Decision Making

Question 1

What is a decision?

Answer 1

A decision is a conclusion drawn from a set of choices or alternatives available

Question 2

Essential features of information for decision making

Answer 2

1) Accurate
2) Timely - must be up to date
3) Relevant - relevant to deicion being made
4) Cost effective

Question 3

Qualitative

Answer 3

examines wider factors and are subjective

SWOT Analysis (Strengths, Weakness , Opportunties, Threats)
PESTEL (Political, Economic, Social , Technological, Enviromental, Legal)

Question 4

Quantitative

Answer 4

Monetary end volume conditions from alternative and objective

Critical Path Analysis
Break Even Analysis
Decision Trees

Question 5

Stages in Decision Making Process

Answer 5

1)Problem Analysis
2) Data Collection
3) Analysis and evaluation of data
4) Formulate and test alternative strategies
5) Choosing and implementation of decisions
6) Evaluation and feedback

Question 6

Facrors affecting Decision Making

Answer 6

1) Government (Political/Legal) - industrial relation issues modertaed by law (wages,holidays,termination), Health & Safety Laws, Employment Laws, consumer rights, environmental laws
2)Ecological - how businesses treat the environment in which they operate
3) Technological - Decision makers need to be aware of pros and cons of technology and capitalize on opportunities

Question 7

Social and Cultural Factors

Answer 7

Businesses need to be aware of cultures of their market. Culture is a combination of beliefs/values, rituals and practices that shapes one behaviour overtime. Decision makers must be conscious of the social family structures, improvements in education and propulation age/ working habits

Question 8

Human and Natural Constraints

Answer 8

Decision makers need to be aware of the following facts:
1) Skill level of employees which may hinder implementation of decisions
2) Years of experience of both management and staff
3) People having different atitudes towards risks and change
4) Size and composition of work force
5) Level of motivation of the workforce

Question 9

Natural Factors

Answer 9

Refer to natural resources that are used as inputs in production.

Question 10

Economic Factors

Answer 10

Inflation - Force Pull (too many chasing too few goods), Cost Push (prices of inputs increase)
Unemployment (Frictional, Cyclical, Structural, Seasonal)
Interest Rates
Fiscal Policies
Exchange Rates (Fixed/Floating)
Economic Growth