OPSM 3830 Midterm Exam Questions with Correct Answers Latest Update 2025/2026
Decision Theory - Answers The process of choosing the best alternative under conditions of risk
or uncertainty.
Expected Value (EV) - Answers The weighted average of all possible outcomes using their
probabilities.
Maximin Heuristic - Answers Choose the decision with the best of the worst possible payoffs
(pessimistic).
Maximax Heuristic - Answers Choose the decision with the best of the best possible payoffs
(optimistic).
Laplace Heuristic - Answers Assume all outcomes are equally likely; choose the alternative with
the highest average payoff.
Expected Value of Perfect Information (EVPI) - Answers The value of having perfect information
before making a decision; EV with perfect info minus EV without.
Decision Making under Risk - Answers Probabilities of outcomes are known.
Decision Making under Uncertainty - Answers Probabilities of outcomes are not known.
Process Strategies - Answers The methods by which an organization creates its goods or
services.
Product Layout - Answers Equipment and workstations are arranged according to product flow
(assembly line).
Process Layout - Answers Equipment is grouped by function or process type.
Fixed-Position Layout - Answers Product remains stationary; resources move to it (airplane,
shipbuilding).
Cellular Layout - Answers Combines flexibility of process layout with efficiency of product
layout.
Line Balancing - Answers Distributing tasks evenly among workstations to meet production rate
goals.
Bottleneck - Answers The slowest step or resource that limits overall system capacity.
Cycle Time - Answers The maximum time each workstation has to complete its tasks to meet
desired output.
Observed Time (OT) - Answers The average time it takes a worker to complete a task based on
direct observation.
Decision Theory - Answers The process of choosing the best alternative under conditions of risk
or uncertainty.
Expected Value (EV) - Answers The weighted average of all possible outcomes using their
probabilities.
Maximin Heuristic - Answers Choose the decision with the best of the worst possible payoffs
(pessimistic).
Maximax Heuristic - Answers Choose the decision with the best of the best possible payoffs
(optimistic).
Laplace Heuristic - Answers Assume all outcomes are equally likely; choose the alternative with
the highest average payoff.
Expected Value of Perfect Information (EVPI) - Answers The value of having perfect information
before making a decision; EV with perfect info minus EV without.
Decision Making under Risk - Answers Probabilities of outcomes are known.
Decision Making under Uncertainty - Answers Probabilities of outcomes are not known.
Process Strategies - Answers The methods by which an organization creates its goods or
services.
Product Layout - Answers Equipment and workstations are arranged according to product flow
(assembly line).
Process Layout - Answers Equipment is grouped by function or process type.
Fixed-Position Layout - Answers Product remains stationary; resources move to it (airplane,
shipbuilding).
Cellular Layout - Answers Combines flexibility of process layout with efficiency of product
layout.
Line Balancing - Answers Distributing tasks evenly among workstations to meet production rate
goals.
Bottleneck - Answers The slowest step or resource that limits overall system capacity.
Cycle Time - Answers The maximum time each workstation has to complete its tasks to meet
desired output.
Observed Time (OT) - Answers The average time it takes a worker to complete a task based on
direct observation.
