Decision Making

Question 1

What are the the three pairs of types of decisions?

Answer 1

1. Routine and non-routine
2. Tactical and strategic
3. Proactive and reactive

Question 2

What is meant by routine and non-routine decisions?

Answer 2

Routine - Decisions made regularly

Non-routine - Decisions which occur irregularly (may be needed because of unexpected events)

Question 3

What is meant by tactical and strategic decisions?

Answer 3

Tactical - Short term decisions

Strategic - Decisions with long term implications

Question 4

What is meant by proactive and reactive decisions?

Answer 4

Proactive - Decisions taken in advance of events

Reactive - Decisions responding to events rather than shaping them

Question 5

What is critical path analysis?

Answer 5

A technique of organising and analysing tasks needed to undertake a complex project in order to determine the quickest and most efficient means of completing that project

Question 6

What does the critical path show?

Answer 6

The sequence of activities that must be completed on time for the whole project not to be delayed

Question 7

Advantages of critical path analysis?

Answer 7

1. Time is used more effectively by showing which tasks can be carried out simultaneously - minimise costs which improves cash flow & productively efficient
2. Planning start times = resources needed for each activity can be planned and made available at the appropriate time = reducing storage and other upfront costs
3. Meeting certain deadlines can save on costs and penalties for the firm
4. Easier to manage delays - implications can be identified and informed decisions can be easily made
5. Enhances profitability of the business because of the above.

Question 8

Disadvantages of critical path analysis?

Answer 8

1. Hard to represent complex activities on a network - external factors may change, making it inaccurate, impossible to follow and unmanageable
2. CPA depends on time durations of activities - if inaccurate, the whole project result will be inaccurate. It is difficult to predict timings.
3. Requires specialist software and project managers - small businesses could not access it.
4. Can cause complacency of the project
5. CPA will only work if specialist and relevant staff has been consulted

Question 9

What is statistical process control and what are they ways it could work?

Answer 9

A monitoring system based on statistics to ensure efficient production and quality standards.

1. Questionnaire - feedback on new service etc and when a negative responses demonstrate a large percentage of answers the company would make changes
2. Lasers on machines in a factory - monitoring quality control of products and if damages demonstrate a larger percentage of the products the firm could opt to make changes
   (recommend reading textbook if unclear p.190)