# Brs Mdm3 Tif Ch08 Essay example

Words: 3272
Pages: 14

Managerial Decision Modeling w/ Spreadsheets, 3e (Balakrishnan/Render/Stair)
Chapter 8 Decision Analysis

8.1 Chapter Questions

1) Determining the best payoff for each alternative and choosing the alternative with the "best of the best" is the approach called:
A) maximax
B) maximin
C) Laplace
D) minimax regret
E) expected monetary value
Page Ref: 323
Topic: Decision Making Under Uncertainty
Difficulty: Moderate

2) Determining the worst payoff for each alternative and choosing the alternative with the "best of the worst" is the approach called:
A) maximax
B) maximin
C) Laplace
D) minimax regret
E) expected monetary value
Page Ref: 323
Topic: Decision Making Under Uncertainty
Difficulty: Moderate

3) The
Page Ref: 323
Topic: Decision Making Under Uncertainty
Difficulty: Moderate

19) In decision making under risk, probabilities associated with future events are usually unknown.
Page Ref: 327
Topic: Decision Making Under Risk
Difficulty: Moderate

20) The maximin criterion approach selects the "best of the worst."
Page Ref: 323
Topic: Decision Making Under Uncertainty
Difficulty: Moderate
21) If the coefficient of realism alpha equals 1, then the criterion of realism will yield the same result as the maximax criterion.
Page Ref: 324
Topic: Decision Making Under Uncertainty
Difficulty: Challenging

22) The minimax regret criterion minimizes the maximum opportunity loss within each alternative.
Page Ref: 325
Topic: Decision Making Under Uncertainty
Difficulty: Moderate

23) The expected value of perfect information (EVPI) places a lower bound on how much a decision maker should be willing to pay to obtain perfect information.