LESSON 1: INTRODUCTION TO MODELING AND DECISION ANALYSIS Flashcards
In a retail business, which of the following is an example of prescriptive analytics?
A. Analyzing past sales data
B. Predicting future sales trends
C. Evaluating customer satisfaction
D. Recommending optimal pricing strategies
Recommending optimal pricing strategies
- A company wants to decide whether to invest in a new manufacturing facility. They use decision analysis to evaluate the potential outcomes and assign probabilities. What type of model is this?
A. Descriptive model
B. Explanatory model
C. Predictive model
D. Prescriptive model
Prescriptive model
What is the primary purpose of a decision tree in decision analysis?
A. To predict future sales
B. To visualize data trends
C. To summarize historical data
D. To evaluate options and outcomes
To evaluate options and outcomes
Which of the following is not a step in the decision-making process?
A. Identifying the problem
B. Generating alternative solutions
C. Implementing the decision
D. Analyzing historical data
Analyzing historical data
A company uses linear programming to optimize its supply chain. What type of modeling technique is this?
A. Regression analysis
B. Monte Carlo simulation
C. Decision analysis
D. Optimization modeling
Optimization modeling
A manufacturing company is trying to determine the optimal production quantity to minimize costs. Which modeling technique is most appropriate?
A. Forecasting
B. Simulation
C. Linear programming
D. Decision trees
Linear programming
Which of the following best describes prescriptive analytics?
A. Describing past events
B. Predicting future outcomes
C. Summarizing historical data
D. Offering solutions and recommendations
Offering solutions and recommendations
In a financial institution, which type of model is typically used to assess credit risk?
A. Regression analysis
B. Simulation
C. Decision analysis
D. Monte Carlo modeling
Regression analysis
A company uses A/B testing to determine the most effective marketing strategy for a new product launch. What type of model is this?
A. Predictive model
B. Simulation
C. Descriptive model
D. Explanatory model
Predictive model
In decision analysis, what does sensitivity analysis help determine?
A. The impact of uncertainties on the decision
B. The historical performance of the decision
C. The initial problem statement
D. The best decision alternative
The impact of uncertainties on the decision
Which of the following is not a common objective in decision analysis?
A. Maximizing profit
B. Minimizing costs
C. Minimizing uncertainty
D. Maximizing historical data
Maximizing historical data
A retail store wants to optimize its inventory management by determining the optimal reorder point and order quantity. What type of model should they use?
A. Forecasting
B. Regression analysis
C. Queuing theory
D. Inventory optimization modeling
Inventory optimization modeling
In decision analysis, what is a decision variable?
A. An uncertain event
B. A random outcome
C. An uncontrollable factor
D. A choice that the decision-maker can control
A choice that the decision-maker can control
A tech company is using Monte Carlo simulation to assess the risk associated with a new product launch. What is the primary advantage of using Monte Carlo simulation?
A. It provides a single, deterministic outcome.
B. It accounts for uncertainty and variability
C. It predicts future market trends.
D. It offers historical data analysis.
It accounts for uncertainty and variability
You are the manager of a retail store, and you want to optimize your inventory levels. You have historical sales data for the past year. Which type of model is most appropriate for this situation?
A. Descriptive Model
B. Predictive Model
C. Prescriptive Model
D. Explanatory Model
Predictive Model
An E-commerce company is looking to determine the best price for a new product you’re launching. You have data on production costs, competitor pricing, and market demand. What type of analysis is needed to make an informed decision?
A. Descriptive Analysis
B. Predictive Analysis
C. Prescriptive Analysis
D. Diagnostic Analysis
Prescriptive Analysis
The manufacturing company is facing a supply chain disruption due to a natural disaster. You need to decide how to allocate limited resources to different customer orders. What approach should you take?
A. Use a historical data analysis
B. Use a Monte Carlo simulation
C. Implement linear programming
D. Create a decision tree analysis
Implement linear programming
What is the primary goal of prescriptive analytics in modern business decision-making?
A. Describing past events
B. Predicting future trend
C. Optimizing decision-making
D. Summarizing current data
Optimizing decision-making
A company wants to optimize its supply chain to reduce costs and improve efficiency. What type of prescriptive analytics model is most suitable for this task?
A. Regression analysis
B. Time series forecasting
C. Monte Carlo simulation
D. Network optimization
Network optimization
Which of the following best represents the process of “Scenario Analysis” in decision-making with prescriptive analytics?
A. Calculating descriptive statistics
B. Analyzing historical data to identify trends
C. Creating predictive models for future sales
D. Evaluating various possible future situations and their associated risks and rewards
Evaluating various possible future situations and their associated risks and rewards
