BUSINESS ANALYTICS: CHAPTER 15 – DECISION ANALYSIS

The uncontrollable future events that affect the outcome of a decision are known as

a.

alternatives

b.

decision outcomes

c.

payoffs

d.

states of nature

d.

states of nature

A tabular representation of gains or losses for a decision problem is called a

a.

decision tree

b.

payoff table

c.

sequential matrix

d.

probability table

b.

payoff table

A graphic presentation of the expected gain from the various options open to the decision maker is called

a.

a payoff table

b.

a decision tree

c.

the expected opportunity loss

d.

the expected value of perfect information

b.

a decision tree

Nodes of a decision tree indicating points where a decision maker chooses a decision alternative are known as

a.

decision nodes

b.

chance nodes

c.

marginal nodes

d.

conditional nodes

a.

decision nodes

Nodes of a decision tree indicating points where the outcomes do not depend on a decision maker are known as

a.

decision nodes

b.

chance nodes

c.

marginal nodes

d.

conditional nodes

b.

chance nodes

Prior probabilities are the probabilities of the states of nature that are estimated

a.

after obtaining sample information

b.

before obtaining perfect information

c.

before obtaining sample information

d.

after obtaining perfect information

c.

before obtaining sample information

The probabilities of states of nature after revising the prior probabilities based on given sample information are called

a.

the expected probabilities

b.

the posterior probabilities

c.

the prior probabilities

d.

the unconditional probabilities

b.

the posterior probabilities