Module 2 - Decision Making

Question 1

“the process of identifying and choosing alternative courses of action in a manner appropriate to the demands of the situation

Answer 1

decision making

Question 2

the heart of all the management functions

Answer 2

decision making according to Nickels and others

Question 3

conditions for making a decision

Answer 3

In order to make a decision you:

• must have at least two (2) choices from which to choose (to do or not to do)
• must involve something that is achievable
• must have the power to decide

Question 4

the way of making choices by establishing a decision, collecting data, and analyzing alternative resolutions.

Answer 4

decision making

Question 5

Decisions need to be taken at ______________ in an organization. They are often produced at _____________ of the management process.

Answer 5

different levels, different stages

Question 6

If certain resources must be used, someone must make a ____________ authorizing certain persons to appropriate such resources.

Answer 6

decision

Question 7

The __________________ is responsible for decision-making.

Answer 7

engineering manager

Question 8

For executives, it is understandable to make _____________ at times. As soon as they are identified, the wise manager will __________ them.

Answer 8

incorrect choices, correct

Question 9

The bigger issue is the manager who cannot or do not want to make decisions. Delaney concludes that this type of managers are ________ and “______________________”.

Answer 9

dangerous, should be removed from their position as soon as possible

Question 10

The higher the level of management, the ___________________ the decision-making becomes.

Answer 10

greater and more complex

Question 11

Rational decision-making, according to David H. Holt, is a process involving which steps?

Answer 11

1. Diagnose problem
2. Analyze environment
3. Develop viable alternatives
4. Evaluate alternatives
5. Make a choice
6. Implement decision
7. Evaluate and adapt decision results

Question 12

An expert once said “_____________________ is tantamount to having a problem half-solved.”

Answer 12

identification of the problem

Question 13

A ___________ exist when there is a difference between an actual situation and a desired situation.

Answer 13

problem

Question 14

The objective of ___________________ is the identification of constraints, which may be spelled out as either internal or external limitations.

Answer 14

environmental analysis

Question 15

Example of internal limitations

Answer 15

• Limited Funds available for the purchase of equipment.
• Limited training on the part of employees.
• Ill-designed facilities.

Question 16

Examples of external limitations

Answer 16

• Patents are controlled by other organization.
• A very limited market for the company’s products and services exist.
• Strict enforcement of local zoning regulations.

Question 17

The environment consists of which two major concerns?

Answer 17

• Internal
• External

Question 18

refers to organizational activities within a firm that surrounds decision-making.

Answer 18

internal environment

Question 19

refers to factors that are outside of the organization and not usually under top management’s short-run supervision.

Answer 19

external environment

Question 20

a procedure for developing viable alternatives

Answer 20

• Prepare a list of alternative solutions.
• Determine the viability of each solutions.
• Revise the list by striking out those which are not viable.

Question 21

the engineering firm and the internal environment in decision making

Answer 21

• Organizational Aspects
• Marketing Aspects
• Personnel Aspects
• Production Aspects
• Financial Aspects

Question 22

the engineering firm and its external environment

Answer 22

• government
• labor unions
• suppliers
• banks
• public
• competitors
• clients
• engineers

Question 23

An ______________________ is required after the viability of the alternatives has been determined and a revised list has been made.

Answer 23

assessment of the remaining alternatives

Question 24

How the alternatives would be assessed depends on the _________________, the _____________, and the ______________________.

Answer 24

nature of the problem, company’s objectives, nature of the provided alternatives

Question 25

refers to the practice of choosing between alternatives that constitute possible solutions to a problem.

Answer 25

Choice-making

Question 26

To make the selection process easier, the alternatives can be ranked from best to worst on the basis of some factors like _______, _________, or ________.

Answer 26

benefit, cost, risk

Question 27

Implementation follows after a decision has been made. This is important, otherwise the decision-making will be an _______________.

Answer 27

empty gesture

Question 28

refers to carrying out the decision so that the objectives sought will be achieved.

Answer 28

Implementation

Question 29

In order to ensure performance and to provide information for future decisions, it is therefore necessary for the manager to use ___________________.

Answer 29

control and feedback mechanisms

Question 30

refers to the process which requires checking at each stage of the process to assure that the alternatives generated, the criteria used in evaluation, and the solution selected for implementation are in keeping with the goals and objectives originally specified.

Answer 30

Feedback

Question 31

refers to steps taken to ensure that the tasks conducted adhere to the intended activities or set goals.

Answer 31

Control

Question 32

In this last stage of decision-making process, the engineer manager will find out whether or not the desired outcome was accomplished. If the desired outcome is obtained, it is safe to conclude that the decision taken was ____________.

Answer 32

successful

Question 33

In decision-making, the engineer manager is faced with problems which may either be simple or complex. To provide him with some guide, he must be familiar with which approaches?

Answer 33

- Qualitative evaluation - Quantitative evaluation

Question 34

refers to the assessment using intuition and subjective judgement for alternatives.

Answer 34

Qualitative Evaluation

Question 35

Stevenson states that managers tend to use the qualitative approach when:

Answer 35

- The problem is fairly simple. - The problem is familiar. - The costs involved are not great/ low cost. - Immediate decisions are needed.

Question 36

refers to the evaluation of alternatives using any technique in a group classified as rational and analytical.

Answer 36

Quantitative Evaluation

Question 37

The main aim of the quantitative method is to make an optimal decision in a situation where the probability of all outcomes is uncertain, using _______________________.

Answer 37

mathematical and statistical models

Question 38

the types of quantitative techniques which may be useful in decision-making

Answer 38

1. Inventory models 2. Queuing theory 3. Network models 4. Forecasting 5. Regression analysis 6. Simulation 7. Linear programming 8. Sampling theory 9. Statistical decision theory

Question 39

designed to help the engineer manager make decisions regarding inventory

Answer 39

inventory models

Question 40

types of inventory models

Answer 40

1. Economic order quantity model 2. Production order quantity model 3. Back order inventory model 4. Quantity discount model

Question 41

This type of inventory model is used to calculate the number of items that should be ordered atone time to minimize the total yearly cost of placing orders and carrying the items in inventory.

Answer 41

Economic order quantity model

Question 42

This is an economic order quantity technique applied to production orders.

Answer 42

Production order quantity model

Question 43

This is an inventory model used for planned shortages.

Answer 43

Back order inventory model

Question 44

An inventory model used to minimize the total cost when quantity discounts are offered by suppliers.

Answer 44

Quantity discount model

Question 45

theory that describes how to determine the number of service units that will minimize both customer waiting time and cost service.

Answer 45

queuing theory

Question 46

applicable to companies where waiting lines are common situation

Answer 46

queuing theory

Question 47

The aim of this theory is to minimize such waiting periods and also reduce investments on such expenses.

Answer 47

queuing theory

Question 48

These are models in which large, complex tasks are divided into smaller segments that can be independently managed in order to avoid wasting time, energy and money.

Answer 48

network models

Question 49

This technique aims to solve this by creating strong network structures for work.

Answer 49

network models

Question 50

the two most prominent network models

Answer 50

- The Program Evaluation Review Technique (PERT) - The Critical Path Method (CPM)

Question 51

A technique that helps engineers and executives to plan, track and manage large and complex projects by using three time estimates for each task.

Answer 51

The Program Evaluation Review Technique (PERT)

Question 52

this is a network technique using only one time factor per activity that enables engineer managers to schedule, monitor, and control large and complex projects.

Answer 52

The Critical Path Method (CPM)

Question 53

may be defined as “the collection of past and current information to make predictions about the future”.

Answer 53

Forecasting

Question 54

a method of forecasting which examines the relation between two or more variables. To forecast future events, it utilizes data from previous times.

Answer 54

regression model

Question 55

Regression analysis may be simple or multiple depending on the number of independent variables present. When one independent variable is involved, it is called ________________; when two or more independent variables are involved, it is called ______________________.

Answer 55

simple regression, multiple regression

Question 56

a model constructed to represent reality, on which conclusions about real-life problems can be used.

Answer 56

Simulation

Question 56

a highly sophisticated tool by means of which the decision maker develops a mathematical model of system under consideration.

Answer 56

Simulation

Question 57

a quantitative approach that is used to generate an optimal solution within the limits imposed on the decision by constraints.

Answer 57

Linear programming

Question 58

very useful as a decision-making mechanism when the system is limited by supply and demand constraints in factories, warehouses, or business areas.

Answer 58

Linear programming

Question 59

a quantitative approach in which population samples are statistically calculated to be used for a variety of processes, such as quality control and marketing research.

Answer 59

theory of sampling

Question 60

refers to the 'logical way of conceptualizing, evaluating and solving problems in situations involving minimal or partial decision-environment knowledge.

Answer 60

Decision theory

Question 61

The objective of the ________________ is to revise and update the initial evaluations of the probabilities of the event generated by the alternative solutions.

Answer 61

Bayesian analysis

Question 62

If the decision-maker is able to assign probabilities to the different events, it becomes possible to use the probabilistic decision rule, called the _______________.

Answer 62

Bayes criterion

Question 63

When dealing with a loss table, the Bayes criterion chooses the alternative decision with the ________________, or the ____________________.

Answer 63

highest expected payoff, minimum expected loss