COLEGIO DE DAGUPAN

PRELIM EXAMINATION
MATH 313 Quantitative Technique in !uine
SET A
"ET A
PART I# IDENTI$ICATION# I%enti&' the ()*% )* +*)u, )& ()*% *e&e**e% t) in
each )& the &)--)(in+ tate.ent an% (*ite the -ette* that c)**e,)n% t)
')u* an(e*# /30 ,t1
A. Decision tree
B. Posterior probabilities
C. Problem solving
D. Chance nodes
E. Objective function
. !oint probabilit"
#. $egret
%. Decision
&. &conic model
!. Decision nodes
'. Prior probabilities
(. Event
). Analog model
*. Conditional probabilit"
O. Sample space
P. Probabilit"
+. Decision alternatives
$. Conse,uence nodes
S. E-periment
T. States of nature
.. *ode
/. Pa"o0 table
1. )odel
2. Constraint
3. )utuall" e-clusive
events
4. Branch
AA. Pa"o0
BB. Decision ma5ing
CC. E-pected value
DD. Optimal solution
6. A numerical measure of the li5elihood that an event 7ill occur.
8. An" process that generates 7ell9de:ned outcomes.
;. The set of all sample points <e-perimental outcomes=.
>. A collection of sample points or e-perimental outcomes.
?. Events that have no sample points in common.
@. The probabilit" of an event given another event has occurred.
A. The probabilit" of the intersection of t7o events.
B. $efers to the initial probabilities of events.
C. $evised probabilities of events based on additional information.
6D.The process of identif"ing a di0erence bet7een the actual and the desired
state of a0airs and then ta5ing action to resolve the di0erence.
66.The process of de:ning the problemE identif"ing the alternativesE determining
the criteriaE evaluating the alternatives and choosing an alternative.
68.$efers to the alternative selected.
6;.A representation of a real object or situation.
6>.A ph"sical replicaE or representationE of a real object.
6?.Although ph"sical in formE it does not have a ph"sical appearance similar to
the real object or situation it represents.
6@.A restriction or limitation imposed on a problem.
&nstructionsF
Turn o0 "our cell phoneGs. .se of CP is not allo7ed
during e-am.
1rite A(( 3O.$ A*S1E$S legibl" on "our TEST
BOO'(ET.
.se blue or blac5 pen onl". Strictl"F *O E$AS.$ES.
*ameF
CourseE 3ear and Bloc5F
Subject Code H DescriptionF
DateF
6A.The mathematical e-pression that de:nes the ,uantit" to be ma-imiIed or
minimiIed.
6B.The speci:c decision variable value or values that provide the JbestK output
for the model.
6C.Options available to the decision ma5er.
8D.The possible outcomes for chance events that a0ect the pa"o0 associated
7ith a decision alternative.
86.An intersection or junction point of an inLuence diagram or a decision tree.
88.*odes indicating points 7here a decision is made.
8;.*odes indicating points 7here an uncertain event 7ill occur.
8>.*odes of an inLuence diagram indicating points 7here a pa"o0 7ill occur.
8?.A measure of the conse,uence of a decision such as pro:tE cost or time.
8@.A graphical representation of the decision problem that sho7s the se,uential
nature of the decision9ma5ing process.
8A.(ines sho7ing the alternatives from decision nodes and the outcomes from
chance nodes.
8B.The amount of loss <lo7er pro:t or higher cost= from not ma5ing the best
decision for each state of nature.
8C.or a chance nodeE it is the 7eighted average of the pa"o0s.
;D.A tabular representation of the pa"o0s for a decision problem.
PART II# P*)2-e. ")-vin+# An(e* the &)--)(in+ queti)n an% h)(
necea*' )-uti)n# /3 ,t each1
6. &n a given business ventureE a lad" can ma5e pro:t of P;EDDD 7ith probabilit"
D.A? or ta5e a loss of P6EDDD 7ith probabilit" D.8?. Determine her e-pectation.
8. The probabilit" that an investor 7ill ma5e a pro:t of P?EDDD on a certain stoc5 is
M and the probabilit" that he or she 7ill ta5e a loss of P8E?DD is N. Determine
the e-pectation of the investor.
;. A 7oman purchases a tic5et for a certain raOe. The probabilit" that she can 7in
the :rst priIe of P6DEDDD is D.DD? and the probabilit" that she can 7in the
second priIe of P?EDDD is D.D?. 1hat is the reasonable priIe for her to pa" the
tic5etP
>. The probabilit" that a businessman 7ill ma5e a pro:t of P8EDDD on a given item
during the Christmas holida"s is 8G; and the probabilit" that he might lose P?DD
is 6G;. Determine the businessmanQs e-pected pro:t.
?. The probabilit" that a grocer 7ill ma5e pro:t of P?EDDD selling a certain t"pe of
fruit during month of September is D.BDE and the probabilit" that he 7ill ta5e a
loss of P;EDDD is D.8D. Determine the e-pectation of the grocer.
PART III# "TRAIGHT PRO!LEM"#
1# Dough Distributors has decided to increase its dail" muRn purchases b" 6DD
bo-es. A bo- of muRns costs P8 and sells for P; through regular stores. An"
bo-es not sold through regular stores are sold through DoughQs thrift store for
P6. Dough assigns the follo7ing probabilities to selling additional bo-esF
Additional sales Probabilit"
@D D.@
6DD D.>
1hat is the e-pected value of DoughQs decision to bu" 6DD additional bo-es of
muRnsP /3 ,t1
4# 'aren Compan" has three sales departments. Department A processes about
?D percent of salesE Department B about ;D percentE and Department C about
8D percent. &n the pastE Departments AE BE and C had error rates of about 8
percentE ? percentE and 8.? percentE respectivel". A random audit of the sales
records "ields a recording error of suRcient magnitude to distort the
compan"Qs results. The probabilit" that Department A is responsible for this
error is /3 ,t1
3# The TeenersQ Club sells fresh hot cider at $ecto football games. The fre,uenc"
distribution of the demand for cups of hot cider per game is presented belo7F
.nit sales volume Probabilit"
6DEDDD D.6D
8DEDDD D.6?
;DEDDD D.6?
>DEDDD D.>D
?DEDDD D.8D
The hot cider is sold for P;?.DD a cup and the cost per cup is P8D.DD. An"
unsold hot cider is discarded because it 7ill spoil before the ne-t game.
1hat is the estimated demand for hot cider at the ne-t football game if a
deterministic approach based on the most li5el" outcome is usedP /3 ,t1
3# #reen Co. is considering the sale of banners in an e-hibit fair. #reen Co. could
purchase these banners for PA.?D each. .nsold banners 7ould be unreturnable
and 7orthless after the e-hibit. #reen 7ould have to rent a booth at the
stadium for P>EDDD. #reen estimates sales of 8EDDD banners at P8D.DD each. &f
#reenQs prediction proves to be incorrect and onl" 6E?DD banners 7ere soldE the
cost of this prediction error 7ould beF /3 ,t1
5# Sampaguita Compan" ma5es corsages that it sells through salespeople on the
streets. Each sells for P8 and has variable production costs of PD.BD. The
salespeople receive a PD.?D commission on each corsage the" sellE and the
compan" must spend PD.D? to get rid of each unsold corsage. The corsages
last for onl" one 7ee5 and cannot be carried in inventor".
The manager of the :rm had estimated demand per 7ee5 and associated
probabilities as follo7sF
Demand Probabilit"
6DDEDDD D.8D
68DEDDD D.8D
6>DEDDD D.;D
6@DEDDD D.;D

a# The optimal 7ee5l" production of the corsage is /3 ,t1
2# The value of perfect information is /3 ,t1
6# A stud" of 6DD students 7ho had been a7arded universit" scholarships sho7ed
that >D 7or5ed part9 time jobE 8? made the deanQs list the previous semesterE
and 6? both 7or5ed a part9time job and made the deanQs list. 1hat 7as the
probabilit" that a student 7or5ed a part9time job or made the deanQs listP /3
,t1
7# &n the evaluation of a sales training programE a :rm discovered that of ?D
salespeople receiving bonus last "earE 8D attended a special sales training. The
:rm emplo"s 8DD salespeople. Assume that @DS of the salespeople did not
attend the training program. 1hat is the probabilit" that a salesperson ma5es a
bonus given that the salesperson attended the sales training programP /3 ,t1
8# Suppose that a decision ma5er faced 7ith four decision alternatives and four
states of nature develops the follo7ing cost pa"o0 table <in millions of dollars=F
"tate )& Natu*e
Decii)n
A-te*native
S6 S8 S; S>
%1 6> C 6D ?
%4 66 6D B A
%3 C 6D 6D 66
%3 B 6D 66 6;
1hat 7ould be the recommended decision using the optimisticE conservativeE
laplace and minima- regret approachesP /8 ,t1
9# %emming7a" &nc. is considering a T? million research and development <$HD=
project. Pro:t projections appear promisingE but %emming7a"Qs president is
concerned because the probabilit" that the $HD project 7ill be successful is onl"
D.?D. Secondl"E the president 5no7s that even if the project is successfulE it 7ill
re,uire that the compan" build a ne7 production facilit" at a cost of T8D million
in order to manufacture the product or to sell the rights to the product for an
estimated T8? million and the compan" 7ill no longer build the T8D million
production facilit". But if the facilit" is builtE the revenue 7ill be dependent on
the demand of the product 7hich ma" "ield high <D.?=E medium <D.;= or lo7 <D.8=
demand 7ith revenues of T?C millionE T>? million and T;? million respectivel".
a# Construct a decision tree 7hich illustrates the decision alternativesE the
states of nature and the pa"o0 <in terms of pro:t= for this given situation. /5
,t1
2# 1hat is the e-pected value of building the facilit"P /5 ,t1
c# 1hat is the e-pected value of underta5ing the $HD projectP /5 ,t1