1. Which of the following best describes the concept of "linear
programming"?
- A) A method for forecasting future trends
- B) A mathematical technique for optimizing resource
allocation
- C) A statistical method for analyzing variance
- D) A qualitative approach to decision making
- ANS: B) A mathematical technique for optimizing resource
allocation
, - Rationale: Linear programming is used to find the best
possible outcome in a given mathematical model for resource
allocation.
2. What is the primary purpose of sensitivity analysis in decision
making?
- A) To determine the most profitable investment
- B) To assess the impact of changes in input variables on the
outcome
- C) To calculate the average cost of production
- D) To evaluate the effectiveness of marketing strategies
- ANS: B) To assess the impact of changes in input variables
on the outcome
- Rationale: Sensitivity analysis helps in understanding how
changes in input variables affect the overall outcome of a
decision.
3. Which of the following is a key characteristic of a decision
tree?
- A) It is used for qualitative analysis
- B) It represents decisions and their possible consequences
- C) It is a method for data collection
- D) It focuses on short-term goals
, - ANS: B) It represents decisions and their possible
consequences
- Rationale: Decision trees visually represent decisions and
their potential outcomes, helping in the decision-making process.
4. What is the primary difference between deterministic and
probabilistic models?
- A) Deterministic models involve uncertainty, while
probabilistic models do not
- B) Deterministic models provide a single outcome, while
probabilistic models account for multiple possible outcomes
- C) Deterministic models are used for qualitative analysis,
while probabilistic models are used for quantitative analysis
- D) Deterministic models are less accurate than probabilistic
models
- ANS: B) Deterministic models provide a single outcome,
while probabilistic models account for multiple possible outcomes
- Rationale: Deterministic models yield a single outcome
based on fixed inputs, while probabilistic models consider
multiple possible outcomes based on varying probabilities.
5. Which of the following best describes the concept of
"expected value" in decision making?
- A) The maximum possible profit from a decision
, - B) The average outcome when considering all possible
scenarios
- C) The minimum acceptable return on investment
- D) The total cost of a decision
- ANS: B) The average outcome when considering all
possible scenarios
- Rationale: Expected value is the weighted average of all
possible outcomes, considering their probabilities.
Fill-in-the-Blank Questions
6. The __________ is a graphical representation of the
relationship between two variables.
- ANS: scatter plot
- Rationale: A scatter plot visually displays the relationship
between two variables, helping to identify patterns and
correlations.
7. A __________ is a statistical measure that indicates the
strength and direction of a linear relationship between two
variables.
- ANS: correlation coefficient
- Rationale: The correlation coefficient quantifies the strength
and direction of a linear relationship between two variables.
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Bankart. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $12.49. You're not tied to anything after your purchase.
