropriate 'Alternative' decision will be The value of the return under this decision is $ 8. Jeffrey Helm owns a health and fitness center called BulkUp in Harrisburg. He is considering adding more floor space to meet increasing demand. He will either add no floor space (N), a moderate area of floor space (M), a large area of floor space (L), or an area of floor space that doubles the size of the facility (D). Demand will either stay fixed, increase slightly, or increase greatly. The following are the changes in BulkUp's annual profits under each combination of expansion level and demand change level: Definitions: Maximin: A criterion that finds and alternative that maximizes the minimum outcome (appropriate for profit) Jeffrey is risk averse and wishes to use the maximin criterion. a) Select all the correct applicable choices that are applicable for the problem that Jeffrey is facing: A.Floor space No, Moderate, Large and Double are the States of Nature B.Neither of the above C.Fixed, Slight Increase and Major Increase are the States of Nature D.Fixed, Slight Increase and Major Increase are the Decision Alternatives b) Using the decision making under uncertainty with the criterion of Maximin: The appropriate Expansion Level decision will be The value of the return under this decision is $ 9.Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers believe that there is a probability of 0.40 that the ATR Co. will come out with a competitive product. If Weiss adds an assembly line for the product and ATR Co. does not follow with a competitive product, Weiss's expected profit is $60,000? if Weiss adds an assembly line and ATR follows suit, Weiss still expects $10,000 profit. If Weiss adds a new plant addition and ATR does not produce a competitive product, Weiss expects a profit of $600,000; if ATR does compete for this market, Weiss expects a loss of $100,000. a) Expected value for the Add Assembly Line option = $ (enter your answer as a whole number). Expected value for the option = $ (enter your answer as a whole number). The alternative addition ('assembly line' or 'new plant') that provides Weiss the greatest expected monetary value is The value of the return under this decision is $ (enter your answer as a whole number) b) The expected value of perfect information (EVPI) for Weiss = $ whole number). (enter your answer as a 10.Jerry Bildery's factory is considering three approaches for meeting an expected increase in demand. These three approaches are increasing capacity, using overtime, and buying more equipment. Demand will increase either slightly (S), moderately (M), or greatly (G). The profits for each approach under each possible scenario are as follows: Definition: Equally Likely: A criterion that assigns equal probability to each state of nature. Since the goal is to maximize, and Jerry is riskneutral, he decides to use the Equally Likely decision criterion to make the decision as to which approach to use. According to this criterion, the appropriate Approach will be to . The EMV of this decision is $ (enter your answer as a whole number). 11.Consider the following decision table, which Joe Blackburn has developed for Vanderbilt Enterprises: Definition:EMV: The EMV for an alternative is the sum of all possible payoffs from the alternative, each weighted by the probability of that payoff occurring The Decision Alternative that provides Blackburn the greatest expected monetary value is . The EMV for this decision is $ (enter your answer as a whole number). 12.Deborah Hollwager, a concessionaire for the Amway Center in Orlando, has developed a table of conditional values for the various alternatives (stocking decision) and states of nature (size of crowd): Definitions:EMV: The EMV for an alternative is the sum of all possible payoffs from the alternative, each weighted by the probability of that payoff occurring. EVPI: The difference between the payoff under perfect information and the payoff under risk. Probabilities associated with the states of nature are 0.25 for a large crowd, 0.50 for an average crowd, and 0.25 for a small crowd. a) The alternative that provides Deborah the greatest expected monetary value EMV is . The EMV for this decision is $ (enter your answer as a whole number). b) For Deborah, the expected value of perfect information EVPI = $ number). (enter your answer as a whole 13. Given the following conditional value table, determine the appropriate decision under uncertainty using maximax, maximin, equally likely methods. a) Using the maximax method, the appropriate Alternative is the with a value of return of $ (enter your response as a whole number). b) Using the maximin method, the appropriate Alternative is to with a value of return of $ , , (enter your response as a whole number). c) Using the equally likely method, the appropriate Alternative is the with a value of return of $ , (enter your response as a whole number). 14.Given the following conditional value table, determine the appropriate decision assuming that each state of nature has an equal likelihood of occurring: The appropriate Alternative is to use the , which has an EMV = $ response to the nearest whole number). 15. Which decisionmaking rule is known as a "pessimistic" decision criterion? A.minimin B.maximax C.maximin D.minimax 16.How much money should a firm be willing to spend to obtain a perfect market forecast? (round your A.EVPI EMV B.EVPI Maximum EMV C.EVwPI EVPI D.EVwPI Maximum EMV 17.Deborah Kellogg buys Breathalyzer test sets for the Denver Police Department. The quality of the test sets from her two suppliers is indicated in the following table: For example, the probability of getting a batch of tests that are 1% defective from Winter Park Technology is 0.65. Because Kellogg orders 15,000 tests per order, this would mean that there is a 0.65 probability of getting 150 defective tests out of the 15,000 tests if Winter Park Technology is used to fill the order. A defective Breathalyzer test set can be repaired for $0.40. Although the quality of the test sets of the second supplier, Dayton Enterprises, is lower, it will sell an order of 15,000 test sets for $30 less than Winter Park. a) The correct decision tree (with EMVs rounded to the nearest whole number) for Deborah is shown in Figure . b) To maximize the return, Deborah's decision should be to us the supplier. The EMV of selected alternative for Deborah = $ (enter your answer as a whole number and include a minus sign if necessary). 18.Joseph Biggs owns his own ice cream truck and lives 30 miles from a Florida beach resort. The sale of his products is highly dependent on his location and on the weather. At the resort, his profit will be $160 per day in fair weather, $20 per day in bad weather. At home, his profit will be $70 in fair weather and $45 in bad weather. Assume that on any particular day, the weather service suggests a 30% chance of foul weather. a) The correct decision tree for Joseph is shown in Figure . b) To maximize the return, for selling ice cream, Joseph's decision should be to sell from his .Expected monetary value for Joseph = (enter your answer as a whole number). 19.Which of the following is the 4th step in analyzing problems with decision trees? A.Estimate payoffs for each possible combination of decision alternatives and states of nature. B.Structure or draw the decision tree. C.Solve the problem by computing the EMV for each stateofnature node. D.Assign probabilities to the states of nature. \f\f\f\f\f\f\f\f\f