QUANTECH

Question 1

7 Steps of Problem Solving

Answer 1

• Define the problem.
• Identify the set of alternative solutions.
• Determine the criteria for evaluating alternatives.
• Evaluate the alternatives.
• Choose an alternative (make a decision).
• Implement the chosen alternative.
• Evaluate the results.

Question 2

Reasons for using quantitative analysis:

Answer 2

• The problem is complex.
• The problem is very important.
• The problem is new.
• The problem is repetitive.

Question 3

Quantitative Analysis Process

Answer 3

1. Model Development
2. Data Preparation
3. Model Solution
4. Report Generation

Question 4

Types of Models

Answer 4

1. Iconic
2. Analog
3. Mathematical

Question 5

A type of model that involves physical replicas

Answer 5

Iconic

Question 6

A type of model that involves Physical but not visually similar.

Answer 6

Analog

Question 7

A type of model that Represent problems with formulas

Answer 7

Mathematical

Question 8

Essential for accurate analysis, but time-consuming and prone to errors.

Answer 8

Data preparation

Question 9

Involves user involvement, monitoring, and refining as necessary.

Answer 9

Model Implementation

Question 10

The body of knowledge involving quantitative approaches to decision making is reffered to as:

Answer 10

• Management Science
• Operations Research
• Decision Science

Question 11

Must be made in selecting an appropriate mathematical model

Answer 11

Cost/benefit considerations

Question 12

Mathematical models are said to be _____ if any of the uncontrollable inputs is subject to variation.

Answer 12

Stochastic

Question 13

If any of the uncontrollable inputs in a mathematical model are NOT subject to variation, they are ___________

Answer 13

Deterministic

Question 14

The values of the decision variables that provide the mathematically-best output are referred to as the _______ ________

Answer 14

Optimal Solution

Question 15

Controllable Inputs are also called as

Answer 15

Decision Variables

Question 16

Uncontrollable Inputs are also called as

Answer 16

Environmental Factors

Question 17

Is an algebraic equation in which each term is either a
constant or the product of a constant and (the first power of) a single variable.

ax+by=c

Answer 17

Linear Equation

Question 18

A visual representation of decisions (square nodes) and chance events (round nodes).

Answer 18

Decision Tree

Question 19

Choose the decision with the largest payoff.

Answer 19

Optimistic Approach (Maximax)

Question 20

Select the decision with the best worst-case scenario

Answer 20

Conservative Approach (Maximin)

Question 21

Minimize potential regret

Answer 21

Minimax Regret Approach

Question 22

Recognizes the variance between expected value and actual outcomes. helps the decision maker recognize the difference between:

the expected value of a decision alternative, and the payoff that might actually occur

Answer 22

Risk Analysis

Question 23

Assesses how input changes affect recommended decisions. Can be used to determine how changes to the following inputs affect the recommended decision alternative: probabilities for the states of nature values of the payoffs

Answer 23

Sensitivity Analysis

Question 24

Initial estimates before sample information.

Prior to obtaining this information, the probability estimates for the states of nature are called

Answer 24

Prior Probabilities

Question 25

Likelihoods based on states of nature It is a condition where the inequality is true for certain values of the unknown involved

Answer 25

Conditional Probabilities

Question 26

Updates prior probabilities to posterior probabilities. These prior probabilities can be revised by employing what Theorem? can be used to compute branch probabilities for decision trees

Answer 26

Bayes' Theorem

Question 27

Evaluates the usefulness of sample data is the ratio of EVSI to EVPI expressed as a percent

Answer 27

Efficiency of Sample Information (E)

Question 28

is the first step of decision making. It is crucial as it sets the stage for the decision-making process, clarifying what needs to be addressed before exploring potential solutions or alternatives.

Answer 28

Definition of a Problem

Question 29

are the ways to evaluate the choices faced by the decision maker. They serve as standards or benchmarks used to assess and compare different options when making a decision

Answer 29

Decision Criteria

Question 30

A model that uses a system of symbols to represent a problem is called a

Answer 30

Mathematical Model

Question 31

A physical model that does not have the same physical appearance as the object being modeled is an

Answer 31

Analog Model

Question 32

Must occur prior to the quantitative analysis process, must involve the analyst and the user of the results, and includes specific objectives and operating constraints.

Answer 32

Problem Definition

Question 33

The volume that results in total revenue being equal to total cost is the ________. At this point, there is neither profit nor loss.

Answer 33

Break-even point

Question 34

When the value of the output cannot be determined even if the value of the controllable input is known, the model is?

Answer 34

Stochastic

Question 35

A system of equations with no solution is called an

Answer 35

Inconsistent System

Question 36

A system of equations with only one solution is called an

Answer 36

Consistent

Question 37

A system of equations with multiple solutions is called an

Answer 37

Dependent

Question 38

The quantitative analysis approach requires __________ __________ for the relationships.

Answer 38

Mathematical Expressions

Question 39

is a statement that one quantity or expression is greater or less than another quantity or expression

Answer 39

Inequality

Question 40

It is a condition where the inequality is true for all values of the unknown involved

Answer 40

Absolute Inequality

Question 41

First step in decision analysis process

Answer 41

Problem Formulation

Question 42

The consequence resulting from a specific combination of a decision alternative and a state of nature Can be expressed in terms of profit, cost, time, distance or any other appropriate measure.

Answer 42

Payoff

Question 43

are representations of real objects or situations

Answer 43

Models

Question 44

A table showing payoffs for all combinations of decision alternatives and states of nature

Answer 44

Payoff Table

Question 45

is a graphical device showing the relationships among the decisions, the chance events, and the consequences

Answer 45

Influence Diagram

Question 46

depict decision nodes

Answer 46

Squares or rectangles

Question 47

depict chance nodes.

Answer 47

Circle

Question 48

depict consequence nodes.

Answer 48

Diamonds

Question 49

connecting the nodes show the direction of influence.

Answer 49

Lines or arcs

Question 50

Leaving a round node represent the different states of nature; branches leaving a square node represent the different decision alternatives

Answer 50

Branches

Question 51

correspond to chance events

Answer 51

Round nodes

Question 52

to identify the best or recommended decision alternative. the sum of the weighted payoffs for the decision alternative.

Answer 52

Expected Value Approach

Question 53

is the increase in the expected profit that would result if one knew with certainty which state of nature would occur. provides an upper bound on the expected value of any sample or survey information.

Answer 53

Expected value of perfect information (EVPI)

Question 54

is the additional expected profit possible through knowledge of the sample or survey information

Answer 54

Expected Value of Sample Information

Question 55

a decision alternative shows the possible payoffs for the decision alternative along with their associated probabilities

Answer 55

Risk profile