decision making models

Question 1

what are the 3 types of decisions made by a business?

Answer 1

strategic, tactical, operational.

Question 2

what are strategic decisions?

Answer 2

long term and will affect direction business takes, made by senior managers.

Question 3

what are tactical decisions?

Answer 3

short to medium term implement strategic decisions. less complex. more flexible.

Question 4

what are operational decisions?

Answer 4

day to day decisions made in business. low risk short term.

Question 5

importance of decision making?

Answer 5

can solve big problems for common good of business.
minimise risk.

Question 6

what are the 2 ways of making decisions?

Answer 6

science and intuition.

Question 7

5 steps involved in scientific method of decision making?

Answer 7

identify problem
collect relevant info (primary/secondary)
analyse info
make and implement decision
review decision.

Question 8

what is intuitive decision making?

Answer 8

use experience and gut feelig to make decision with no data to back up.

Question 9

benefits of decision trees?

Answer 9

lays out problems so all options considered.
fully analyse possible outcomes
provides framework to quantify values of outcomes and probabilities of achieving them.
uses historical data
show probability of success and failure

Question 10

limitations of decision trees?

Answer 10

probabilities may be inaccurate.
may oversimplify decision and focus too much on financial outcome.
time consuming.

Question 11

what is critical path analysis?

Answer 11

method of planning and controlling large projects and helps make decisions on management of resources and time

Question 12

what does CPA allow a business to do?

Answer 12

plan activities involved in projects so that project is completed in most efficient way.
allocate resources within project
judge how long project should take.

Question 13

what is a critical task?

Answer 13

one that must be started and completed on time for project to be finished on time.

Question 14

how is the critical path indicated?

Answer 14

double slashes along it.

Question 15

what’s the number underneath the path?

Answer 15

duration of task.

Question 16

whats’ the top right hand side of node in CPA?

Answer 16

earliest possible start time of next activity.

Question 17

what’s the bottom right hand node in CPA

Answer 17

latest time the previous activity can finish by.

Question 18

how can you identify the critical path?

Answer 18

activities where node has same EST and LFT.

Question 19

what happens if there’s delay on the CP?

Answer 19

overall project is delayed.

Question 20

advantages of CPA?

Answer 20

effective for managing complex projects.
effective management of resources and labour.
reduces need for unneeded working capital.
improves cash flow due to less working capital
can see efficiency of individual activities and if extra training is needed.
competitive advantage by being more efficient.

Question 21

disadvantages of CPA?

Answer 21

poor methods of estimation may be used.
lack of experience leads to inaccuracies.
ignores external factors.
manager can’t control subcontractors.
time consuming and needs ongoing checking.
doesn’t ensure quality.

Question 22

what is cost benefit analysis?

Answer 22

method of assessing viability of project based on social costs and benefits. both private and public costs must be considered.

Question 23

example of private costs?

Answer 23

equipment, land marketing.

Question 24

example of private benefits?

Answer 24

productivity, sales, brand awareness, increased profits.

Question 25

examples of public costs?

Answer 25

traffic, noise, pollution.

Question 26

example of public benefit?

Answer 26

new jobs, happier community, more tax paid.

Question 27

drawbacks of CBA?

Answer 27

not quantifiable. some of the costs are intangeable.
subjective.
if incorrect calculated, wrong choice may be made.

Question 28

benefits of CBA?

Answer 28

takes external factors into account.
can be used to rank possible projects in order of public costs.
impact on community included.

Question 29

what can computer technology be used for?

Answer 29

day to day decisions, ordering new stock and staffing levels.

Question 30

what can information systems be used for?

Answer 30

organise data then distribute to make most efficient decisions.

Question 30

what can management information systems be used for?

Answer 30

providing managers with info to make tactical and strategic decisions. collects and processes data.

Question 31

what can smart IT systems be used for?

Answer 31

improve decision making through use of internal and external data. decision trees and CPA can be done on computer to save time and accuracy..

Question 32

what can data processing technology be used for?

Answer 32

helps businesses deal with huge quantities of info in quick and efficient way to speed up decision making.

Question 33

what can financial information systems be used for?

Answer 33

analysis of financial and accounting data. can produce reports on cash flow and income statements. monitor balance sheets budgets and reducing paperwork.

Question 34

how can cookies be used?

Answer 34

personalised nature of below the line promotional strategies, customers shown things based on recent activity.

Question 35

why might a business use intuitive decision making?

Answer 35

quicker
may have enough experience
quicker
trends change so fast
can follow vision statement

Question 36

what is float time?

Answer 36

spare time available for completion of any activity.

Question 37

CPA analysis evaluation question structure?

Answer 37

apply to diagram, quote numbers and activities.
start with definition.
PEK - useful helps managers identify critical activities (quote table)
H- reliability of suppliers
LTQ - useful w no delays

PEK- increase efficiency as everyone has target (quote diagram)
H- quality of work may be rushed
LTQ - useful w quality assurance
conclusion