Liberty University BUSI 411 exam 2 complete solutions correct answers key

Liberty University BUSI 411 exam 2 complete solutions correct answers A+ work

There are 15 different versions

Question 1 The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. He figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for $125. If, for this machine, design capacity is 50 cords per day, effective capacity is 40 cords per day, and actual output is anticipated to be 35 cords per day, what would be its utilization?

Question 2 Students at a major university must go through several registration steps. Officials have observed that it is typically the case that the waiting line at the fee-payment station is the longest. This would seem to suggest that the fee-payment station is the ___________ in the student registration process.

Question 3 The method of financial analysis which results in an equivalent interest rate is:

Question 4 Which of these factors would not be subtracted from design capacity when calculating effective capacity?

Question 5 Everything else being equal, a firm considering outsourcing can be reasonably certain that:

Question 6 A company needs to rebalance a product layout for producing new plastic license plates. They plan to use the assembly line six hours in order to meet projected demand of 2,160 license plates each day. The following table describes the tasks involved in the production of this product:

For output to equal projected demand, what will be the idle time at the second workstation of the assembly line that uses the minimum number of workstations?

Question 7 The maximum allowable cycle time is computed as:

Question 8 Although they do not guarantee optimal solutions, ______________ are useful in finding reasonable solutions when the number of possible options is overwhelming.

Question 9 Cellular layout is a term associated with:

Question 10 A production line is to be designed for a job with three tasks. The task times are .3 minutes, 1.4 minutes, and .7 minutes. The minimum cycle time in minutes is:

Question 11 The chart used to review the overall sequence of an operation by focusing on the movements of either the operator or materials is called a:

Question 12 Which sample proportion will require the largest number of work sampling observations?

Question 13 The owner of Touchdown Sports Bar wants to develop a time standard for the task of mixing a specialty cocktail. In a preliminary study, he observed one of his bartenders perform this task seven times with an average of 90 seconds and a standard deviation of five seconds. How many observations should be made if he wants to be 95.44 percent confident that the maximum error in the observed time is one second?

Question 14 A methods and measurements analyst needs to develop a time standard for a certain task. In a preliminary study, he observed one of his workers perform this task five times, with the following results:

What is the standard time for this task if the employee worked at a 25 percent faster pace than average and an allowance of 20 percent of job time is used?

Question 15 Determining the number of cycles to observe is an element of:

Question 16 Among the disadvantages of having global operations is/are:

Question 17 A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows:

At what annual output would the company be indifferent between the two locations?

Question 18 A location analysis has been narrowed down to three locations. The critical factors, their weights, and the ratings for each location are shown below:

What is the composite score for location B?

Question 19 In general, managing global operations is made easier by __________ and __________.

Question 20 Location choice I has monthly fixed costs of $100,000 and per-unit variable costs of $10. What would its total cost be at a monthly volume of 250 units?

Question 21 The term capacity refers to the maximum quantity an operating unit can process over a given period of time.

Question 22 The percentage of idle time in an assembly line is called cycle time.

Question 23 It would be acceptable to use a group incentive plan for an assembly line operation.

Question 24 Location decisions are basically one-time decisions usually made by new organizations.

Question 25 Retail businesses generally prefer locations that are not near other retailers, as this reduces their competition.

·         Question 1

3 out of 3 points

The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. He figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for $125. If, for this machine, design capacity is 50 cords per day, effective capacity is 40 cords per day, and actual output is expected to be 32 cords per day, what would be its efficiency?

·         Question 2

3 out of 3 points

A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. They estimate it will cost $50 per prisoner to process the paperwork at this new location. The county is paid a $75 commission for each new prisoner they process. How many prisoners would they have to process annually to break even at this new location?

·         Question 3

3 out of 3 points

Improving cash flow would be a reasonable thing to focus on when trying to overcome a _________ constraint.

·         Question 4

3 out of 3 points

Which of the following is not a criterion for developing capacity alternatives?

·         Question 5

·         3 out of 3 points

The ratio of actual output to design capacity is:

·         Question 6

3 out of 3 points

Computer-integrated manufacturing integrates ______________ with manufacturing.

·         Question 7

3 out of 3 points

A company is designing a product layout for a new product. It plans to use this production line eight hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product are:

If the company wants the output rate to be equal to demand, what is the desired cycle time (in seconds)?

·         Question 8

3 out of 3 points

The maker of the world-famous Chocolate Chip Cookies needs to design a product layout for a new product, Mint Chocolate Chip. The company plans to use this new production line eight hours a day in order to meet projected demand of 1,440 cases per day. The following table describes the tasks involved in the production of a Mint Chocolate Chip Cookie. 

Without considering projected demands, what is the minimum possible cycle time for this production line?

·         Question 9

3 out of 3 points

Process choice is _________ driven.

·         Question 10

3 out of 3 points

A company is designing a product layout for a new product. It plans to use this production line eight hours a day in order to meet projected demand of 480 units per day. The tasks necessary to produce this product are:

If the company wants the output rate to be equal to demand, what is the minimum number of workstations needed?

·         Question 11

3 out of 3 points

What is the effect of an increase in the desired confidence level on the number of observations necessary in a time study?

·         Question 12

3 out of 3 points

Asking a group of employees at a particular level to take on more responsibility is a form of ___________ loading, also known as job __________.

·         Question 13

3 out of 3 points

A methods and measurements analyst needs to develop a time standard for a certain task. In a preliminary study, he observed one of his workers perform this task five times, with the following results: 

What is the standard time for this task if the employee worked at a 25 percent faster pace than average and an allowance of 20 percent of job time is used?

·         Question 14

3 out of 3 points

A disadvantage of teams is:

·         Question 15

3 out of 3 points

A methods and measurements analyst for Timepiece, Inc., needs to develop a time standard for the task of attaching a watch to a wristband. In a preliminary study, he observed one of his workers perform this task five times, with the following results:

What is the standard time for this task if the employee worked at a 20 percent faster pace than average, and an allowance of 20s percent of job time is used?

·         Question 16

3 out of 3 points

In regards to supply chain management and the location decision, a primary challenge is to address _______________ distribution.

·         Question 17

3 out of 3 points

The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows:

What would be total annual costs for either location at the point of indifference?

·         Question 18

3 out of 3 points

A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows:

What would be the total annual costs at the point of indifference?

·         Question 19

3 out of 3 points

The method for evaluating location alternatives that uses their total cost curves is:

·         Question 20

3 out of 3 points

Which of the following is not a location option that management can consider in location planning?

·         Question 21

3 out of 3 points

An example of an external factor that influences effective capacity is government safety regulations.

·         Question 22

3 out of 3 points

Information technology refers to competitive data.

·         Question 23

3 out of 3 points

Work sampling can be used to estimate the proportion of time a machine is idle.

·         Question 24

3 out of 3 points

Web-based, retail businesses should be located near the customer to reduce their long distance phone charges.

·         Question 25

3 out of 3 points

Location decisions are basically one-time decisions usually made by new organizations.

Question 1 Sensitivity analysis is required because:

Question 2 The operations manager for a well­drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long­run profits (in $000) will vary with the amount of precipitation (rainfall) as follows: If he uses the maximax criterion, which alternative will he decide to select?

Question 3 The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. He figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for $125. What would the potential profit be if he were to split 4,000 cords of wood with this machine?

Question 4 One local hospital has just enough space and funds currently available to start either a cancer or heart research lab. If administration decides on the cancer lab, there is a 20 percent chance of getting $100,000 in outside funding from the American Cancer Society next year, and an 80 percent chance of getting nothing. If the cancer research lab is funded the first year, no additional outside funding will be available the second year. However, if it is not funded the first year, then management estimates the chances are 50 percent it will get $100,000 the following year, and 50 percent that it will get nothing again. If, however, the hospital's management decides to go with the heart lab, then there is a 50 percent chance of getting $50,000 in outside funding from the American Heart Association the first year and a 50 percent change of getting nothing. If the heart lab is funded the first year, management estimates a 40 percent chance of getting another $50,000 and a 60 percent chance of getting nothing additional the second year. If it is not funded the first year, then management estimates a 60 percent chance for getting $50,000 and a 40 percent chance for getting nothing in the following year. For both the cancer and heart research labs, no further possible funding is anticipated beyond the first two years. What is the expected value for the decision alternative to select the cancer lab?

Question 5 Consider the following decision scenario: *PV for profits ($000) If P(high) is .60, the choice for maximum expected value would be:

Question 6 Daily capacity of a product layout is determined by:

Question 7 The type of processing system which is used for highly standardized products is:

Question 8 Product profiling links key product or service requirements to:

Question 9 A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load meter moved. An analyst has prepared the following flow and distance matrices: What is the layout that will minimize the total distance loads will be moved each week?

Question 10 In which type of processing system would gasoline be produced from crude oil?

Question 11 Suppose the first unit of output required 900 labor hours, and the second unit required only 810. At this rate, how many more units must be produced before labor requirements are less than 700 hours?

Question 12 A manager wants to analyze the learning curve associated with producing one of his company's products. Accordingly, he has gathered the following data: What is the learning curve percentage?

Question 13 The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, she observed one of her workers perform this task six times, with the following results: How many observations should be made if she wants to be 95.44 percent confident that the maximum error in the observed time is two seconds? Assume that the standard deviation of the task time is six seconds.

Question 14 A manager wants to analyze the learning curve associated with producing one of his company's products. Accordingly, he has gathered the following data: Approximately how long will it take to produce the fifth through tenth units?

Question 15 Determining the number of cycles to observe is an element of:

Question 16 Which of the following is least important as a consideration for a firm at the beginning of a supply chain?

Question 17 Suppose a decision maker is confronted with the following transportation model scenario: What is the total cost of the optimal solution?

Question 18 For service firms such as banks and supermarkets, location decisions are critical elements of __________ strategy.

Question 19 Which of the following is the last step in the procedure for making location decisions?

Question 20 The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows: What would be the total annual costs for the Alpha Ave. location with 20 persons living there?

Question 21 The break­even quantity can be determined by dividing the fixed costs by the difference between the revenue per unit and the variable cost per unit.

Question 22 A cafeteria line would be an example of a process­focused layout.

Question 23 Ergonomics is an important part of job design to consider when we automate the system.

Question 24 For service organizations, the dominant factors in location analysis usually are marketrelated.

Question 25 A strategy that emphasizes convenience for the customers would probably select a single very large facility.

1. Decision trees, with their predetermined analysis of a situation, are really not useful in making health care decisions since every person is unique. 
True    False

 2. Bounded rationality refers to the limits imposed on decision-making because of costs, human abilities, time, technology, and/or availability of information. 
True    False

 3. In reaching a decision, the alternative with the lowest cost should be ranked #1. 
True    False

 4. The expected monetary value approach is most appropriate when the decision-maker is risk-neutral. 
True    False

 5. The value of perfect information is inversely related to losses predicted. 
True    False

 6. Expected monetary value gives the long-run average payoff if a large number of identical decisions could be made. 
True    False

 7. Among decision environments, risk implies that certain parameters have probabilistic outcomes. 
True    False

 8. Among decision environments, uncertainty implies that states of nature have wide ranging probabilities associated with them. 
True    False

 9. In decision theory, states of nature refer to possible future conditions. 
True    False

 10. The maximin approach involves choosing the alternative with the highest payoff. 
True    False

 11. The maximin approach involves choosing the alternative that has the "best worst" payoff. 
True    False

 12. The Laplace criterion treats states of nature as being equally likely. 
True    False

 13. The maximax approach is a pessimistic strategy. 
True    False

 14. A weakness of the maximin approach is that it loses some information. 
True    False

 15. The expected value approach applies to decision-making under uncertainty. 
True    False

 16. The expected value approach is used for decision-making under risk. 
True    False

 17. The EVPI indicates an upper limit on the amount a decision-maker should be willing to spend to obtain additional information. 
True    False

 18. Graphical sensitivity analysis is limited to cases with no more than two alternatives. 
True    False

 19. Graphical sensitivity analysis is used for decision-making under risk. 
True    False

 20. An advantage of decision trees compared to payoff tables is that they permit us to analyze situations involving sequential decisions. 
True    False

 21. The term sub-optimization is best described as the: 
A. result of individual departments making the best decisions for their own areas
B. limitations on decision-making caused by costs and time
C. result of failure to adhere to the steps in the decision process
D. result of ignoring symptoms of the problem
E. none of the above

 22. Which phrase best describes the term bounded rationality? 
A. thinking a problem through clearly before acting
B. taking care not to exhaust limited resources
C. the result of departmentalized decision making
D. limits imposed on decision making by costs, time, and technology
E. the use of extremely structured steps in the decision making process

 23. Testing how a problem solution reacts to changes in one or more of the model parameters is called: 
A. simulation
B. sensitivity analysis
C. priority recognition
D. analysis of variance
E. decision analysis

 24. Sensitivity analysis is required because _______. 
A. payoffs and probabilities are estimates
B. most decision will affect employees
C. expected payoffs are sensitive to the time value of money
D. it's the second step in the decision model
E. with the passage of time, small decisions get bigger

 25. A tabular presentation that shows the outcome for each decision alternative under the various possible states of nature is called a/an: 
A. payoff table
B. feasible region
C. Laplace table
D. decision tree
E. payback period matrix

 26. Which of the following characterizes decision-making under uncertainty? 
A. Decision-makers must rely on probabilities in assessing outcomes.
B. The likelihood of possible future events is unknown.
C. Relevant parameters have known values.
D. Certain parameters have probabilistic outcomes.
E. none of the above

 27. Which of the following is not an approach for decision-making under uncertainty? 
A. decision trees
B. maximin
C. maximax
D. minimax regret
E. Laplace

 28. Determining the worst payoff for each alternative and choosing the alternative with the "best worst" is the approach called: 
A. minimin
B. maximin
C. maximax
D. minimax regret
E. Laplace

 29. Determining the average payoff for each alternative and choosing the alternative with the highest average is the approach called: 
A. minimin
B. maximin
C. maximax
D. minimax regret
E. Laplace

 30. The maximin approach to decision-making refers to: 
A. minimizing the maximum return
B. maximizing the minimum return
C. maximizing the minimum expected value
D. choosing the alternative with the highest payoff
E. choosing the alternative with the minimum payoff

 31. Which one of these is not used in decision-making under risk? 
A. EVPI
B. EMV
C. decision trees
D. minimax regret
E. All are used for risk situations.

 32. The term opportunity loss or regret is most closely associated with: 
A. minimax regret
B. maximax
C. maximin
D. expected monetary value
E. Laplace

 33. The expected monetary value criterion (EMV) is the decision-making approach used with the decision environment of: 
A. certainty
B. risk
C. uncertainty
D. all of the above
E. none of the above

 34. A decision tree is: 
A. an algebraic representation of alternatives
B. a behavioral representation of alternatives
C. a matrix representation of alternatives
D. a schematic representation of alternatives
E. limited to a maximum of 12 branches

 35. The difference between expected payoff under certainty and expected payoff under risk is the expected: 
A. monetary value
B. value of perfect information
C. net present value
D. rate of return
E. profit

 36. If the minimum expected regret is computed, it indicates to a decision-maker the expected: 
A. value of perfect information
B. payoff under certainty
C. monetary value
D. payoff under risk
E. none of the above

 37. The term sensitivity analysis is most closely associated with: 
A. maximax
B. maximin
C. decision-making under risk
D. minimax regret
E. Laplace criterion

 38. A manager has developed the following payoff table that indicates the profits associated with a set of alternatives under two possible states of nature.
  
Answer the following questions:
(A) If the manager uses maximin as the decision criterion, which of the alternatives would be indicated?
(B) If the manager uses minimax regret as the criterion, which alternative would be indicated?
(C) Determine the expected value of perfect information if P(S2) = .40.
(D) Determine the range of P(S2) for which each alternative would be optimal. 

39. A manager's staff has compiled the information below which pertains to four capacity alternatives under four states of nature. Values in the matrix are present value in thousands of dollars.
  
(A) Assuming a maximax strategy, which alternative would be chosen?
(B) If maximin were used, which alternative would be chosen?
(C) If states of nature are equally likely and an expected value criterion of maximization is used, which alternative would be chosen? 

40. A manager has learned that annual profits from four alternatives being considered for solving a capacity problem are projected to be $15,000 for A, $30,000 for B, $45,000 for C, and $60,000 for D if state of nature 1 occurs; and $60,000 for A, $80,000 for B, $90,000 for C, and $35,000 for D if state of nature 2 occurs.
(A) Assuming maximax is used, what alternative would be chosen?
(B) Assuming maximin is used, what alternative would be chosen?
(C) If P(State of Nature 1) is .40, what alternative has the highest expected monetary value?
(D) Determine the range of P(S2) for which each alternative would be optimal. 

41. A manager is quite concerned about the recent deterioration of a section of the roof on a building that houses her firm's computer operations. According to her assistant there are three options which merit consideration: A, B, and C. Moreover, there are three possible future conditions that must be included in the analysis: I, which has a probability of occurrence of .5; II, which has a probability of .3; and III, which has a probability of .2.
If condition I materializes, A will cost $12,000, B will cost $20,000, and C will cost $16,000. If condition II materializes, the costs will be $15,000 for A, $18,000 for B, and $14,000 for C. If condition III materializes, the costs will be $10,000 for A, $15,000 for B, and $19,000 for C.
(A) Draw a decision tree for this problem.
(B) Using expected monetary value, which alternative should be chosen? 

   
*PV for profits ($000)

 42. The maximax strategy would be: 
A. buy
B. lease
C. rent
D. high
E. low

 43. The maximin strategy would be: 
A. buy
B. lease
C. rent
D. high
E. low

 44. The minimax regret strategy would be: 
A. buy
B. lease
C. rent
D. high
E. low

 45. If P(high) is .60, the choice for maximum expected value would be: 
A. buy
B. lease
C. rent
D. high
E. low

    
*PV for profits ($000)

 46. The maximax strategy would be: 
A. small
B. Medium
C. med.-large
D. large
E. ex-large

 47. The maximin strategy would be: 
A. small
B. Medium
C. med.-large
D. large
E. ex-large

 48. The minimax regret strategy would be: 
A. small
B. Medium
C. med.-large
D. large
E. ex-large

 49. If yes and no are equally likely, which alternative has the largest expected monetary value? 
A. small
B. Medium
C. med.-large
D. large
E. ex-large

    
*PV for profits ($000)

 50. The maximax strategy would be: 
A. A
B. B
C. C
D. D
E. E

 51. The maximin strategy would be: 
A. A
B. B
C. C
D. D
E. E

 52. The minimax regret strategy would be: 
A. A
B. B
C. C
D. D
E. E

 53. With equally likely states of nature, the alternative that has the largest expected monetary value is: 
A. A
B. B
C. C
D. D
E. E

  The new owner of a beauty shop is trying to decide whether to hire one, two, or three beauticians. She estimates that profits next year (in thousands of dollars) will vary with demand for her services and has estimated demand in three categories low, medium and high
  

 54. If she uses the maximax criterion, how many beauticians will she decide to hire? 
A. one
B. two
C. three
D. either one or two
E. either two or three

 55. If she uses the Laplace criterion, how many beauticians will she decide to hire? 
A. one
B. two
C. three
D. either one or two
E. either two or three

 56. If she uses the minimax regret criterion, how many beauticians will she decide to hire? 
A. one
B. two
C. three
D. either one or two
E. either two or three

 57. If she feels the chances of low, medium, and high demand are 50%, 20%, and 30% respectively, what are the expected annual profits for the number of beauticians she will decide to hire? 
A. $54,000
B. $55,000
C. $70,000
D. $80,000
E. $135,000

 58. If she feels the chances of low, medium, and high demand are 50%, 20%, and 30% respectively, what is her expected value of perfect information? 
A. $54,000
B. $55,000
C. $70,000
D. $80,000
E. $135,000

  The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, moderate, or high, as follows:
  

 59. If he uses the maximin criterion, which size bus will he decide to purchase? 
A. small
B. Medium
C. large
D. either small or Medium
E. either medium or large

 60. If he uses the Laplace criterion, which size bus will he decide to purchase? 
A. small
B. Medium
C. large
D. either small or Medium
E. either medium or large

 61. If he uses the minimax regret criterion, which size bus will he decide to purchase? 
A. small
B. Medium
C. large
D. either small or Medium
E. either medium or large

 62. If he feels the chances of low, moderate, and high demand are 30%, 30%, and 40% respectively, what is the expected annual profit for the bus that he will decide to purchase? 
A. $15,000
B. $61,000
C. $69,000
D. $72,000
E. $87,000

 63. If he feels the chances of low, moderate, and high demand are 30%, 30%, and 40% respectively, what is his expected value of perfect information? 
A. $15,000
B. $61,000
C. $69,000
D. $72,000
E. $87,000

  The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows:
  

 64. If he uses the maximax criterion, which alternative will he decide to select? 
A. do nothing
B. expand
C. build new
D. either do nothing or expand
E. either expand or build new

 65. If he uses the Laplace criterion, which alternative will he decide to select? 
A. do nothing
B. expand
C. build new
D. either do nothing or expand
E. either expand or build new

 66. If he uses the minimax regret criterion, which alternative will he decide to select? 
A. do nothing
B. expand
C. build new
D. either do nothing or expand
E. either expand or build new

 67. If he feels the chances of low, normal, and high precipitation are 30%, 20%, and 50% respectively, what are expected long-run profits for the alternative he will select? 
A. $140,000
B. $170,000
C. $285,000
D. $305,000
E. $475,000

 68. If he feels the chances of low, normal, and high precipitation are 30%, 20%, and 50% respectively, what is his expected value of perfect information? 
A. $140,000
B. $170,000
C. $285,000
D. $305,000
E. $475,000

  The local operations manager for the Internal Revenue Service must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. She estimates that net revenues (in thousands of dollars) will vary with how well taxpayers comply with the new tax code just passed by Congress, as follows:
  

 69. If she uses the maximin criterion, how many new examiners will she decide to hire? 
A. one
B. two
C. three
D. either one or two
E. either two or three

 70. If she uses the Laplace criterion, how many new examiners will she decide to hire? 
A. one
B. two
C. three
D. either one or two
E. either two or three

71. If she uses the minimax regret criterion, how many new examiners will she decide to hire? 
A. one
B. two
C. three
D. either one or two
E. either two or three

 72. If she feels the chances of low, medium, and high compliance are 20%, 30%, and 50% respectively, what are the expected net revenues for the number of assistants she will decide to hire? 
A. $26,000
B. $46,000
C. $48,000
D. $50,000
E. $76,000

 73. If she feels the chances of low, medium, and high compliance are 20%, 30%, and 50% respectively, what is her expected value of perfect information? 
A. $16,000
B. $26,000
C. $46,000
D. $48,000
E. $50,000

  The construction manager for Acme Construction, Inc. must decide whether to build single-family homes, apartments, or condominiums. He estimates annual profits (in $000) will vary with the population trend as follows:
  

 74. If he uses the maximin criterion, which kind of dwellings will he decide to build? 
A. single family
B. apartments
C. condominiums
D. either single family or apartments
E. either apartments or condos

 75. If he uses the Laplace criterion, which kind of dwellings will he decide to build? 
A. single family
B. apartments
C. condos
D. either single family or apartments
E. either apartments or condos

 76. If he uses the minimax regret criterion, which kind of dwellings will he decide to build? 
A. single family
B. apartments
C. condos
D. either single family or apartments
E. either apartments or condos

 77. If he feels the chances of declining, stable, and growing population trends are 40%, 50%, and 10%, respectively, which kind of houses will he decide to build? 
A. single family
B. apartments
C. condos
D. either single family or apartments
E. either apartments or condos

 78. If he feels the chances of declining, stable, and growing population trends are 40%, 50%, and 10%, respectively, what is his expected value of perfect information? 
A. $187,000
B. $132,000
C. $123,000
D. $65,000
E. $55,000

  The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows:
  

 79. If she uses the maximax criterion, what size outlet will she decide to lease? 
A. small
B. Medium
C. large
D. either small or Medium
E. either medium or large

 80. If she uses the maximin criterion, what size outlet will she decide to lease? 
A. small
B. Medium
C. large
D. either small or Medium
E. either medium or large

 81. If she uses the Laplace criterion, what size outlet will she decide to lease? 
A. small
B. Medium
C. large
D. either small or Medium
E. either medium or large

 82. If she uses the minimax regret criterion, what size outlet will she decide to lease? 
A. small
B. Medium
C. large
D. either small or Medium
E. either medium or large

 83. If she feels there is a 30% chance that demand will be high, what are the expected monthly profits for the outlet she will decide to lease? 
A. $1,600
B. $1,100
C. $1,000
D. $900
E. $500

 84. If she feels there is a 30% chance that demand will be high, what is her expected payoff under certainty? 
A. $1,600
B. $1,100
C. $1,000
D. $900
E. $500

 85. If she feels there is a 30% chance that demand will be high, what is her expected value of perfect information? 
A. $1,600
B. $1,100
C. $1,000
D. $900
E. $500

 86. For what range of probability that demand will be high, will she decide to lease the small facility? 
A. 0 - .25
B. 0 - .33
C. .25 - .5
D. .33 - 1
E. .5 - 1

 87. For what range of probability that demand will be high, will she decide to lease the medium facility? 
A. 0 - .25
B. 0 - .33
C. .25 - .5
D. .33 - 1
E. .5 - 1

 88. For what range of probability that demand will be high, will she decide to lease the large facility? 
A. 0 - .25
B. 0 - .33
C. .25 - .5
D. .33 - 1
E. .5 - 1

  The advertising manager for Roadside Restaurants, Inc. needs to decide whether to spend this month's budget for advertising on print media, television, or a mixture of the two. She estimates that the cost per thousand "hits" (readers or viewers) will vary depending upon the success of the new cable television network she plans to use, as follows:
  

 89. If she uses the maximax criterion, which advertising strategy will she use? 
A. print
B. mixed
C. television
D. either print or mixed
E. either mixed or television

 90. If she uses the maximin criterion, which advertising strategy will she use? 
A. print
B. mixed
C. television
D. either print or mixed
E. either mixed or television

 91. If she uses the Laplace criterion, which advertising strategy will she use? 
A. print
B. mixed
C. television
D. either print or mixed