Decision making models decision tree

Question 1

what are the 3 types of strategies businesses use?

Answer 1

Strategic
Tactical
Operational

Question 2

What is the importance of Decision Making?

Answer 2

Set corporate objectives
Determine corporate strategy
Manage resources including staff
Control day to day operations
Respond to external changes
Assess alternative courses of actions

Question 3

What is strategic decision making?

Answer 3

Strategic decision making involves the process of selecting and implementing courses of action that align with an organization’s long-term objectives and competitive advantage.

(HIGH MANAGEMENT , LONG TERM)

Question 4

What is tactical decision making?

Answer 4

Tactical decision making involves the implementation of specific actions and plans to achieve short-term goals within the framework of broader strategic objectives.
(MID LEVEL MANAGEMENT , MID TERM)

Question 5

What is operational Decision Making ?

Answer 5

Operational decision making pertains to day-to-day activities and processes aimed at efficiently managing resources and achieving immediate organizational goals.

(LOW LEVEL MANAGEMENT, SHORT TERM)

Question 6

What does scientific decision making mean?

Answer 6

Decisions made using Data or research

Question 7

What does intuitive decision making mean?

Answer 7

Based on intuition (Gut feeling)

Question 8

PROS AND CONS of Scientific decision making?

Answer 8

Supported by evidence
Logical thought process

Expensive data
TIme consuming

Question 9

PrOS AND CONS of intuitive decision making?

Answer 9

Quick decision making
Encourages innovation and creativity

Difficult to justify
Reliant on experience and expertise

Question 10

What does a decision tree identify?

Answer 10

When a decision has to made
The choices available
Possible outcomes
financial outcome
Probability of an outcome occurring

Question 11

What shape is a decision node in a decision tree diagram

Answer 11

Square

Question 12

What shape is a chance node in a decision tree diagram

Answer 12

Circle

Question 13

How to calculate a decision tree?

Answer 13

Right to left
Multiply Probability x Financial outcome (ADD SUCCESS AND FAILURE)
Put value into circle node
This is expected value
Expected value - cost
gives net gain
bigger net gain
into square node

Question 14

What are the pros and cons of Decision trees?

Answer 14

Takes into account risk
Encourages local thinking
Alternative actions may be found
Puts monetary value on decisions

Estimates may be biased
May not consider external factors