information and decision making part 2 (4)

Question 1

What are the two approaches in solving problems?

Answer 1

qualitative approach, quantitative approach

Question 2

This term refers to evaluation of alternatives using intuition and subjective judgment.

Answer 2

qualitative approach

Question 3

Stevenson state that managers tend to use the qualitative approach when ____

Answer 3

the problem is fairly simple, the problem is familiar, the costs involved are not great/low cost, immediate decisions are needed

Question 4

It concentrates on the quantitative facts or data associated with the problem and develop mathematical expression that describes the objectives, constraints, and other relationships that exist in the problem.

Answer 4

quantitative approach

Question 5

Quantitative approach is used when ____

Answer 5

the problem is complex, the problem is very important, the problem is new and the manager has no previous experience from which to draw, the problem involves many variables, there are data which describe the decision environment, there are data which describe the value or utility of the different possible alternatives, the goals of the decision maker or her organization can be described in quantitative term, workable models are available for these situations

Question 6

What are the nine quantitative models for decision making?

Answer 6

inventory models, queuing theory, network models, forecasting, regression analysis, simulation, linear programming, sampling theory, statistical decision theory/decision analysis

Question 7

____ consists of several types all designed to help the engineering manager make decisions regarding inventory.

Answer 7

inventory models

Question 8

What are the different inventory models?

Answer 8

economic order quantity model, production order quantity model, back order inventory mode, quantity discount inventory model

Question 9

____ calculate the number of items that should be ordered at one time to minimize yearly cost of placing orders and carrying items in inventory.

Answer 9

economic order quantity model

Question 10

_____ economic order quantity technique applied to production orders.

Answer 10

production order quantity model

Question 11

___ used for planned shortages.

Answer 11

back order inventory model

Question 12

_____ minimize the total cost when quantity discounts are offered by suppliers.

Answer 12

quantity discount inventory model

Question 13

_____ describes how to determine the number of service units that will minimize both customer waiting time and cost of service.

Answer 13

queuing theory

Question 14

_____ models where the large tasks are broken into smaller segments that can be managed independently.

Answer 14

network models

Question 15

What are the two prominent network models?

Answer 15

program evaluation review technique (PERT), critical path method (CPM)

Question 16

____ enables managers to schedule, monitor and control large and complex projects with three time estimates for each activity.

Answer 16

program evaluation review technique (PERT)

Question 17

_____ network technique using only one-time factor per activity.

Answer 17

critical path method (CPM)

Question 18

____ the collection of past and current information to make predictions about the future.

Answer 18

forecasting

Question 19

A forecasting method that examines the association between two or more variables. It uses data from previous periods to predict future events.

Answer 19

regression analysis

Question 20

What are the two types of regression analysis?

Answer 20

simple regression, multiple regression

Question 21

____ one independent is involved.

Answer 21

simple regression

Question 22

____ two or more independent variables are involved.

Answer 22

multiple regression

Question 23

_____ a model constructed to represent reality on which conclusions about real-life problems can be used.

Answer 23

simulation

Question 24

Quantitative technique that is used to produce an optimum solution within the bounds by constraints upon the decision.

Answer 24

linear programming

Question 25

Quantitative technique where samples of populations are statistically determined to be used for a number of processes such as quality control and marketing research.

Answer 25

sampling theory

Question 26

Rational way to conceptualize, analyze and solve problems in situations involving limited or partial information about the decision environment.

Answer 26

statistical decision theory/decision analysis

Question 27

Decision environment has three classifications: ____

Answer 27

decision making under conditions of certainty, decision making under conditions of uncertainty, decision making under conditions of risk

Question 28

Only one state of nature exists. There is complete certainty about the future.

Answer 28

decision making under conditions of certainty

Question 29

More than one state of nature exists, but the decision maker has no knowledge about the various states.

Answer 29

decision making under conditions of uncertainty

Question 30

More than one state of nature exists, but now the decision maker has information which will support the assignment of probability values to each of the states.

Answer 30

decision making under conditions of risk

Question 31

In inventory management, _____ is the order quantity that minimizes the total holding costs and ordering costs. It is one of the oldest classical production scheduling models.

Answer 31

economic order quantity

Question 32

What are factors under inventory cost?

Answer 32

holding costs, ordering costs, setup costs

Question 33

The costs of holding or “carrying” inventory over time; e.g. obsolescence, insurance, extra staffing, interest, pilferage, damage, warehousing, etc.

Answer 33

holding costs

Question 34

The costs of placing an order and receiving goods; e.g. supplies, forms, order processing, clerical support, etc.

Answer 34

ordering costs

Question 35

Cost to prepare a machine or process from manufacturing an order; e.g. clean-up costs, re-tooling costs, adjustment costs, etc.

Answer 35

setup costs

Question 36

____ the workable options that must be considered in the decision.

Answer 36

decision alternative

Question 37

____ The probable future events that occur, not under the control of the decision maker.

Answer 37

states of nature

Question 38

_____ a table which shows the payoffs (profit or loss) which would result from each possible combination of decision alternative and state of nature.

Answer 38

payoff table

Question 39

What are the four types of criteria to look at in decision making under conditions of uncertainty?

Answer 39

maximax criterion (optimist), maximin criterion (pessimist), minimax regret criterion (opportunist), criterion of realism (realist)

Question 40

The ____ rule involves selecting the alternative that maximizes the minimum payoff available.

Answer 40

maximax

Question 41

In ___ criterion, select the decision alternative which would maximize his maximum payoff.

Answer 41

optimistic

Question 42

In the ____ criterion, it is to maximize his minimum possible payoff or to choose the best of the worst.

Answer 42

pessitmistic

Question 43

Choose the minimum of these regret values.

Answer 43

minimax regret criterion (opportunist)

Question 44

It is considering both optimism and pessimism.

Answer 44

criterion of realism