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Free CMA Exam Braindumps (page: 171)

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View Related Case Study

Simulation, a widely used technique in decision modeling, is a

  1. Process of modeling in which real activities are represented in mathematical form.
  2. Tool used for allocating scarce resources.
  3. Technique used to add random behavior to simulate uncertain.
  4. Technique used to map out possible actions given probabilistic events.

Answer(s): A

Explanation:

Computer simulation is used when an optimization model cannot be developed, e.g., because the variables exceed the equations describing them. Simulation involves constructing a mathematical/logical model incorporating most of the features of the problem. This model is tested in a variedly of hypothetical situations, and the modeled responses can then be measured.



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A company experiences both variable usage rates and variable lead times for its inventory' items. The probability distributions for both usage and lead times are known. A technique the company could use for determining the optimal safety stock levels for an inventory item is

  1. Queuing theory.
  2. Linear programming.
  3. Decision tree analysis.
  4. The Monte Carlo method.

Answer(s): D

Explanation:

Simulation is a technique for experimenting with mathematical models using a computer. The Monte Carlo method is a technique used to generate the individual values for a random variable. This simulates the uncertainly inherent in real-world situations. The model is then run a large number of times, and the variance of the probability' distribution of the results and the average performance are determined.



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Decisions are frequently classified as those made under certainly and those made under uncertainly. Certainly exists when

  1. The probability of the event is less than 1.
  2. There is absolutely no doubt that an event will occur.
  3. There is more than one outcome for each possible action.
  4. There is risk involved.

Answer(s): B

Explanation:

An event is certain if there is no doubt that it will occur. The probability is I if an event is certain to occur and 0 if it is certain not to occur. Under conditions of certainly, consequences are therefore deterministic, not 1probabilistic or unknown.



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Which of the following is not an attribute of a probability distribution?

  1. The total probability associated with all possible occurrences equals 1.
  2. It can be modeled by means that provide the probability for every possible outcome.
  3. Only one outcome is possible.
  4. It concerns a random variable.

Answer(s): C

Explanation:

In a probability distribution, the probability of any event(s) is bounded by U (no chance) and I (certainty). The total probability of all possible outcomes must add up to 1. Also, a probability distribution models a random variable through the use of a formula or graph that provides the probability associated with the occurrence of certain values of the random variable. If only one outcome is possible, the variable is not random but rather constant and known with certainty.






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