Chapter 2

Question 0

What is operational decision making?

Answer 0

Employees develop, control, and maintain core business activities required to run the day-to-day operations.

Question 1

What is the decision-making process?

Answer 1

1. Problem identification
2. Data collection
3. Solution generation
4. Solution test
5. Solution selection
6. Solution implementation

Question 2

What are structured decisions?

Answer 2

Situations where established processes offer potential solutions.

Question 3

Identify the employee type, focus, time frame, decision types, MIS type, and metric for Operational Decision Making:

Answer 3

Employee type: lower management, analysts, staff
Focus: internal, functional
Time frame: Short term, day-to-day operations
Decision types: Structured, recurring, repetitive
MIS type: Information
Metrics: Key performance indicators focus on efficiency

Question 4

What is managerial decision making?

Answer 4

Employees evaluate company operations to identify, adapt to, and leverage change.

Question 5

What are semistructured decisions?

Answer 5

Occur in situations in which a few established processes help to evaluate potential solutions, but not enough to lead to a definite recommended decision.

Question 6

Identify employee type, focus, time frame, decision types, MIS type, and metrics for Managerial Decision Making:

Answer 6

Employee type: Middle management, managers, directors
Focus: internal, cross-functional
Time frame: short term, daily, monthly, yearly
Decision types: semistructured, adhoc, reporting
MIS type: business intelligence
Metrics: KPIs focusing on efficiency, and CSFs focusing on effectiveness

Question 7

What is strategic decision making?

Answer 7

Managers develop overall strategies, goals, and objectives.

Question 8

What are unstructured decisions?

Answer 8

Occurs in situations in which no procedures or rules exist to guide decision makers toward the correct choice.

Question 9

Identify the employee type, focus, time frame, decision types, MIS type, and metrics for Strategic Decision Making:

Answer 9

Employee type: Senior management, presidents
Focus: external, industry, cross company
Time frame: long term, yearly, multi-year
Decision types: unstructured, nonrecurring, one time
MIS type: knowledge
Metrics: CSFs focusing on effectiveness

Question 10

What are critical success factors (CSF)?

Answer 10

Crucial steps companies perform to achieve their goals and objectives and implement their strategies. (e.g. create high-quality products, retain competitive advantages, reduce product costs, increase customer satisfaction, hire and retain the best business professionals)

Question 11

What are key performance indicators (KPI)?

Answer 11

Quantifiable metrics a company uses to evaluate progress toward critical success factors. (e.g. Turnover rates of employees, percentage of help desk calls answered in the first minute, number of product returns, number of new customers, average customer spending)

Question 12

What are examples of external and internal KPI?

Answer 12

External KPI: Market share - the portion of the market a firm captures
Internal KPI: Return on investment - indicates the earning power of a project

Question 13

What are efficiency MIS metrics?

Answer 13

Measure the performance of MIS itself, such as throughput, transaction speed, and system availability.

Question 14

What are effectiveness MIS metrics?

Answer 14

Measures the impact MIS has on business processes and activities, including customer satisfaction and customer conversation rates.

Question 15

What is a benchmarking?

Answer 15

A process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performance.

Question 16

What is a business process model?

Answer 16

A graphic description of a process, showing the sequence of process tasks, which is developed for a specific

• As-Is process model
• To-Be process model

Question 17

What is workflow?

Answer 17

Includes tasks, activities, and responsibilities required to execute each step in a business process.

Question 18

What is automation?

Answer 18

The process of computerizing manual tasks

Question 19

What is streamlining?

Answer 19

Improves business process efficiencies by simplifying or eliminating unnecessary steps

Question 20

What is bottleneck?

Answer 20

Occur when resources reach full capacity and cannot handle any additional demands

Question 21

What is redundancy?

Answer 21

Occurs when a task or activity is unnecessarily repeated

Question 22

What is business process reengineering (BPR)?

Answer 22

Analysis and redesign of workflow within and between enterprises.

Question 23

What is the difference between the customer facing process vs the business facing process?

Answer 23

Customer facing process - results in a product or service that is received by an organization’s external customer. (e.g. customer service, sales process, order shipping)
Business facing process - invisible to the external customer but essential to the effective management of the business. (e.g. strategic planning, training, purchasing raw materials)

Question 24

What are the four quantitative models used by Decision Support Systems (DSS)?

Answer 24

1. What-if analysis: checks the impact of a change in a variable or assumption on the model.
2. Sensitivity analysis: a special case of what-if analysis, is the study of the impact on other variables when on variable is changed repeatedly.
3. Goal-seeking analysis: finds the inputs necessary to achieve a goal such as a desired level of output.
4. Optimization analysis: an extension of goal-seeking analysis, finds an optimum value for a target variable by repeatedly changing other variables, subject to specified constraints.

Question 25

What is a digital dashboard?

Answer 25

a common tool that tracks KPIs and CSFs by compiling information from multiple sources and tailoring it to meet user needs.

Question 26

What is visualization?

Answer 26

Produces graphical displays of patterns and complex relationships in large amounts of data.

Question 27

What is granularity?

Answer 27

refers to the level of detail in the model or the decision-making process.

Question 28

What is a business process?

Answer 28

a standardized set of activities that accomplish a specific task, such as processing a customer’s order. Business processes transform a set of inputs into a set of outputs (goods or services) for another person or process by using people and tools.