Management Science & Decision Making Quiz
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Management Science & Decision Making Quiz

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Questions and Answers

Which of the following best characterizes management science?

  • Emphasis on individual decision making
  • A systematic view of problems (correct)
  • Use of intuition in decision making
  • Focus on qualitative analysis only

    • What is the first step in the modeling process for decision making?

  • Formulate problem (correct)
  • Construct a model
  • Test the model’s ability
  • Derive a solution from the model

    • Which option is NOT a step in the modeling process for decision making?

  • Formulate a hypothesis (correct)
  • Construct a model
  • Derive a solution from the model
  • Test the model’s ability

    • Which approach is NOT emphasized in management science?

    <p>Individual subjective judgment</p> Signup and view all the answers

    What is the purpose of constructing a model in the decision-making process?

    <p>To analyze and simplify complex real-world problems</p> Signup and view all the answers

    What factor primarily determines the maximum profit level in production?

    <p>Resource limitations faced</p> Signup and view all the answers

    Which resources are specified as limitations in the production process?

    <p>The number of available workers and their hours</p> Signup and view all the answers

    How many total hours do the workers contribute per week?

    <p>160 hours</p> Signup and view all the answers

    What is a potential outcome if no sufficient resource constraints are considered?

    <p>Overestimation of potential profit</p> Signup and view all the answers

    If the factory hired two more workers, how would that affect production levels?

    <p>Increase production capacity</p> Signup and view all the answers

    What is the primary purpose of a payoff (benefit) table in decision making?

    <p>To evaluate the outcomes of different decisions</p> Signup and view all the answers

    In the context of game theory, what does a decision matrix primarily help to assess?

    <p>The interactions between different players' strategies</p> Signup and view all the answers

    Which of the following best describes a decision under uncertainty in the context of game theory?

    <p>Choosing strategies without knowledge of other players' choices</p> Signup and view all the answers

    How does a payoff table contribute to the decision-making process in a competitive scenario?

    <p>By allowing comparison of multiple strategies and their outcomes</p> Signup and view all the answers

    When using a payoff table, what aspect is essential to consider for effective decision-making?

    <p>The accuracy of the estimated probabilities</p> Signup and view all the answers

    What is the minimum value for Product I across all demand levels?

    <p>$-500</p> Signup and view all the answers

    Which product has the highest minimum value among the options provided?

    <p>Product II</p> Signup and view all the answers

    Which product demonstrates the greatest negative minimum value?

    <p>Product III</p> Signup and view all the answers

    What is the minimum value for the 'Do Nothing' option at all demand levels?

    <p>$0</p> Signup and view all the answers

    Which product has the lowest maximum value among the three products?

    <p>Product III</p> Signup and view all the answers

    What does it imply when outcomes are described as 'equally likely' in decision making?

    <p>All outcomes have the same probability of occurring.</p> Signup and view all the answers

    How should a decision maker approach options that yield a utility of 0?

    <p>Eliminate these options without considering them.</p> Signup and view all the answers

    Which mathematical concept is primarily applied when dealing with equally likely outcomes?

    <p>Probability theory.</p> Signup and view all the answers

    In the context of decision making, what does a solution of 1 signify?

    <p>The best outcome has been identified.</p> Signup and view all the answers

    What is the implication of stating 'Do Nothing' as an option in decision making?

    <p>It carries a utility score of 0.</p> Signup and view all the answers

    Study Notes

    Management Science & Decision Making

    • Management science involves a systematic approach to problem-solving.
    • Teams are typically involved in applying this approach.
    • This approach emphasizes the use of mathematical models, statistical methods, and quantitative tools.

    Steps of Modeling

    • Formulate the problem: Clearly define the problem that needs to be addressed.
    • Construct a model: Develop a representation of the problem using mathematical or other formal methods.
    • Test the model: Evaluate the model's accuracy and validity.
    • Derive a solution from the model: Use the model to determine the best course of action or solution to the problem.

    Decision Making Under Uncertainty: Game Theory

    • Payoff (Benefit) Table - Decision Matrix: A tool used to analyze decisions when the outcomes are uncertain.
    • The table lists different possible actions (decisions) and their corresponding payoffs for each possible state of nature (event).

    Example: Production Level Decision

    • Problem: Maximize profit in producing X and Y products.
    • Constraints: Limited factory workers (3 machinists and 2 assemblers), each working 40 hours a week.
    • Decision Matrix: Rows represent different production plans (products I, II, III, Do Nothing), columns represent different demand levels, and cells contain the profit for each combination.

    Equally Likely (Laplace) Criterion

    • This criterion assumes that all states of nature are equally likely.
    • Step 1: Find the minimum payoff for each row.
    • Step 2: Select the row with the highest minimum payoff.
    • In this example: Product II has the highest minimum payoff (200$) and is considered the best choice under the equally likely criterion.

    Decision Making

    • It is a process of selecting a course of action from among several alternatives.
    • The process of decision-making involves identifying the problem, gathering information, evaluating alternative solutions, choosing the best solution, and implementing the decision.
    • Decision-making can be complex, and there is no one-size-fits-all approach. The best approach will depend on the specific situation.

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    Related Documents

    Engineering Management Lecture 4 PDF

    Description

    Test your knowledge on management science and decision-making strategies! This quiz covers the systematic approach to problem-solving, modeling steps, and decision-making under uncertainty, including game theory applications. Perfect for students and professionals looking to enhance their analytical skills.

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