CHAP 2 Flashcards
(28 cards)
defined as ‘the process of identifying and
choosing alternative courses of action in a manner appropriate to the demands of the situation.
DECISION-MAKING
THE DECISION-MAKING PROCESS
- diagnose problem
- analyze environment
- articulate problem or opportunity
- develop viable alternatives
- evaluate alternatives
- make a choice
- implement decision
- evaluate and adapt decision results
If a manager wants to make an intelligent decision; his first move must be to identify the problem
DIAGNOSE PROBLEM
The environment where the organization is situated plays a very significant role in the success or failure of such .an organization
ANALYZE THE ENVIRONMENT
The environment consists of two major concerns
- internal
- External
refers to organizational activities within a firm that surrounds decision-making.
internal
refers to variables that are outside the organization and not typically within the short-run control of top management
External
After determining the viability of the alternatives and a revised list has been made, the nest step is?
EVALUATE ALTERNATIVES
After the alternatives have been evaluated, the
decision-maker must now be ready to ____, process of selecting among alternatives representing potential solutions to a
problem.
MAKE A CHOICE
This is necessary, or decision-making will be an
exercise in futility (thought moves to reality).
IMPLEMENT DECISION
use control and feedback mechanisms to ensure results and to provide information for future decisions.
EVALUATE AND ADAPT DECISION RESULTS
APPROACHES IN SOLVING PROBLEMS
- qualitative evaluation, and
- quantitative evaluation
refers to evaluation of alternatives using intuition and subjective judgment
Qualitative Evaluation
collecting and analyzing numerical data to describe characteristics, find correlations, or test hypotheses.
Quantitative evaluation
QUANTITATIVE MODELS FOR DECISION MAKING
- inventory models
- queuing theory
- network models
- forecasting
- regression analysis
- simulation
- linear programming
- sampling theory
- statistical decision theory’
this one is used to calculate the number of items that should be ordered at one time to minimize the total yearly cost of placing
orders and carrying the items in inventory.
Economic order quantity model
this is an economic order quantity technique applied to production orders.
Production order quantity modeL
this is an inventory model used for planned shortages.
Back-order inventory model
an inventory model used to minimize the total cost when quantity discounts are offered by suppliers
Quantity discount model
describes how to determine the number of service units that will minimize both customers waiting time and cost of service
Queuing Theory
where large complex tasks are broken
into smaller segments that can be managed
independently
Network Models
defined as the collection of past
and current information to make predictions about the future.
Forecasting
is a forecasting method that
examines the association between two or more
variables. It uses data from previous periods to predict future events
Regression Analysis
model constructed to represent, reality,
on which conclusions about real-life problems can be used
Simulation
