IS 303 FINAL EXAM | QUESTIONS AND ANSWERS | VERIFIED
ANSWERS (100% CORRECT) | LATEST EXAM UPDATE
A tabular presentation that shows the outcome for each decision alternative under
the various states of nature is called: A) a payback period matrix. B) a payoff table.
C) a decision tree. D) a decision matrix. - CORRECT ANSWER - B
Diff: 1
Keywords: payoff
The difference between expected payoff under certainty and expected value of the
best act without certainty is the:
A) expected monetary value. B) expected value of perfect information.
C) expected rate of return. D) expected net present value. - CORRECT ANSWER - B
Diff: 1
Keywords: expected value of perfect information
A company that manufactures designer jeans is contemplating whether to increase
its advertising budget by $1 million for next year. If the expanded advertising
campaign is successful, the company expects sales to increase by $1.6 million next
year. If the advertising campaign fails, the company expects sales to increase by
only $400,000 next year. If the advertising budget is not increased, the company
expects sales to increase by $200,000. Identify the states of nature in this decision
making problem. A) Two possibilities: (1) campaign is successful and (2)
campaign is not successful. B) The increase in sales dollars next year.
,C) Two choices: (1) increase the budget and (2) do not increase the budget. D)
Four consequences resulting from the Increase/Do Not Increase and
Successful/Not Successful combinations. - CORRECT ANSWER - A
Diff: 1
Keywords: states of the world
A company that manufactures designer jeans is contemplating whether to increase
its advertising budget by $1 million for next year. If the expanded advertising
campaign is successful, the company expects sales to increase by $1.6 million next
year. If the advertising campaign fails, the company expects sales to increase by
only $400,000 next year. If the advertising budget is not increased, the company
expects sales to increase by $200,000. Identify the actions in this decision making
problem. A) Two choices: (1) increase the budget and (2) do not increase the
budget. B) The increase in sales dollars next year. C) Four consequences resulting
from the Increase/Do Not Increase and Successful/Not Successful combinations.
D) Two possibilities: (1) campaign is successful and (2) campaign is not
successful. - CORRECT ANSWER - A
Diff: 1
Keywords: courses of action
A company that manufactures designer jeans is contemplating whether to increase
its advertising budget by $1 million for next year. If the expanded advertising
campaign is successful, the company expects sales to increase by $1.6 million next
year. If the advertising campaign fails, the company expects sales to increase by
only $400,000 next year. If the advertising budget is not increased, the company
expects sales to increase by $200,000. Identify the outcomes in this decision
making problem. A) Four consequences resulting from the Increase/Do Not
Increase and Successful/Not Successful combinations. B) Two choices: (1)
increase the budget and (2) do not increase the budget.
C) Two possibilities: (1) campaign is successful and (2) campaign is not
successful. D) The increase in sales dollars next year. - CORRECT ANSWER - A
, Diff: 1
Keywords: outcomes
A company that manufactures designer jeans is contemplating whether to increase
its advertising budget by $1 million for next year. If the expanded advertising
campaign is successful, the company expects sales to increase by $1.6 million next
year. If the advertising campaign fails, the company expects sales to increase by
only $400,000 next year. If the advertising budget is not increased, the company
expects sales to increase by $200,000. Identify the objective in this decision
making problem.
A) Four consequences resulting from the Increase/Do Not Increase and
Successful/Not Successful combinations. B) The increase in sales dollars next year.
C) Two choices: (1) increase the budget and (2) do not increase the budget. D) Two
possibilities: (1) campaign is successful and (2) campaign is not successful. -
CORRECT ANSWER - B
Diff: 1
Keywords: objective
The following payoff table shows profits associated with a set of 3 alternatives
under 2 possible states of nature.
States A1 A2 A3
1 12 -2 8
2 4 10 5
where: S1 is state of nature 1 A1 is action alternative 1 S2 is state of nature 2 A2 is
action alternative 2 A3 is action alternative 3
Referring to Table 17-1, the opportunity loss for A3 when S2 occurs is
ANSWERS (100% CORRECT) | LATEST EXAM UPDATE
A tabular presentation that shows the outcome for each decision alternative under
the various states of nature is called: A) a payback period matrix. B) a payoff table.
C) a decision tree. D) a decision matrix. - CORRECT ANSWER - B
Diff: 1
Keywords: payoff
The difference between expected payoff under certainty and expected value of the
best act without certainty is the:
A) expected monetary value. B) expected value of perfect information.
C) expected rate of return. D) expected net present value. - CORRECT ANSWER - B
Diff: 1
Keywords: expected value of perfect information
A company that manufactures designer jeans is contemplating whether to increase
its advertising budget by $1 million for next year. If the expanded advertising
campaign is successful, the company expects sales to increase by $1.6 million next
year. If the advertising campaign fails, the company expects sales to increase by
only $400,000 next year. If the advertising budget is not increased, the company
expects sales to increase by $200,000. Identify the states of nature in this decision
making problem. A) Two possibilities: (1) campaign is successful and (2)
campaign is not successful. B) The increase in sales dollars next year.
,C) Two choices: (1) increase the budget and (2) do not increase the budget. D)
Four consequences resulting from the Increase/Do Not Increase and
Successful/Not Successful combinations. - CORRECT ANSWER - A
Diff: 1
Keywords: states of the world
A company that manufactures designer jeans is contemplating whether to increase
its advertising budget by $1 million for next year. If the expanded advertising
campaign is successful, the company expects sales to increase by $1.6 million next
year. If the advertising campaign fails, the company expects sales to increase by
only $400,000 next year. If the advertising budget is not increased, the company
expects sales to increase by $200,000. Identify the actions in this decision making
problem. A) Two choices: (1) increase the budget and (2) do not increase the
budget. B) The increase in sales dollars next year. C) Four consequences resulting
from the Increase/Do Not Increase and Successful/Not Successful combinations.
D) Two possibilities: (1) campaign is successful and (2) campaign is not
successful. - CORRECT ANSWER - A
Diff: 1
Keywords: courses of action
A company that manufactures designer jeans is contemplating whether to increase
its advertising budget by $1 million for next year. If the expanded advertising
campaign is successful, the company expects sales to increase by $1.6 million next
year. If the advertising campaign fails, the company expects sales to increase by
only $400,000 next year. If the advertising budget is not increased, the company
expects sales to increase by $200,000. Identify the outcomes in this decision
making problem. A) Four consequences resulting from the Increase/Do Not
Increase and Successful/Not Successful combinations. B) Two choices: (1)
increase the budget and (2) do not increase the budget.
C) Two possibilities: (1) campaign is successful and (2) campaign is not
successful. D) The increase in sales dollars next year. - CORRECT ANSWER - A
, Diff: 1
Keywords: outcomes
A company that manufactures designer jeans is contemplating whether to increase
its advertising budget by $1 million for next year. If the expanded advertising
campaign is successful, the company expects sales to increase by $1.6 million next
year. If the advertising campaign fails, the company expects sales to increase by
only $400,000 next year. If the advertising budget is not increased, the company
expects sales to increase by $200,000. Identify the objective in this decision
making problem.
A) Four consequences resulting from the Increase/Do Not Increase and
Successful/Not Successful combinations. B) The increase in sales dollars next year.
C) Two choices: (1) increase the budget and (2) do not increase the budget. D) Two
possibilities: (1) campaign is successful and (2) campaign is not successful. -
CORRECT ANSWER - B
Diff: 1
Keywords: objective
The following payoff table shows profits associated with a set of 3 alternatives
under 2 possible states of nature.
States A1 A2 A3
1 12 -2 8
2 4 10 5
where: S1 is state of nature 1 A1 is action alternative 1 S2 is state of nature 2 A2 is
action alternative 2 A3 is action alternative 3
Referring to Table 17-1, the opportunity loss for A3 when S2 occurs is
