In Handling Uncertainty in Decision Modeling, What Does the Pessimistic

question 47

Multiple Choice

In handling uncertainty in decision modeling, what does the pessimistic approach do?

• A) It assumes the worst possible outcome of one alternative will occur and then avoids it.
• B) It assumes the worst possible outcome of some alternatives will occur and then selects the best of them.
• C) It assumes the worst possible outcome of each alternative will occur and then selects the worst of them.
• D) It assumes the worst possible outcome of each alternative will occur and then selects the best of them.

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Definitions:

Excess Demand

A scenario in which the demand for a product or service surpasses the supply available at the existing price.

Surplus

An excess of production or supply over demand.

Excess Supply

A situation where the quantity of a good or service supplied exceeds the quantity demanded at the current price, leading to downward pressure on the price.

Equilibrium Quantity

The amount of products or services that are both offered and sought after at the balance price, where the supply meets the demand exactly.