1. (1 pt) During World War II, many new scientific and quantitative techniques
were developed to assist the military, and these developments were so successful
that many companies started using similar techniques in managerial decision
making and planning after the war.
a.
True
b.
False
2. (1 pt) Testing the data and model should be done before the results have been
analyzed.
a.
True
b.
False
b.
False
3. (1 pt) The decision maker cannot control states of nature.
a.
True
4. (1 pt) The difference in decision making under risk and decision making under
uncertainty is that under risk, we think we know the probabilities of the states of
nature, while under uncertainty we do not know the probabilities of the states of
nature
a.
True
b.
False
5. (1 pt) When using the EOL as a decision criterion, the best decision is the
alternative with the largest EOL value.
a.
True
b.
False
6. (4 pt) The following is an opportunity-loss table.
The probabilities for the states of nature A, B, and C are 0.3, 0.5, and 0.2,
respectively. If a person were to use the expected opportunity loss criterion, what
decision would be made?
a. Alternative 1
b. Alternative 2
d. State of Nature B
c. Alternative 3
e. State of Nature C
7. (1 pt) The three categories of forecasting models are time series, quantitative,
and qualitative.
a. True
b. False
8. (1 pt) Mean absolute deviation (MAD) is simply the sum of forecast errors
a. True
b. False
9. (1 pt) When the smoothing constant α = 0, the exponential smoothing model is
equivalent to the naïve forecasting model.
a. True
b. False
10. (1 pt) A seasonal index must be between -1 and +1.
a. True
b. False
11. (2 pt) Which of the following is not classified as a qualitative forecasting
model?
a. Delphi method
b. Sales force composite
d. exponential smoothing
c. jury of executive opinion
e. consumer market survey
12. (2 pt) Utility values typically range from
a. 1 to 100
b. 1 to 10
c. 0 to 1
d. -1 to 1
e. None of the above
13. (3 pt) Given the following two-person game, which strategy can be
eliminated by use of dominance?
a. X2
b. Y1
c. Y2
d. X3
e. X1
PART II: WRITING: (80%)
Question 1: (15 pts)
In a fighting video game, there are two characters, Human and Orc. Human can
use three types of weapons: Sword, Spear and Bow in the fighting match. Orc
can use only two types of Sword and Spear. The amount of winning points of a
character will be the amount of lost points of the other for each match.
If both Human and Orc use Swords, Human will win 3 points.
If Human uses Sword and Orc uses Spear, Orc will win 2 points.
In case Human uses Spear and Orc uses Sword, Human can get 5 points in match.
In case both use Spears, Human will lose 1 point.
When Human uses Bow, it will get 4 points if Orc uses Spear and lose 2 points if
Orc uses Sword.
a) Develop the payoff table for this game? (6pts)
b) What is the value of the game?
Question 2: (20 pts)
The numbers of deaths due to traffic accidents in a province are shown in
following table:
a) Forecast the number of death for quarter 1 of next year (year 4) by
using Exponential smoothing with two smoothing constants of 0.20 and
0.40, assuming Y1 / Q1 forecast of 30 deaths. Which smoothing constant
is better?
b) Determine the seasonal index for each quarter by using centered
moving average (CMA) approach.
Question 3: (30 pts)
Wal-Mart Corp. intends to set up a chain of retailers in Vietnam . Before
starting the business in Vietnam, they recognized that Coop-Mart will be
the biggest competitor. And they consider two options: establish a huge retailer
system all over Vietnam from Northern to Southern (Large system) or build some
middle-size supermarkets in two biggest cities Hanoi and Ho Chi Minh City
(Small System). If the competition from Coop is strong, they think that
they can earn only $20 million dollars for a small system but lose $50 million
dollars for large system. In case the competition is weak, they will get $500
million dollars for the large system and $200 million dollars for a small one.
Actually, they can give up Vietnam, do nothing and earn nothing. In the
beginning, they believe the probability of strong competition is only 40%.
a) Develop the payoff table for Wal-Mart. Determine the best alternative
based on EMV comparison.
b) Wal-Mart is willing to pay $20 million dollars to get complete
information about the competitive ability of Coop-Mart. They have
known that if the ability of Coop is really strong, their report will
indicate correctly (strong competition) with probability of 80%.
Otherwise, in case Coop is not strong enough, the report will show the
correct result (weak competition) with the probability of 90%.
- Draw the decision tree for Wal-Mart. (Compute the revised
probabilities needed to complete the decision, and place these values in
the decision tree)
- What should they do?
- Determine the maximum of cost they are willing to pay for this
information.