LESSON 2 Flashcards
is the responsibility of the engineer manager. It is understandable for managers to make wrong decisions at times. The wise manager will correct them as soon as they are identified. The bigger issue is the manager who cannot or doesn’t want to make decisions. Delaney concludes that this type of manager is dangerous and “should be removed from their position as soon as possible
Decision-making
is the process of identifying and choosing alternative courses of action in a manner appropriate to the demands of the situation.
Decision-making
What are the various managemnet levels?
Top
middle
lower levels
What are the various managemnet functions?
planning,
organizing,
directing, and
controlling
according to Nickels and others, “is the heart of all the management functions. “
Decision-making
Rational decision making according to ________?
David H. Holt
If a manager wants to make an intelligent decision, his first move must be to identify the problem. An expert once said, “Identification of the problem is tantamount to having the problem half solved
Diagnose Problem
it is exists when there is a difference between an actual situation and a desired situation.
Problem
The objective of environmental analysis is the identification of constraints, which may be spelled out as either internal or external limitations.
Analyze the Environment
it is refers to variables that are outside the organization and not typically within the short-run control of top management.
External environment
it is refers to organizational activities within a firm that surrounds decision-making.
Internal environment
Getting clear on what the problem is in any given situation can mean the difference between spending needless amounts of time and money or putting energy into the right areas of focus to get real results.
Articulate Problem or Opportunity
refers to the process of selecting among alternatives representing potential solutions to a problem. At this point, Webber advises that “…particular effort should be made to identify all significant consequences of each choice”.
Choice-making
refers to carrying out the decision so that the objectives sought will be achieved
Implementation
refers to the process which requires checking at each stage of the process to assure that the alternatives generated, the criteria used in the evaluation, and the solution selected for implementation are in keeping with the goals and objectives originally specified.
Feedback
refers to actions made to ensure that the activities performed to match the desired activities or goals that have been set.
Control
– refers to the evaluation of alternatives using intuition and subjective judgment
Qualitative Evaluation
– refers to the evaluation of alternatives using any technique in a group classified as rational and analytical
Quantitative Evaluation
The types of quantitative techniques that may be useful in decision-making are as follows:
- Inventory models
- Queuing theory
- Network models
- Forecasting
- Regression analysis
- Simulation
- Linear programming
- Sampling theory
- Statistical decision theory
– used to calculate the number of items that should be ordered at one time to minimize the total yearly cost of placing orders and carrying the items in inventory.
Economic order quantity model
– this is an economic order quantity technique applied to production orders.
Production order quantity model
– this is an inventory model used for planned shortages
Back order inventory model
– an inventory model used to minimize the total cost when quantity discounts are offered by suppliers.
Quantity discount model
is one that describes how to determine the number of service units that will minimize both customers’ waiting time and the cost of service.
Queuing theory
is applicable to companies where waiting lines are a common situation.
Queuing theory
These are models where large complex tasks are broken into smaller segments that can be managed independently.
Network Model
– a technique that enables engineer managers to schedule, monitor, and control large and complex projects by employing three-time estimates for each activity.
The Program Evaluation Review Technique (PERT)
– this is a network technique using only one- time factor per activity that enables engineer managers to schedule, monitor, and control large and complex projects.
The Critical Path Method (CPM)
may be defined as “the collection of past and current information to make predictions about the future.”
Forecasting
is a forecasting method that examines the association between two or more variables. It uses data from previous periods to predict future events.
Regression Model
may be simple or multiple depending on the number of independent variables present. When one independent variable is involved, it is called simple regression; when two or more independent variables are involved, it is called multiple regression
Regression analysis
is a model constructed to present reality, on which conclusions about real-life problems can be used. It is a highly sophisticated tool by means of which the decision-maker develops a mathematical model of the system under consideration.
Simulation
is a quantitative technique that is used to produce an optimum solution within the bounds imposed by constraints upon the decision.
Linear programming
is very useful as a decision-making tool when supply and demand limitations at plants, warehouses, or market areas are constraints upon the system.
Linear programming
is a quantitative technique where samples of populations are statistically determined to be used for a number of processes, such as quality control and marketing research.
Sampling Theory
refers to the “rational way to conceptualize, analyze, and solve problems in situations involving limited, or partial information about the decision environment”.
Decision theory
is to revise and update the initial assessments of the event probabilities generated by the alternative solutions. This is achieved by the use of additional information.
Bayesian analysis
