QUESTION 16

Which one of the following statements about process view and resources view of organizations is correct?

	A.	Resources view is dynamic.
	B.	Process view is static.
	C.	These two views are conflicted.
	D.	These two views are complementary.

QUESTION 17

For the process to be capable of meeting design specification, the process capability index must be

	A.	equal to or greater than one
	B.	equal to or greater than zero
	C.	less than zero
	D.	less than one

QUESTION 18

A company is considering making an investment in its manufacturing operation. Three decisions are under consideration: (1) a large investment; (2) a medium investment; and (3) a small investment. The business believes that there are four possible future outcomes for its product: (1)significant increasing demand; (2)moderate increasing demand; (3)moderate decreasing demand; and significant decreasing demand. The company believes that the probability for increasing, stable and decreasing product demand are 0.4, 0.3,0.2 and 0.1, respectively. The following payoff table describes the decision situation.

Decision	Significant Decreasing Demand (0.1)	Moderate Decreasing Demand (0.2)	Moderate Increasing Demand (0.3)	Significant Increasing Demand (0.4)
Large Investment	-$550,000	$410,000	$560,000	$1,000,000
Medium Investment	$30,000	$350,000	$490,000	$500,000
Small Investment	$25,000	$125,000	$200,000	$255,000

The best decision for the company using the Maximin decision criterion would be to

	A.	make Large Investment.
	B.	select Decreasing Demand.
	C.	make Small Investment.
	D.	make Medium Investment.

QUESTION 19

From the data above, the expected value for the Small Investment decision is

	A.	$189,500
	B.	$167,500
	C.	$87,500
	D.	$420,000

QUESTION 20

From the data above, thevalue for Large Investment using the Hurwicz criterion with a coefficient of optimism equal to 0.6 is

	A.	$70,000
	B.	-$166,000
	C.	$380,000
	D.	$82,400