- •Examination questions Managerial decision making
- •Compare structures and unstructured problems. А)Structured problems b) Unstructure problems
- •Describe the phases of the decision making process.
- •Give two examples of the cognitive limitations.
- •Why the decisions are hard? Quote 4 general reasons (groups of reasons).
- •Decision analysis
- •Compare decision making under uncertainty and under risk.
- •Describe the Principle of Insufficient Reason.
- •10. Describe the Principle of Insufficient Reason.
- •Describe the calculation of the posterior probabilities.
- •Describe the expected value of sampling information.
- •Describe the decision tree.
- •Game theory
- •Multiple criteria decision making
- •Describe one method based on pair comparison.
- •Describe the simple additive weighting method.
- •Madm Advanced methods
- •What is the principle of the topsis method?
- •Describe the priam method and the role of standard levels.
- •Describe the ahp method. For which cases it is suitable?
- •Input-output analysis
- •Describe the quadrants in the input-output table.
- •What is the intermediate consumption in the output-input model?
- •What is ebit and where we can find it in the input-output table?
- •What kind of model is input-output model?
- •How and why we calculate the input-output coefficients?
- •Construct the distribution equations. Markov chains
- •Describe Markov chain as a stochastic process.
- •Queuing theory
- •Inventory control
Multiple criteria decision making
What is the difference between multiple objective decision making and the MADM?
In MADM there are usually a limited number of predetermined alternatives.
Describe the decision matrix for the multiple criteria decision making.
Multiple criteria decision – making ( MCDM) refers to making decisions in the of multiple –usually conflicting criteria. Problems for multiple criteria decision making are common occurrences in everyday life . MCDM have the following characteristics : each problem has multiple objectives. Conflict among criteria. Each objective has a different unit of measurement.
What is the difference between ordinal and cardinal information?
Ordinal information refers to Disjuctive Method, Lexicographic Method, Sequence Method
Cardinal information refers to Saaty's Method, Linear Assignment Method, Simple Additive Weighting Method, Hierarchical Additive Weighting Method, Normalization, Standardization, ELECTRE, TOPSIS
Ordinal is paired comparison, Cardinal is numeral.
What is utopia point? Where we can apply it?
-It’s the best outcome, we use it to compare with reality.
What information can be provided by the graphical solution of the MADM model?
Describe the two variants of the standard level method.
Conjunctive – all attributes must be over the standard level
Disjunctive – at least on attribute is over the standard level
Which methods are based on the ordinal information? Describe one of them.
Ordinal information refers to Disjuctive Method, Lexicographic Method, Sequence Method
Lexicographic method
Suppose the criteria are ordered according to their importance (first = the most important). Apply first criterion and get the best variant (single criterion decision making). If there are more than one the best variant repeat with the second the most important criterion, etc.
Describe the lexicographic method.
Suppose the criteria are ordered according to their importance (first = the most important).Apply first criterion and get the best variant (single criterion decision making).If there are more than one the best variant repeat with the second the most important criterion, etc.
Why do we apply normalization and in which cases?
Normalization may be essential for some methods to facilitate the computational problems inherent to the presence of different units in decision matrix. The advantage of normalization is that all criteria are measured in dimensionless units and inter-attribute comparison is possible.
There are different methods of normalization;
- one of then SAW - Simple Additive Method (SAW) is probably more often used method of MADM.
GOAL OF NORMALIZATION - get all criteria in the same units !
, aij принадлежит <0;1>
Describe one method based on pair comparison.
Group of methods based on pairwise comparison:
a. Fuller method
b. Saaty‘s method
c. AHP
Fuller method:
This method is more often used for criteria weights assessment but can be used as very simple method directly for alternative ranking.
The decision maker has to compare each pair of alternatives (criteria). The total number of comparison is
N= k(k-1) / 2, where „k“ is the number of variants (criteria).
The comparison is usually made in Fuller ́s triangle. The better variant (more important criterion) in each pair is marked with a circles.
Then we used formula Vj = nj / N, j = 1,2, …,n.
Sum of Vj must be equal 1 !