Chapter 8

Question 1

certainty

Answer 1

The business situation where complete knowledge is available so that the decision maker knows exactly what the outcome of each course of action will be.

Question 2

decision analysis

Answer 2

A modeling approach that deals with decision situations that involve a finite and usually not too large number of alternatives.

Question 3

decision table

Answer 3

A tabular representation of possible condition combinations and outcomes.

Question 4

decision tree

Answer 4

A graphical presentation of a sequence of interrelated decisions to be made under assumed risk. This technique classifies specific entities into particular classes based upon the features of the entities; a root is followed by internal nodes, each node (including root) is labeled with a question, and arcs associated with each node cover all possible responses.

Question 5

decision variable

Answer 5

The variable of interest.

Question 6

discrete event simulation

Answer 6

A type of simulation modeling where a system is studied based on the occurrence of events/interaction between different parts (entities/resources) of the system.

Question 7

dynamic models

Answer 7

A modeling technique to capture/study systems that evolve over time.

Question 8

environmental scanning and analysis

Answer 8

A continuous process of intelligence building identification of problems and/or opportunities via acquisition and analysis of data/information.

Question 9

forecasting

Answer 9

Using the data from the past to foresee the future values of a variable of interest.

Question 10

goal seeking

Answer 10

A prescriptive analytics method where first a goal (a target/desired value) is set, and then the satisfying set of input variable values is identified.

Question 11

influence diagram

Answer 11

A graphical representation of a given mathematical model.

Question 12

intermediate result variable

Answer 12

A variable used in modeling to identify intermediate outcomes.

Question 13

linear programming (LP)

Answer 13

(LP) A mathematical modeling technique used to represent and solve constraint optimization problems.

Question 14

mathematical programming

Answer 14

A family of analytic tools designed to help solve managerial problems in which the decision maker must allocate scarce resources among competing activities to optimize a measurable goal.

Question 15

Monte Carlo simulation

Answer 15

A simulation technique that relies on change/probability distribution to represent the uncertainty in the modeling of the decision problem.

Question 16

multidimensional analysis (modeling)

Answer 16

A modeling method that involves data analysis in several dimensions

Question 17

multiple goals

Answer 17

Having more than just one goal to consider in an optimization problem.

Question 18

optimal solution

Answer 18

The best possible solution to a problem.

Question 19

parameter

Answer 19

Numeric constants used in mathematical modeling.

Question 20

quantitative model

Answer 20

Mathematical models that rely on numeric/quantifiable measures.

Question 21

result (outcome) variable

Answer 21

A variable that expresses the result of a decision (e.g., one concerning profit), usually one of the goals of a decision-making problem.

Question 22

risk

Answer 22

A probabilistic or stochastic decision situation.

Question 23

risk analysis

Answer 23

Use of mathematical modeling to assess the nature of risk (variability) for a decision situation.

Question 24

sensitivity analysis

Answer 24

A study of the effect of a change in one or more input variables on a proposed solution.

Question 25

simulation

Answer 25

An imitation of reality in computers.

Question 26

static models

Answer 26

A model that captures a snapshot of the system, ignoring its dynamic features.

Question 27

uncertainty

Answer 27

A decision situation where there is a complete lack of information about what the parameter values are or what the future state of nature will be

Question 28

uncontrollable variable

Answer 28

A factor that affects the result of a decision but is not under the control of the decision maker. These variables can be internal (e.g., related to technology or to policies) or external (e.g., related to legal issues or to climate).

Question 29

visual interactive modeling/simulation (VIM/VIS)

Answer 29

A visual/animated simulation environment that allows for the end user to interact with the model parameters while the mode is running.

Question 30

what-if analysis

Answer 30

It is an experimental process that helps determine what will happen to the solution/output if an input variable, an assumption, or a parameter value is changed.