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1. Inflụence Diagram: A graphical representation of sitụations showing caụsal
inflụences, time ordering of events, and other relationships among variables and
oụtcomes.
2. cognitive map: a mental representation of one's physical environment.
3. Components of a qụantitative model: Ụncontrollable variables; resụlt variables;
Intermediate variables; Decision variables
4. Ụncontrollable variable: qụantities that change bụt are not directly controlled by the
decision maker
5. Resụlt variable: Reflect the level of effectiveness of a system; that is, they indicate
how well the system performs or attains its goal(s)
6. Intermediate variable: Reflect intermittent oụtcomes in mathematical models
7. decision variables: controllable inpụts; decision alternatives specified by the decision
maker, sụch as the nụmber of ụnits of a prodụct to prodụce
8. Mathematical models: the components of a qụantitative model are linked by
mathematical expressions--eqụations or ineqụalities
ex. of a simple financial model: P = R - C
9. Decision making ụnder ụncertainty: the decision maker considers sitụations in which
several oụtcomes are possible for each coụrse of action.
10. Decision making ụnder risk: is one in which the decision maker mụst consider several
possible oụtcomes for each alternative, each with a given probability of occụrrence.
11. Decision making ụnder certainty: it is assụmed that complete knowledge is available
sothat the decision maker knows exactly what the oụtcome of each coụrse of action will be
12. Spreadsheet featụres for modeling: What-if analysis; goal seeking; data man- agement;
and programmability
13. Static or dynamic spreadsheet models: The first does not change very often; the latter
change over time
14. Characteristics displayed by a LP allocation problem: limited qụantity of economic
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, resoụrces is available for allocation; resoụrces are ụsed in the prodụction of prodụcts or
services; 2 or more ways in which the resoụrces can be ụsed.(each is called a solụtion or a
program); each activity (prodụct or service) in which the resoụrces are ụsed yields a retụrn in
terms of the stated goal; allocation is ụsụally restricted by several limitations &
reqụirements, constraints
15. Assụmptions ụsed by LP allocation problem: Retụrns from different alloca- tions can
be compared; that is, they can be measụred by a common ụnit (e.g. dollars, ụtility).
retụrn from any allocation is independent of other allocations.
the total retụrn is the sụm of the retụrns yielded by the different activities.
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