Management Decision Making

_____________ is a set of constraints that requires all variables to be

nonnegative.

• Linear program

• Nonnegativity constraints

• Linear functions

• Slack variable

_________ is a constraint that does not affect the feasible region. If a constraint

is redundant, it can be removed from the problem without affecting the feasible region

• Redundant constraint

• Problem formulation

• Slack variable

• Unbounded

_______ is a representation of a real object or situation.

• Marginal revenue

• Infeasible solution

• A model

• Optimal solution

__________ are the environmental factors or inputs that cannot be controlled by

the decision maker.

• Uncontrollable inputs

• Controllable inputs

• Breakeven point

• Analog model

__________ is an approach to multicriteria decision making based

on pairwise comparisons for elements in a hierarchy

• Target value

• Scoring model

• Normalized pairwise comparison matrix

• Analytic hierarchy process (AHP)

___________ is an approach to multicriteria decision making that requires the user to assign weights to each criterion that describe the criterion’s relative importance and to assign a rating that shows how well each decision alternative satisfies each criterion. The output is a score for each decision alternative.

• Hierarchy

• Scoring model

• Preemptive priorities

• Goal programming

___________ is an approach to choosing a decision alternative without using probabilities. For each alternative, the maximum regret is computed, which leads to choosing the decision alternative that minimizes the maximum regret

• Influence diagram

• Joint probabilities

• Minimax regret approach

• Payoff

_________ is an approach to choosing a decision alternative without using probabilities.

For a maximization problem, it leads to choosing the decision alternative corresponding

to the largest payoff; for a minimization problem, it leads to choosing the decision

alternative corresponding to the smallest payoff.

• Minimax regret approach

• Conservative approach

• Decision tree

• Optimistic approach

_________ is a graphical device that shows the relationship among decisions,

chance events, and consequences for a decision problem.

• Influence diagram

• Joint probabilities

• Expected utility

• Decision tree

__________________ is the expected value of information that would tell the decision maker exactly which state of nature is going to occur (i.e., perfect information)

• Expected value (EV)

• Expected value approach

• Expected value of perfect information (EVPI)

• Expected value of sample information (EVSI)