2.2 Understanding management decision-making Flashcards
1
Q
Scientific decision-making
A
Scientific decision-making is decision-making based on data that uses a logical and rational approach.
2
Q
Analytical tools
A
- Boston Matrix
- Product life cycle
- Investment appraisal
- Ratio analysis
- Decision trees
3
Q
Opportunity cost
A
Opportunity cost is the cost of the next best alternative that will be missed by making a particular decision. The next best alternative forgone.
4
Q
Intuition
A
Intuition refers to making decisions based on gut feeling rather than data and rational analysis.
5
Q
Decision trees
A
Decision trees are tree like diagrams showing various options, their probabilities and financial outcomes.
6
Q
Expected values
A
Each circle:
(Outcome x Probability) - Cost
7
Q
Influences on decision-making
A
- Mission and objectives
- Ethics
- External environment
- Competition
- Resource constraints
