Decision Analysis

Question 1

Refers to a systematic, quantitative, and interactive approach to addressing and evaluating important choices confronted by organizations in the private and public sector.

Answer 1

Decision Analysis

Question 2

Decision Analysis can be used to develop blank strategy when a decision maker is faced with several decision alternatives and an uncertain or risk-filled pattern of future events.

Answer 2

optimal

Question 3

It is the first step in the decision analysis process.

Answer 3

Problem Formulation

Question 4

The different possible strategies the decision maker can employ.

Answer 4

Decision Alternatives

Question 5

Refer to the uncertain future events

Answer 5

States of Nature

Question 6

The consequence resulting from a specific combination of a decision alternative and a state of nature or chance event outcome.

Answer 6

Resulting Payoffs

Question 7

The decision with the largest possible payoff is chosen, the best possible payoff. Also called Maximax or Maximum of all Maximum.

Answer 7

Optimistic Approach

Question 8

The decision alternative recommended is the one that provides the best of the worst possible payoff. Also called Maximin or Maximum of all Minimum.

Answer 8

Conservative Approach

Question 9

Choose the alternative with the best weighted payoff. It is treating the states of nature as equal.

Answer 9

Laplace

Question 10

Requires the construction of a regret table or an opportunity loss table. This is done by calculating for each state of nature the difference between each payoff and the largest payoff for that state of nature. Also called Minimax or Minimum of all Maximum Regret.

Answer 10

Minimax Regret Approach