# Decision Analysis

5166 Words Nov 3rd, 2013 21 Pages
Introduction to Management Science, 10e (Taylor)
Chapter 12 Decision Analysis

1) A state of nature is an actual event that may occur in the future.
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Main Heading: Components of Decision Making
Key words: state of nature

2) A payoff table is a means of organizing a decision situation, including the payoffs from different decisions given the various states of nature.
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Main Heading: Components of Decision Making
Key words: payoff table

3) The maximax criterion results in the maximum of the maximum payoffs.
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Main Heading: Decision Making without Probabilities
Key words: maximax criterion

4) The maximin
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Main Heading: Decision Making without Probabilities
Key words: Hurwicz criterion

11) The Hurwicz criterion multiplies the best payoff by the coefficient of optimism.
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Main Heading: Decision Making without Probabilities
Key words: Hurwicz criterion

12) The Hurwicz criterion multiplies the worst payoff by the coefficient of optimism.
Diff: 1 Page Ref: 532
Main Heading: Decision Making without Probabilities
Key words: Hurwicz criterion

13) A dominant decision is one that has better payoff than another decision under each state of nature.
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Main Heading: Decision Making without Probabilities
Key words: dominant decision

14) The appropriate criterion is dependent on the risk personality and philosophy of the decision maker.
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Main Heading: Decision Making without Probabilities
Key words: decision making criteria

15) The maximax criterion is optimistic.