Chapter 2 Flashcards
The engineer manager’s _______ will be very crucial to his success as a professional
decision-making skills
will provide the right environment for continuous growth and success of any organized effort
Good Decisions
must be made at various levels in the workplace
decisions
the process of identifying and choosing alternative courses of action in a manner appropriate to the demands of the situation
Decision-making
Rational decision making, according to _________
David H. Holt
Decision-making process
- diagnose problem
- analyze environment
- articulate problem or opportunity
- develop viable alternatives
- evaluate alternatives
- make a choice
- implement decision
- evaluate and adapt decision results
is tantamount to having the problem half-solved
identification of the problem
exists when there is a difference between an actual situation and a desired situation
problem
its objective is the identification of constraints, which may be spelled out as either internal or external limitations
environmental analysis
Examples of internal limitations
limited funds, limited training, ill-designed facilities
Examples of external limitations
patents, limited market, strict enforcement of local zoning regulations
components of the environment
internal and external
refers to organizational activities within a firm that surrounds decision-making
internal environment
refers to variables that are outside the organization and not typically within the short-run control of top management
external environment
procedure in developing viable alternatives
prepare a list of alternative solutions, determine viability of each solution, revise the list
proper _____ makes choosing the right solution less difficult
evaluation
suggested that each alternative must be analyzed and evaluated in terms of its value, cost, and risk characteristics
William Emerson Sauder
refers to benefits that can be expected
value of alternatives
refers to out-of-pocket costs, opportunity costs, and follow-on costs
cost of the alternative
refer to the likelihood of achieving the goals of the alternatives
risk charateristics
refers to the process of selecting among alternatives representing potential solutions to a problem
Choice-making
refers to carrying out the decision so that the objectives sought will be achieved.
Implementation
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
Feedback
refers to actions made to ensure that activities performed match the desired activities or goals
Control
Approaches in solving problems
qualitative evaluation, quantitative evaluation
this term refers to evaluation of alternatives using intuition and subjective judgement
qualitative evaluation
this terms refers to the evaluation of alternatives using any technique in a group classified as rational and analytical
Quantitative evaluation
Quantitative Models
- Inventory Models
- Queuing Theory
- Network Models
- Forecasting
- Regression Analysis
- Simulation
- Linear Programming
- Sampling Theory
- Statistical Decision-Theory
consist of several types all designed to help the engineer manager make decisions regarding inventory
inventory models
types of inventory models
- economic order quantity model
- production order quantity model
- back order inventory model
- quantity discount model
used to calculate the number of items that should be ordered at one time to minimize the total yearly cost of placing orders and carrying the items in inventory
economic order quantity model
economic order quantity technique applied to production orders
production order quantity model
inventory model used for planned shortages
back order inventory model
used to minimize total cost when quantity discounts are offered by suppliers
quantity discount model
describes how to determine the number of service units that will minimize both customer waiting time and cost of service
Queuing Theory
models where large complex tasks are broken into smaller segments that can be managed independently
Network Models
Two most prominent network models
Program Evaluation Review Technique (PERT), Critical Path Method (CPM)
a technique which enables engineer managers to schedule, monitor, and control large and complex projects by employing three time estimates for each activity
PERT
technique using only one time factor per activity that enables engineer managers to schedule, monitor, and control large and complex projects
CPM
the collection of past and current information to make predictions about the future
Forecasting
a forecasting method that examines the association between two or more variables
Regression Model
may be simple or multiple depending on the number of independent variables
Regression Analysis
it is when one independent variable is involved
simple regression
it is when two or more independent variables are involved
multiple regression
a model constructed to represent reality, on which conclusions about real-life problems can be used
Simulation
is a quantitative technique that is used to produce an optimum solution within the bounds imposed by constraints upon the decision
Linear Programming
quantitative technique where samples of populations are statistically determined to be used for a number of processes, such as quality control and marketing research
Sampling Theory
rational way to conceptualize, analyze, and solve problems in situations involving limited, or partial information about the decision environment
Decision Theory
to revise and update the initial assessments of the event probabilities generated by alternative solutions
Bayesian Analysis
selects the decision alternative having the maximum expected payoff, or the minimum expected loss if he is working with a loss table
Bayes Criterion
