BUS406 Tma Solutions
1. Using the information that follows, determine the optimal solution using the Hurwicz Criterion. Maximums: N500, N700, N400. Minimums: -75, -60, -50.
N 175
—>> N 320
N342
N177
2. The particular preference structure of the decision maker is known as _______
—>> Value System
Alternative
Evaluation Criteria
Choice
3. Which of the following is a compromise between the maximax (optimistic) and maximin (Pessimistic) decision criteria.
Bayes’ Criterion
Savage Criterion
Maximin Criterion
—>> Hurwicz Criterion
4. The following are payoffs on maximum column, N25,000, N39,000, N49,000, N25,001. Determine the Optimum solution using the maximax criterion.
N25,000.
N39,000.
—>> N49,000.
N25,001.
5. Which of the following can also be referred to as criterion of Pessimism?
Bayes’ Criterion
Savage Criterion
—>> Maximin Criterion
Hurwicz Criterion
6. A decision condition where the decision maker only has sufficient information to allow him assign probabilities to the various states of nature is known as _______
Decision under condition of Certainty
—>> Decision under condition of Risk
Decision under condition of Uncertainty
Decision under Volatile condition.
7. _____ is a pictorial method of showing a sequence of inter-related decisions and outcomes.
—>> A Decision Tree
A Gant Chart
A Venn Diagram
A Graph
8. Which of the following represents the correct formula for determining optimum solution using the criterion of realism?
CRi = a (Min in Rowi) + (1 – a) (Min in Rowi)
CRi = a (Max in Rowi) + (a-1) (Min in Rowi)
CRi = a (Max in Rowi) + (a-1) (Max in Rowi)
—>> CRi = a (Max in Rowi) + (1 – a) (Min in Rowi)
9. The following represent a list of possible benefits of the decision tree. Identify the odd one out.
They assist in the clarification of complex decisions making situations that involve risk.
Decision trees help in the quantification of situations.
Better basis for rational decision making are provided by decision trees.
—>> It becomes cumbersome to use/draw when decision options/states of nature are many.
10. Which of the following is a criterion for making decision under the situation of risk?
Laplace Criterion
—>> Expected Value of Perfect Information (EVPI)
Maximin Criterion
Game theory
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