Decision Making: Nonmonetary Factors in Outcome Development

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What is the first step in the decision-making process?

Define the goals or objectives

Collect all the relevant information

Recognize a decision problem (correct)

Select the best alternative

What financial data is required to make an economic decision according to the text?

Gather technical and mechanical data

Collecting irrelevant data

Minimal cash outlay (correct)

Choose between Saturn and Honda

Why is focusing on the differences among alternatives important in decision-making?

To make the decision more complex

To consider irrelevant factors

To distract from the main objectives

To simplify the decision process (correct)

What does 'use a consistent viewpoint' mean in the context of decision-making?

Having a defined perspective for evaluating alternatives Signup and view all the answers

Why is selecting the best alternative considered one of the final steps in decision-making?

To ensure all relevant information is gathered Signup and view all the answers

In the context of decision criterion selection, what should be avoided when developing alternatives for analysis according to the text?

Using an inconsistent viewpoint Signup and view all the answers

What are some examples of objectives other than profit maximization or cost minimization that can be important to an organization?

Meeting or exceeding customer expectations and improving employee satisfaction Signup and view all the answers

According to Step 4, what will the decision maker normally select?

The alternative that best serves the long-term interests of the owners of the organization Signup and view all the answers

What is largely based on cash-flow estimates for the feasible alternatives selected for detailed study?

Analysis and comparison of alternatives Signup and view all the answers

What is an essential part of an engineering economy study according to Principle 6?

Considering future uncertainties Signup and view all the answers

Which factor often requires a substantial effort to obtain reasonably accurate forecasts in an engineering economy study?

Inflationary pressures Signup and view all the answers

What is incorporated in Step 5 for detailed study of alternatives?

Cash-flow estimates and consideration of future uncertainties Signup and view all the answers

What is the advantage of using a common unit of measurement when analyzing and comparing alternatives?

It simplifies the analysis and comparison Signup and view all the answers

Why is it important for decision making to consider outcomes expressed in different units of measurement?

To have a comprehensive view of all relevant criteria Signup and view all the answers

What role does uncertainty play in the analysis of future outcomes of alternatives?

Uncertainty is inherent and should be recognized in the analysis Signup and view all the answers

How does improved decision making result from revisiting decisions?

By comparing projected outcomes with actual results achieved Signup and view all the answers

What is one important application of engineering economy according to the text?

Seeking new and wider applications of technical knowledge for mankind's benefit Signup and view all the answers

What does engineering economy aim to discover regarding projects or ventures?

'Limiting factors' that may hinder success Signup and view all the answers

Decision Making: Nonmonetary Factors in Outcome Development

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