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Questions and Answers
Which individual is credited with the invention of the steam engine during the Industrial Revolution?
Who is known for introducing the concept of 'Division of labor' during the Industrial Revolution?
In the context of Management, which individual proposed the 'Principles of scientific management'?
Which field emphasizes using tools like flowcharts and Pareto analysis for process improvement?
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Where are most capital budgeting requests and cost savings requests from?
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Which decision making criteria involves choosing the decision with the maximum of the minimum payoffs?
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In decision making under risk, what can be assigned to the occurrence of states of nature in the future?
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What method is used for organizing and illustrating payoffs from different decisions given various states of nature?
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What is the measure of a decision maker's optimism in the Hurwicz decision-making criteria?
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Which decision-making method involves choosing a decision in which each state of nature is weighted equally?
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What type of method is a graphical tool used for analyzing decision situations that require a sequence of decisions over time?
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What is the main focus of Operation Management?
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What is the purpose of a Value Chain in a business context?
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Which of the following is NOT a type of Transformation Process mentioned in the text?
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What activities are considered superfluous along a value chain?
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Which department is NOT typically included in the Operations Function?
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In which type of operation is the Locational Transformation Process most crucial?
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Study Notes
Decision Analysis
- Decision Analysis is a set of quantitative decision-making techniques for decision situations in which uncertainty exists.
- Decision making involves three types of situations:
- Decision making without probabilities (states of nature and events)
- Decision making under risk (probabilities can be assigned to states of nature)
- Decision making under uncertainty (probabilities cannot be assigned to states of nature)
Decision Making Techniques
- Payoff Table: a method of organizing and illustrating payoffs from different decisions given various states of nature.
- Decision making criteria under uncertainty:
- Maximax: choose the decision with the maximum of maximum payoffs.
- Maximin: choose the decision with the maximum of the minimum payoffs.
- Minimax Regret: choose the decision with the minimum of the maximum regrets for each alternative.
- Hurwicz: choose the decision in which decision payoffs are weighted by a coefficient of optimism, alpha.
- Equal likelihood (Laplace): choose the decision in which each state of nature is weighted equally.
Decision Making with Probabilities
- Expected Value (EV): a weighted average of decision outcomes, where each future state of nature is assigned a probability of occurrence.
- EV = ∑[p(x_i) * x_i]
- Expected Value of Perfect Information (EVPI): the maximum value of perfect information to the decision maker.
Sequential Decision Trees
- A graphical method for analyzing decision situations that require a sequence of decisions over time.
- Decision tree consists of:
- Square nodes: indicating decision points.
- Circle nodes: indicating states of nature.
- Arcs: connecting nodes.
Quality Management
- Quality is a critical aspect of Operations Management.
- Operations Management involves:
- Designing, operating, and improving productive systems.
- Transforming inputs into outputs of greater value.
Operations Management
- Operations Management involves:
- Organizing work.
- Selecting processes.
- Arranging layouts.
- Locating facilities.
- Designing jobs.
- Measuring performance.
- Controlling quality.
- Scheduling work.
- Managing inventory.
- Planning production.
Operations Function
- Operations function is related to other functions such as:
- Marketing.
- Finance and Accounting.
- Human Resources.
- Suppliers.
Historical Events in Operations Management
- Industrial Revolution:
- Steam engine (1769, James Watt).
- Division of labor (1776, Adam Smith).
- Interchangeable parts (1790, Eli Whitney).
- Scientific Management:
- Principles of scientific management (1911, Frederick W. Taylor).
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Description
Test your knowledge of decision analysis, a set of quantitative decision-making techniques used in situations with uncertainty. Explore tools for operations managers to make decisions under risk and uncertainty.
