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IENG 55 (MIDTERMS) > Decision Making > Flashcards

Decision Making Flashcards

1
Q

Is the action of selecting one alternative from a set of several alternatives.

A

Decision Making

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2
Q

Is the process by which managers respond to opportunities and threats by analyzing options and making decisions about goals and courses of action.

A

Decision Making

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3
Q

Is a conclusion or resolution reached after consideration of alternatives

A

Decision

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4
Q

Are principles, Guidelines or requirements that are used to make a decision

A

Decision Criteria

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5
Q

Importance of Good Decision-Making

A

•Achievement of objectives

•Optimum use of resources

•Higher efficiency

•Innovation

•Motivation

•Growth and Expansion

•Facing new Challenges

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6
Q

Table showing the expected payoffs for each alternative in every possible state of nature. These tables are helpful in choosing among alternatives because they facilitate comparisons

A

Payoff Table

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7
Q

Decision Making Environments

A
  1. Certainty
  2. Uncertainty
  3. Risk
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8
Q

Means that relevant parameters such as costs, capacity and demand have known values

A

Certainty

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9
Q

Environment in which it is impossible to assess the likelihood of various future events

A

Uncertainty

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10
Q

Means that certain parameters have probabilistic outcomes

A

Risk

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11
Q

The Decision-Making Process

A
  1. Recognize the need to make a decision
  2. Determine decision criteria
  3. Identify alternatives
  4. Evaluate alternatives
  5. Select best alternatives
  6. Implement chosen alternatives
  7. Follow up and evaluate results
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12
Q

Causes of Poor Decisions

A
  1. Mistakes in decision process
  2. Bounded Rationality
  3. Sub-Optimization
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13
Q

Limitations in decision making caused by costs, human abilities, time, technology, and availability of information

A

Bounded Rationality

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14
Q

Result of different departments each attempting to reach a solution that is optimum for that department

A

Sub-Optimization

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15
Q

Decision Making skills

A
  1. Being Intuitive
  2. Being Rational
  3. Being Well-informed
  4. Satisficing
  5. Conflict Management
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16
Q

Simplest and the one of the most common ways to take a decision. Thought it is not always the best.

Includes that you have to rely on the decision that you feel appropriate, without much thinking about the logic that makes you take the choice.

A

Being Intuitive

17
Q

Cons of using Intuition

A
  1. Flawed information
  2. Short term emotional bias
  3. Insufficient consideration of others
  4. Prejudices
  5. Lack of openness
18
Q

It is the use of logic to fix what is best, after reviewing all possible options then evaluating every option using logic and rationality

A

Being Rational

19
Q

More than finding the fact and logic of a decision, getting a personal opinion also impacts your decision making by giving you the confidence and assurance that you’re taking the right decision

A

Being Well informed

20
Q

Accepting the one which is satisfactory for the benefit of the company

A

Satisficing

21
Q

Identify the difference between a win-lose situation and win-win situations

A

Conflict Management

22
Q

Types of Decisions

A
  1. Programmed and Non-Programmed Decision
  2. Strategic, Tactical and Operational Decisions
23
Q

Decisions made at the top level of the organization, and generally determine the organization’s overall direction

A

Strategic Decision

24
Q

Decision that are taken by mid-level managers to achieve goals and objectives set by their superiors

A

Tactical Decisions

25
Q

Day-to-day decisions made by employees and lower level managers to ensure targets are met and the business is running smoothly

A

Operational Decisions

26
Q

Behavioural Aspects of Decision Making

A
  1. Bounded Rationality Model of Decision Making
  2. Intuitive Model of Decision Making
  3. Creative Model of Decision Making
27
Q

Measures the tendency of decision makers to make risky decisions

A

Risk Propensity

28
Q

Issues emerge when decision alternatives include conflicting moral or ethical considerations

A

Ethical Decision Making

29
Q

Challenges in Decision Making

A

• Overconfidence Bias
• Hindsight Bias
• Anchoring
• Framing Bias
• Escalation of Commitment
• Groupthink

30
Q

Decision makers overestimate their capability to forsee future events.

Can lead to risky behaviour and faulty decision making

A

Overconfidence Bias

31
Q

Individuals look back and view events as more predictable than they really are.

Managers may project this bias into others when something goes wrong

A

Hindsight Bias

32
Q

The tendency for decision makers to rely too much on one piece of information.

May result in lost opportunities of fault decision.

A

Anchoring

33
Q

The way a situation is presented has a strong influence on decision makers.

May lead to poor decisions simply based on how a problem is framed

A

Framing Bias

34
Q

People proceed on a failing course of action because they already invested in it.

Managers fear admitting their mistakes or believe they can recover their losses.

A

Escalation of Commitment

35
Q

Members of a group put pressure on each other to conform and reach consensus, there by increasing the risk of flawed decisions.

Reduces mental efficiency, reality testing, and moral judgement in making decisions.

A

Groupthink

IENG 55 (MIDTERMS) (3 decks)

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