BUSOBA 2321 FINAL UPDATED ACTUAL
Exam Questions and CORRECT Answers
Decision Analysis - CORRECT ANSWER - an analytic and systematic way to tackle
problems
Characteristics of good decisions - CORRECT ANSWER - - based on logic
- considers all possible alternatives
- examines all available information about the future
- sometimes result in unfavorable outcomes
Characteristics of bad decisions - CORRECT ANSWER - - does not consider alternatives
- does not use all available information
- sometimes yield favorable results
Five steps in decision analysis - CORRECT ANSWER - - define the problem
- list all possible alternatives
- identify possible outcomes for each decision alternative
- identify the payoff for each combination
- select a decision analysis modeling technique, apply the model, and make the decision
Types of decisions - CORRECT ANSWER - - strategic
- tactical
- operational
Strategic decisions - CORRECT ANSWER - take a long time and have significant
consequences for incorrect decisions
, Tactical decisions - CORRECT ANSWER - take a significant amount of time and can
have high consequence for incorrect decisions
Operational decisions - CORRECT ANSWER - take a limited amount of time but have
low consequences for incorrect decisions
Payoff table - CORRECT ANSWER - - decisions in rows
- states of nature in columns
- values can be positive (profit) or negative (loss)
Maximax Criteria (Optimistic Approach) - CORRECT ANSWER - Short-sided, Potential
High Risk, Best Among Best in Payoff Table
- create an additional column ("maximum")
- determine the maximum payoff for each decision (row)
- choose the maximum value in the "maximum" column
Maximin Criteria (Pessimistic Approach) - CORRECT ANSWER - Short Sided, Potential
High Opportunity Lost, Best Among Worst in Payoff Table
- create an additional column ("minimum")
- determine the minimum payoff for each decision (row)
- choose the maximum value in the "minimum" column
Regret Table - CORRECT ANSWER - - create an additional row ("maximum")
- determine the maximum payoff for each state of nature (column)
- subtract each payoff from the maximum of each state of nature (column)
Minimax Regret criteria (competitive behavior) - CORRECT ANSWER - Best Among
Worst in Regret Table
- create an additional column ("maximum")
Exam Questions and CORRECT Answers
Decision Analysis - CORRECT ANSWER - an analytic and systematic way to tackle
problems
Characteristics of good decisions - CORRECT ANSWER - - based on logic
- considers all possible alternatives
- examines all available information about the future
- sometimes result in unfavorable outcomes
Characteristics of bad decisions - CORRECT ANSWER - - does not consider alternatives
- does not use all available information
- sometimes yield favorable results
Five steps in decision analysis - CORRECT ANSWER - - define the problem
- list all possible alternatives
- identify possible outcomes for each decision alternative
- identify the payoff for each combination
- select a decision analysis modeling technique, apply the model, and make the decision
Types of decisions - CORRECT ANSWER - - strategic
- tactical
- operational
Strategic decisions - CORRECT ANSWER - take a long time and have significant
consequences for incorrect decisions
, Tactical decisions - CORRECT ANSWER - take a significant amount of time and can
have high consequence for incorrect decisions
Operational decisions - CORRECT ANSWER - take a limited amount of time but have
low consequences for incorrect decisions
Payoff table - CORRECT ANSWER - - decisions in rows
- states of nature in columns
- values can be positive (profit) or negative (loss)
Maximax Criteria (Optimistic Approach) - CORRECT ANSWER - Short-sided, Potential
High Risk, Best Among Best in Payoff Table
- create an additional column ("maximum")
- determine the maximum payoff for each decision (row)
- choose the maximum value in the "maximum" column
Maximin Criteria (Pessimistic Approach) - CORRECT ANSWER - Short Sided, Potential
High Opportunity Lost, Best Among Worst in Payoff Table
- create an additional column ("minimum")
- determine the minimum payoff for each decision (row)
- choose the maximum value in the "minimum" column
Regret Table - CORRECT ANSWER - - create an additional row ("maximum")
- determine the maximum payoff for each state of nature (column)
- subtract each payoff from the maximum of each state of nature (column)
Minimax Regret criteria (competitive behavior) - CORRECT ANSWER - Best Among
Worst in Regret Table
- create an additional column ("maximum")
