QUESTION: 79 Topic 2: Part 2 Sec Two (53 to 100)

A decision maker is operating in an environment in which all the facts surrounding a decision are known exactly, and each alternative is associated with only one possible outcome. The environment is known as

Certainly.
Risk.
Uncertainly.
Probability.

Answer(s): A

Explanation:

The less the variability of the future results of a decision, the smaller the risk involved. If each choice is associated with only one possible outcome, no variability exists. Such a condition is one of certainly (zero variance).

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QUESTION: 80 Topic 2: Part 2 Sec Two (53 to 100)

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The use of a decision tree is appropriate for decision making under conditions of

Uncertainty and risk.
Uncertainly and subjective likelihoods.
Certainty'.
Risk.

Answer(s): D

Explanation:

Decision tree analysis is used when various options of certainty', their consequences, and the probabilities of those consequences can be ascertained with a high degree of confidence. Under conditions of uncertainty', however, probabilities are unknown.

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QUESTION: 81 Topic 2: Part 2 Sec Two (53 to 100)

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The modeling technique to be used for situations involving a sequence of events with several possible outcomes associated with each event is

Queuing theory.
Simulation.
Linear programming.
Decision tree analysis.

Answer(s): D

Explanation:

Decision tree analysis is useful when the most beneficial series of decisions is to be chosen. The possible decisions for each decision point, the events that might follow from each decision, the probabilities of these events, and the quantified outcomes should be known.

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QUESTION: 82 Topic 2: Part 2 Sec Two (53 to 100)

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Which of the following statements is/are true about choosing a course of action?

I). Future cash flows of the potential courses of action must be compared.
II). Qualitative factors must be considered.
Ill). Nonfinancial quantitative factors do not have to be considered.

l only.
l and ll
Ill only.
l, ll, and lll.

Answer(s): B

Explanation:

The selection of the best available solution is the objective of the decision-making process. The choice involves not only comparing the future cash flows of the potential courses of action1 but also considering qualitative and nonfinancial quantitative factors. Qualitative factors include relationships with employees, suppliers, and customers. Nonfinancial quantitative factors include rate of defective output and manufacturing lead time.

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QUESTION: 79 Topic 2: Part 2 Sec Two (53 to 100)

Explanation:

QUESTION: 80 Topic 2: Part 2 Sec Two (53 to 100)

Explanation:

QUESTION: 81 Topic 2: Part 2 Sec Two (53 to 100)

Explanation:

QUESTION: 82 Topic 2: Part 2 Sec Two (53 to 100)

Explanation:

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