Question

-A __________ is a tool for organizing (or structuring) a decision, which takes into account different __________ which might result under different __________.

            A         payoff table; payoffs; states of nature

            B          decision table; profits; costs

            C          payoff table; profits; times

            D         decision tree; payoffs; probabilities

-When using a payoff table to help make a decision, an optimistic decision-maker who wants to maximize payoffs while ignoring potential losses should follow a ____________ decision rule.

            A         maximax

            B          maximin

            C          minimax

            D         minimin

            E          none of the above

-When using a payoff table to help make a decision, a conservative decision-maker who wants to maximize payoffs while minimizing potential losses should follow a ____________ decision rule.

            A         maximax

            B          maximin

            C          minimax

            D         minimin

            E          none of the above

-A market forecaster reckons that economic conditions in the year 2020 are likely to be better than 2019 (40% chance), about the same as 2019 (30% chance), or worse than 2019 (30% chance). These condition categories represent

            A         payoffs

            B          investment risks

            C          decision choices

            D         states of nature

-The objective of Project Management is to

            A         Minimize project duration.

            B          Assure completion of the project by a certain date.

            C          Minimize project duration and cost while meeting customer requirements.

            D         Assure completion of the project within a certain budget

- In a project network (e.g., a PERT network), the actual project completion time will never exceed the expected duration of the activities on the critical path.

            A         true

            B          false

- “Slack”

            A         Is a concept developed to explain delays in project execution, and has no application in other models.

            B          Represents unused, idle, or left-over resources in a variety of models, including Project Scheduling.

            C          Consists of rubber bands which hold project plans, and which are a burden on the environment.

            D         Is a concept developed to overcome the problem of parallel activities in CPM networks.

Answer 1

Answer 1(d)decision tree; payoffs; probabilities

• -A decision tree is a tool for organizing (or structuring) a decision, which takes into account different payoffs which might result under different probabilities.

Answer2 (A) Maximax

• When using a payoff table to help make a decision, an optimistic decision-maker who wants to maximize payoffs while ignoring potential losses should follow a Maximax decision rule.

Answer3 (c) Minimax

• When using a payoff table to help make a decision, a conservative decision-maker who wants to maximize payoffs while minimizing potential losses should follow a Minimax decision rule.

Answer 4 (d) State of Nature

• actual events that may occur in the future
• decision maker is uncertain which will occur and has NO control over them