30 Questions
What is the primary goal of decision making?
To make a choice from two or more alternatives
What is the first step in the decision-making process?
Identifying a problem
What is a characteristic of a problem?
A manager must have the authority to solve it
What is the purpose of allocating weights to decision criteria?
To prioritize the importance of each criterion
How many steps are involved in the decision-making process?
8
What is the final step in the decision-making process?
Evaluating the decision's effectiveness
What do decision makers assume when they satisfice?
They will choose the first alternative that satisfactorily solves the problem.
What is an example of escalation of commitment?
Committing more resources to a decision despite evidence it may have been wrong.
What is characteristic of an unstructured problem?
It is a new or unusual problem with ambiguous information.
What is a programmed decision?
A repetitive decision that can be handled using a routine approach.
What is an example of a procedure?
A series of interrelated steps to respond to a structured problem.
What is the main difference between structured and unstructured problems?
Structured problems are routine and familiar, while unstructured problems are new and unusual.
What is the primary purpose of Step 3 in the decision-making process?
To determine the relative priority of each decision criterion
What is the ultimate goal of Step 6 in the decision-making process?
To choose the best alternative
What is a disadvantage of group decision making?
Increases pressures to conform to the group's mindset
What is the purpose of assigning weights to each criterion in the decision-making process?
To place the criteria in order of their importance
What is the purpose of calculating the expected value of revenues?
To evaluate the risk and potential outcome of a decision
What is the goal of the economic order quantity (EOQ) model?
To balance purchase, ordering, carrying, and stock-out costs
What is the primary focus of Step 2 in the decision-making process?
Identifying the relevant decision criteria
What is the purpose of Step 8 in the decision-making process?
To judge the soundness of the decision by its outcomes
What is a characteristic of an effective decision-making process?
It blends analytical with intuitive thinking
What is the purpose of a payoff matrix?
To evaluate the outcomes of different decisions
What is the result of Step 5 in the decision-making process?
A value judgment of each alternative
What is a disadvantage of the group decision-making process related to responsibility?
Ambiguous responsibility for outcomes
What is the primary purpose of a rule in an organization?
To limit what a manager or employee can or cannot do
What is an example of a procedure?
Following all steps for completing merchandise return documentation
What is the term for a situation where a manager can make accurate decisions because the outcome of every alternative is known?
Certainty
What is the approach of a manager who wants to maximize the minimum payoff?
Maximin
What is the term for a situation where a decision maker has neither certainty nor reasonable probability estimates available?
Uncertainty
What is the approach of a manager who wants to minimize maximum regret?
Minimax
Test your knowledge on the decision-making process, approaches to decision-making, types of decisions, and contemporary issues in managerial decision making. This quiz covers the key concepts in chapter 4 of decision analysis.
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