Question 1

A company's decision to introduce a new product into the market is an example of ______.
A)decision under certainty
B)decision under uncertainty
C)decision under state of nature
D)decision under risk

Accepted Answer

Introducing a new product into the market involves uncertainties regarding consumer demand, competition, and market conditions. Therefore, it is an example of a decision under uncertainty.

Question 2

The outcomes that result given the actual decision made and the state of nature that occurs are referred to as ______.
A)consequences
B)states of nature
C)payoffs
D)decision alternatives

Accepted Answer

Consequences are the outcomes that result from a decision made in a given state of nature.

Question 3

Decisions are made when the state of nature is known under which of the following scenarios?
A)decisions under certainty
B)decisions under uncertainty
C)decisions under state of nature
D)decisions under risk

Accepted Answer

Decisions are made when the state of nature is known in decisions made under certainty. Under this scenario, there is complete information available about the possible outcomes of each alternative, making it possible to choose the best option with certainty.

Question 4

______ are future events or occurrences that can take place that are beyond the control of the decision maker.
A)Consequences
B)States of nature
C)Payoffs
D)Decision alternatives

Accepted Answer

States of nature are future events or occurrences that are beyond the control of the decision maker. Consequences and payoffs are the results of decision alternatives, while decision alternatives are the choices available to the decision maker. States of nature are the unknown events that may occur, and are therefore the best choice for this question.

Question 5

Reduce the defect rate of a manufacturing process by 5% over the next 6 months.This example is an illustration of which of the following steps involved in a systematic decision-making process? A)Define the specific and measurable objectives the decision needs to accomplish. B)Determine the best decision-making tool to use. C)Evaluate each alternative solution. D)Monitor the results.

Accepted Answer

The example given involves defining a specific and measurable objective of reducing the defect rate of a manufacturing process by 5% over the next 6 months. This is the first step in a systematic decision-making process, which is to define clear and measurable objectives.

Question 6

Which of the following is FALSE about the steps involved in a systematic decision-making process?
A)Define the problem or challenge as clearly and concisely as possible.
B)Determine the best decision-making tool to use.
C)Generate a limited list of possible solutions.
D)Evaluate each alternative solution.

Accepted Answer

The statement about generating a limited list of possible solutions is false because in a systematic decision-making process, it's important to generate as many potential solutions as possible to thoroughly explore all options before narrowing them down. Limiting the list prematurely can overlook viable solutions.

Question 7

Which of the following statements is FALSE about systematic decision-making process?
A)The strategic decision-making process is used to make strategic long-term decisions.
B)Using a systematic approach guarantees that the decision will be the "right" one.
C)The strategic decision- making process is used to make short-term decisions.
D)The strategic decision-making process consists of various steps.

Accepted Answer

Using a systematic approach to decision-making helps in structuring the process and considering all relevant factors, but it does not guarantee that the decision will be the "right" one due to the inherent uncertainties and complexities in decision-making environments.

Question 8

The systematic decision-making process that operations and supply chain managers rely on consists of ______ steps:
A)five
B)six
C)seven
D)eight

Accepted Answer

The systematic decision-making process typically consists of seven steps: identifying the problem, gathering information, generating alternatives, evaluating alternatives, choosing the best alternative, implementing the decision, and monitoring the results.

Question 9

Evaluate the results to determine if the desired objectives were achieved in the established timeframe.This statement applies to which of the following steps involved in a systematic decision-making process? A)Define the problem or challenge as clearly and concisely as possible. B)Determine the best decision-making tool to use. C)Evaluate each alternative solution. D)Monitor the results.

Accepted Answer

Evaluating the results to determine if the desired objectives were achieved in the established timeframe is a step in the systematic decision-making process known as monitoring the results. Therefore, the correct choice is D.

Question 10

The decision maker-although not certain-is aware of the chances,or probabilities,of the various states of nature occurring.This statement relates to which of the following scenarios?
A)decision under certainty
B)decision under uncertainty
C)decision under state of nature
D)decision under risk

Accepted Answer

In decision making under certainty, the decision maker knows with certainty the outcome of each possible decision or action. In decision making under uncertainty, the decision maker does not have any information about the possible outcomes or probabilities of the states of nature. Decision making under state of nature is not a commonly used term. In decision making under risk, the decision maker has some knowledge or information about the probabilities associated with each state of nature. Therefore, the statement in the question relates to decision making under risk.

Question 11

The classification of decision-making situations is based on ______ about the states of nature
A)degree of uncertainty
B)frequency of occurrence
C)time of occurrence
D)length of occurrence

Accepted Answer

The classification of decision-making situations is based on the degree of uncertainty about the states of nature, which ranges from complete certainty to complete uncertainty. The other options, such as frequency of occurrence, time of occurrence, and length of occurrence, may be relevant factors to consider in decision-making, but they do not form the basis for classifying decision-making situations.

Question 12

Decisions are made when there are not only multiple states of nature,but they are also unpredictable and the decision maker cannot even make an educated guess about the chances,or probabilities,of their coming.This statement relates to which of the following scenarios?
A)decisions under certainty
B)decisions under uncertainty
C)decisions under state of nature
D)decisions under risk

Accepted Answer

This statement relates to decisions under uncertainty, where the decision maker cannot accurately assess the likelihood of different outcomes. Decisions under certainty involve a known outcome, decisions under state of nature involve probabilities that can be estimated, and decisions under risk involve known probabilities of different outcomes.

Question 13

Consider that you are getting ready to leave outside in the morning,and weather forecasters predict rain.Whether or not it will rain is an illustration of ______.
A)consequences
B)states of nature
C)payoffs
D)decision alternatives

Accepted Answer

The weather forecast predicting rain is an example of a state of nature, which is something that is out of the decision maker's control. The decision maker can only anticipate the possible outcomes based on the different states of nature, in this case, whether it will rain or not. Therefore, the best choice is to prepare for the possibility of rain by bringing an umbrella or wearing appropriate clothing.

Question 14

The actions decision-makers can take to address or solve the problem are referred to as ______.
A)consequences
B)states of nature
C)payoffs
D)decision alternatives

Accepted Answer

The actions decision-makers can take to address or solve the problem are called decision alternatives. These are the different options or choices that decision-makers can choose from to solve the problem. Therefore, Option D is the correct answer. Options A, B, and C refer to different aspects of decision-making but are not specifically related to the actions decision-makers can take to address or solve the problem.

Question 15

Any decision-making situation is comprised of ______ elements.
A)three
B)four
C)five
D)six

Accepted Answer

Decision-making situations typically comprise four elements: (1) a decision maker, (2) goals or objectives, (3) alternatives or choices, and (4) an environment or context in which the decision is made.

Question 16

Weigh the cost and time related to selecting and implementing each alternative.This statement applies to which of the following steps involved in a systematic decision-making process? A)Define the problem or challenge as clearly and concisely as possible. B)Determine the best decision-making tool to use. C)Evaluate each alternative solution. D)Monitor the results.

Accepted Answer

The step mentioned in the statement is evaluating each alternative solution, therefore the answer is C.

Question 17

Depending on the degree of certainty about the states of nature,every decision-making situation can be classified into ______ categories.
A)three
B)four
C)five
D)six

Accepted Answer

The three categories are:
1) Certainty: In this situation, the decision maker is certain about the outcome of each decision. There is no risk or uncertainty involved.
2) Risk: In this situation, the decision maker knows the probability associated with each possible outcome. This category includes decision-making under risk or decision-making under uncertainty with known probabilities.
3) Uncertainty: In this situation, the decision maker does not know the probability associated with each possible outcome. This category includes decision-making under uncertainty with unknown probabilities.

Question 18

The values the decision-maker places on each combination of actual decisions and states of nature are referred to as ______.
A)consequences
B)states of nature
C)payoffs
D)decision alternatives

Accepted Answer

Payoffs refer to the values or outcomes associated with each combination of decisions and states of nature in decision-making.

Question 19

Consider that you are getting ready to leave outside in the morning,and weather forecasters predict rain.You getting wet or staying dry and being burdened with carrying a raincoat or not are all examples of ______.
A)consequences
B)states of nature
C)payoffs
D)decision alternatives

Accepted Answer

The options presented in the scenario (getting wet or staying dry with a raincoat) are the decision alternatives. The potential outcomes of those decisions (getting wet or staying dry) are the consequences. Therefore, the correct answer is consequences. As for the best choice, it depends on personal preference and circumstances (e.g. distance to be traveled, duration of exposure to rain, etc.). Some people may prefer to risk getting wet and avoid carrying a raincoat, while others may prioritize staying dry and choose to carry a raincoat.

Question 20

Consider that you are getting ready to leave outside in the morning,and weather forecasters predict rain.If you decide to take your raincoat and it rains,which of the following is the corresponding payoff?
A)There is no cost for dry cleaning your suit,but you were burdened by carrying the raincoat.
B)There is no cost for dry cleaning your suit,and you were not burdened by carrying the raincoat.
C)There is a cost for dry cleaning your suit,and you were burdened by carrying the raincoat.
D)There is a cost for dry cleaning your suit,but you were not burdened by carrying the raincoat.

Accepted Answer

If you decide to take your raincoat and it rains, you avoid the cost of dry cleaning your suit because the raincoat protects it. However, you were burdened by carrying the raincoat.

Quiz 29: Decision-Making Tools

A company's decision to introduce a new product into the market is an example of ______.

The outcomes that result given the actual decision made and the state of nature that occurs are referred to as ______.

Decisions are made when the state of nature is known under which of the following scenarios?

______ are future events or occurrences that can take place that are beyond the control of the decision maker.

Reduce the defect rate of a manufacturing process by 5% over the next 6 months.This example is an illustration of which of the following steps involved in a systematic decision-making process?

Which of the following is FALSE about the steps involved in a systematic decision-making process?

Which of the following statements is FALSE about systematic decision-making process?

The systematic decision-making process that operations and supply chain managers rely on consists of ______ steps:

Evaluate the results to determine if the desired objectives were achieved in the established timeframe.This statement applies to which of the following steps involved in a systematic decision-making process?

The decision maker-although not certain-is aware of the chances,or probabilities,of the various states of nature occurring.This statement relates to which of the following scenarios?

The classification of decision-making situations is based on ______ about the states of nature

Decisions are made when there are not only multiple states of nature,but they are also unpredictable and the decision maker cannot even make an educated guess about the chances,or probabilities,of their coming.This statement relates to which of the following scenarios?

Consider that you are getting ready to leave outside in the morning,and weather forecasters predict rain.Whether or not it will rain is an illustration of ______.

The actions decision-makers can take to address or solve the problem are referred to as ______.

Any decision-making situation is comprised of ______ elements.

Weigh the cost and time related to selecting and implementing each alternative.This statement applies to which of the following steps involved in a systematic decision-making process?

Depending on the degree of certainty about the states of nature,every decision-making situation can be classified into ______ categories.

The values the decision-maker places on each combination of actual decisions and states of nature are referred to as ______.

Consider that you are getting ready to leave outside in the morning,and weather forecasters predict rain.You getting wet or staying dry and being burdened with carrying a raincoat or not are all examples of ______.

Consider that you are getting ready to leave outside in the morning,and weather forecasters predict rain.If you decide to take your raincoat and it rains,which of the following is the corresponding payoff?