Which of the following is true about sensitivity analysis? O Sensitivity analysis determines which probability estimates to use in order to make the best possible decision among alternatives. O Sensitivity analysis determines which regret strategy (minimax, maximax, or maximin) should be used. O The rankings of the decision alternatives are frequently not highly sensitive to changes within a plausible range for probability estimates. O Sensitivity analysis is another term for the decision tree technique.

Which of the following is true about sensitivity analysis? O Sensitivity analysis determines which probability estimates to use in order to make the best possible decision among alternatives. O Sensitivity analysis determines which regret strategy (minimax, maximax, or maximin) should be used. O The rankings of the decision alternatives are frequently not highly sensitive to changes within a plausible range for probability estimates. O Sensitivity analysis is another term for the decision tree technique.

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 1P

See similar textbooks

Similar questions

When we work with the breakeven point, how important is it to understand what a decision variable is? How is it different from a regular variable?
What are the steps in computing the cost of a prediction error when using the EOQ decision model?
This is is used to check the effect on the recommendations of a model if the estimates turn out to be wrong (say by changing the values of the parameters). Decision analysis O Predictive analysis O What-if analysis O Break-even analysis
Forecasting that uses subjective analysis of subjective inputs is called O Judgmental forecast C Associative Models O Time Series O Hypothesis Testing O Descriptive Statistics
The most popular method used to calculate VaR is: Group of answer choices B. Parametric VaR D. All three methods are equal in popularity. C. Monte Carlo Analysis A. Historical Simulation
Sensitivity analysis is the analysis of the effect of parameter changes on the optimal solution. Cite an example where this sensitive analysis could be applicable.
an efficient portolio ...... 1) minimise return for a given level of risk 2) minimise risk for a given level of return 3) minimize both risk and return 4) all the options choose the correct statement
What detail would a decision maker require to analyse a dilemma with the expected value? What choices are open if the probabilities of the natural states are uncertain to the decision-maker? Can you ask about how in such a situation you might use sensitivity analysis?
Which of the following is NOT true about simulation models? Option- a. Simulations can be used to analyze processes that cannot be evaluated well analytically. b. A simulation model is used to get estimates; an analytical model provides detailed analysis. c. Simulations can use actual probability rates for both demand and service rates. d. Analytical and simulation models are often used in combination.
What is a scenario analysis? What is it designed to show, and how does it differ froma sensitivity analysis?
6. Which of the following is NOT an advantage of using sensitivity analysis? A It identifies the impact a change in an estimate would have on the result B It gives an idea of the worst possible outcome C It shows where further investigation might be useful D It provides useful information for decision making
The internal rate of return (IRR), despite its shortcomings, can be a useful analysis tool for decision makers. How is this so?