**An aggressive decision maker would prefer the minimax regret**

1)An aggressive decision maker would prefer the minimax regret criterion over the maximin criterion. T/F

2)The expected value criterion ignores the decision maker’s attitude toward risk. T/F

3)Which of the following criteria represents an aggressive/optimistic approach?

a. maximin

b. maximax

c. expected value

d. minimax regret

4)The states of nature in a payoff table should be mutually exclusive and collectively exhaustive. T/F

5)A stationary forecasting model is appropriate for a time series which exhibits primarily:

a. trend

b. cyclical components

c. random variation

d. seasonal components

6)In the exponential smoothing (ES) technique, the value of alpha, the smoothing constant:

a. is preset by the analyst and not subject to validity testing.

b. typically is at the higher end in the range of possible values.

c. may assume any non-negative value.

d. determines the forecasting model's responsiveness to abrupt changes.

7)June forecast: 71. June actual: 68. Alpha = 1.0. July's

exponentially smoothed forecast is:

a. 70

b. 64

c. 66

d. 68

8) The "weights" in the weighted moving average method are unequal and typically decrease with the age of the observation.

T/F

9) see attachment with picture

10) RDN’s sales of cable modem in San Mateo, California, for the months of January through April were as follows: January – 50, February - 80, March - 70, and April - 60. Suppose exponential smoothing is used with a smoothing constant, alpha, of .20. If the forecast for January was 50, the forecast for May would be approximately:

a. 55

b. 59

c. 57

d. 61

**Category:**Business, General Business

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