1. In a simulation study, explain the difference between model, inputs, and outputs.

2. Which of the following statements, about simulation and decision analysis, is true?

1. Simulation and decision analysis are both optimization techniques.
2. We can use simulation for decision making under uncertainty but not decision analysis.
3. In contrast with decision analysis, simulation is used only for not hard to model systems.
4. Simulation does not guarantee optimal decisions; on the other hand, decision analysis uses different approaches to find an optimal decision/alternative under a specific approach.
5. None of the above statement is true.

3. In a few words, explain the dynamics of decision making illustrated in the following influence diagram:

Decision Alternatives

Payoff

States of Nature

4. Consider a queueing system, in which the mean arrival rate is 40 units per hour, and the average service time is 1 minute. What is the utilization factor of the system?_________

1. 40%
2. 150%
3. 66.67%
4. None of the above.

5. Choose the most accurate statement among the following. In project scheduling parlance, crashing is__________________

1. The shortening of activity times by adding resources and hence usually increasing cost.
2. The shortening of activity times.
3. The shortening of activities along the critical path.
4. The shortening of some activities along the critical path.
5. None of the above statement is accurate.

6. Which of the following statements is true? In queueing models, the notation stands for____________

1. M: Markovian, with arrivals following a Poisson distribution; M: Markovian, with the service time following a Poisson distribution; k: servers.
2. M: Markovian, with arrivals following a Poisson distribution; M: Markovian, with the service time following an exponential distribution; k: servers.
3. M: Markovian, with arrivals following an exponential distribution; M: Markovian, with the service time following a Poisson distribution; k: servers.
4. None of the above statement is true.

7. Which of the following statements is false?______________

(i) A payoff table is a tabular representation of the payoffs for a decision problem.

2. In decision analysis, a consequence is the result obtained when a decision alternative is chosen and a chance event occurs. A measure of consequence is often called a payoff.
3. A decision alternative is an option available to the decision maker.
4. A Decision Tree is a graphical representation of the decision problem that shows the sequential nature of the decision-making problem.
5. None of the above statement is false.

8. Fill in the blanks in the first column of the following table with the characteristics of dynamic programming approach corresponding to the definitions in the second column:

Characteristic	Definition
	Action taken in the course of a decision making problem.
	Component of the system that changes as a consequence of the action taken.
	Function that captures the total reward (for instance cost, revenue) associated with the current and the remaining stages of the problem.

9. What is the difference between an optimal solution and the optimal value of a problem?
10. How many solutions does the following linear programming problem have? Justify your answer.