BUSOBA 2321 EXAM QUESTIONS WITH
CORRECT SOLUTIONS||ALREADY
GRADED||100% GUARANTEED
PASS||<<NEWEST VERSION>>
EVPI means - ANSWER ✓ expected value of perfect info (aka cost of perfect info)
- it's the vertical distance between the EMV Max and the EVwPI (given a specific
probability)
- amount by which perfect info would increase expected payoff
EVPI calculation - ANSWER ✓ EVwPI-EMV Max, where EMV Max is the
equation of the line that has the highest solution at the given probability
- simplify these lines then plug in the probability to solve for p
square - decision tree - ANSWER ✓ decision, no calculation
circle - decision tree - ANSWER ✓ EMV, state of nature, calculation
strategic decision - ANSWER ✓ - take long time
- significant consequences for incorrect decision
(ex: mergers and acquisitions, buying a house)
tactical decision - ANSWER ✓ - take significant amount of time
- high consequences for incorrect decision
(forecasting product production, buying a car)
operational decision - ANSWER ✓ - take limited amount of time
- low consequences for an incorrect decision
(ex: assigning employees to jobs, purchasing lunch)
pure strategy - ANSWER ✓ strategy not based on probability ( MAXIMIN,
MINIMAX Regret)
EOL means - ANSWER ✓ expected opportunity loss
, - best decision will be the least costly
when "n" states of nature p= - ANSWER ✓ 1/n
EOL calculation - ANSWER ✓ SUM (regret of outcome * probability)
- repeat for each option (row), choose smallest
EMV calculation - ANSWER ✓ SUM (payoff of outcome * probability)
- repeat for each option (row), choose largest
What are the assumptions of a linear model - ANSWER ✓ 1) certainty
2) proportionality
3) additivity
4) divisibility
What are the properties of a linear model - ANSWER ✓ 1) represents a business
problem
2) max/min some quantity
3) limitations - constraints
4) must be alternatives available
LHS has - ANSWER ✓ decision variables
RHS has - ANSWER ✓ constraints
Steps for linear programming - ANSWER ✓ 1) define decision variables
2) make objective function (what are we max/min)
3) write out constraints
4) graph constraints (find x and y int)
5) find the optimal solution (plug in corner points to objective function)
linear programming: - ANSWER ✓ continuous decision variables with the
objective function and all constraints linear
non linear programming - ANSWER ✓ 1 constraint is non linear, decision
variables are continuous
CORRECT SOLUTIONS||ALREADY
GRADED||100% GUARANTEED
PASS||<<NEWEST VERSION>>
EVPI means - ANSWER ✓ expected value of perfect info (aka cost of perfect info)
- it's the vertical distance between the EMV Max and the EVwPI (given a specific
probability)
- amount by which perfect info would increase expected payoff
EVPI calculation - ANSWER ✓ EVwPI-EMV Max, where EMV Max is the
equation of the line that has the highest solution at the given probability
- simplify these lines then plug in the probability to solve for p
square - decision tree - ANSWER ✓ decision, no calculation
circle - decision tree - ANSWER ✓ EMV, state of nature, calculation
strategic decision - ANSWER ✓ - take long time
- significant consequences for incorrect decision
(ex: mergers and acquisitions, buying a house)
tactical decision - ANSWER ✓ - take significant amount of time
- high consequences for incorrect decision
(forecasting product production, buying a car)
operational decision - ANSWER ✓ - take limited amount of time
- low consequences for an incorrect decision
(ex: assigning employees to jobs, purchasing lunch)
pure strategy - ANSWER ✓ strategy not based on probability ( MAXIMIN,
MINIMAX Regret)
EOL means - ANSWER ✓ expected opportunity loss
, - best decision will be the least costly
when "n" states of nature p= - ANSWER ✓ 1/n
EOL calculation - ANSWER ✓ SUM (regret of outcome * probability)
- repeat for each option (row), choose smallest
EMV calculation - ANSWER ✓ SUM (payoff of outcome * probability)
- repeat for each option (row), choose largest
What are the assumptions of a linear model - ANSWER ✓ 1) certainty
2) proportionality
3) additivity
4) divisibility
What are the properties of a linear model - ANSWER ✓ 1) represents a business
problem
2) max/min some quantity
3) limitations - constraints
4) must be alternatives available
LHS has - ANSWER ✓ decision variables
RHS has - ANSWER ✓ constraints
Steps for linear programming - ANSWER ✓ 1) define decision variables
2) make objective function (what are we max/min)
3) write out constraints
4) graph constraints (find x and y int)
5) find the optimal solution (plug in corner points to objective function)
linear programming: - ANSWER ✓ continuous decision variables with the
objective function and all constraints linear
non linear programming - ANSWER ✓ 1 constraint is non linear, decision
variables are continuous
