Lesson 2: Decision-making

Question 1

The engineer manager’s __________ skills will be very crucial to his success as a professional.

Answer 1

decision-making

Question 2

DECISION-MAKING AS A MANAGEMENT RESPONSIBILITY

The higher the management level is, the bigger and the (more or less?) complicated decision-making becomes.

Answer 2

more

Question 3

WHAT IS DECISION-MAKING?

It is the process of identifying and choosing alternative courses of action in a manner appropriate to the demands of the situation.

Answer 3

Decision-making

Question 4

Decision-making, according to ________ and others, “is the heart of all the management functions.

Decisions are made at various management levels (i.e., top, middle, and lower levels) and at various management functions (i.e., planning, organizing, directing, and controlling).

Answer 4

Nickels

Question 5

THE DECISION-MAKING PROCESS

Rational decision-making, according to David H. Holt, is a process involving the 8 steps:

Give them all.

Answer 5

1. diagnose problem
2. analyze environment
3. articulate problem or opportunity
4. develop viable alternatives
5. evaluate alternatives
6. make a choice
7. implement decision
8. evaluate and adapt decision results

Question 6

THE DECISION-MAKING PROCESS

An expert once said “______________________ is tantamount to having the problem half-solved.”

Answer 6

identification of the problem

Question 7

THE DECISION-MAKING PROCESS

It occurs when there is a difference between an actual situation and a desired situation.

Answer 7

Problem

Question 8

THE DECISION-MAKING PROCESS

The objective of environmental analysis is the identification of constraints, which may be spelled out as either _________ or ___________ limitations.

Answer 8

internal, external

Question 9

THE DECISION-MAKING PROCESS

Give three examples of internal limitations.

Answer 9

1. Limited funds available for the purchase of equipment.
2. Limited training on the part of employees.
3. ill-designed facilities.

Question 10

THE DECISION-MAKING PROCESS

Give three examples of external limitations.

Answer 10

1. Patents are controlled by other organizations.
2. A very limited market for the company’s products and services exists.
3. Strict enforcement of local zoning regulations.

Question 11

THE DECISION-MAKING PROCESS

The environment consists of two major concerns:

Answer 11

internal, external

Question 12

THE DECISION-MAKING PROCESS

The _________ environment refers to organizational activities within a firm.

Answer 12

internal

Question 13

THE DECISION-MAKING PROCESS

The __________ environment refers to variables that are outside the organization and not typically within the short-run control of top management.

Answer 13

external

Question 14

THE DECISION-MAKING PROCESS

Oftentimes, problems may be solved by any of the solutions offered. The best among the alternative solutions must be considered by management. This is made possible by using a procedure with the following steps:

Answer 14

1. Prepare a list of alternative solutions.
2. Determine the viability of each solutions.
3. Revise the list

Question 15

THE DECISION-MAKING PROCESS

Proper ___________ makes choosing the right solution less difficult.

Answer 15

evaluation

Question 16

THE DECISION-MAKING PROCESS

_________ suggests that “each alternative must be analyzed and evaluated in terms of its value, cost, and risk characteristics.”

Answer 16

Souder

Question 17

THE DECISION-MAKING PROCESS

The ___________________________ refers to benefits that can be expected.

Answer 17

value of the alternatives

Question 18

THE DECISION-MAKING PROCESS

The _______________________ refers to out-of-pocket costs.

Answer 18

cost of the alternative

Question 19

THE DECISION-MAKING PROCESS

The _____________________ refer to the likelihood of achieving the goals of the alternatives.

Answer 19

risk characteristics

Question 20

THE DECISION-MAKING PROCESS

__________________ refers to the process of selecting among alternatives representing potential solutions to a problem.

Answer 20

Choice-making

Question 21

THE DECISION-MAKING PROCESS

________________ refers to carrying out the decision so that the objectives sought will be achieved. To make implementation effective, a plan must be devised.

Answer 21

Implementation

Question 22

THE DECISION-MAKING PROCESS

In implementing the decision, the results expected may or may not happen. It is, therefore, important for the manager to use ________ and ___________ mechanisms

Answer 22

control and feedback

Question 23

THE DECISION-MAKING PROCESS

____________ refers to the process which requires checking at each stage of the process to assure that the alternatives generated, the criteria used in evaluation and the solution selected for implementation are in keeping with the goals and objectives originally specified.

Answer 23

Feedback

Question 24

THE DECISION-MAKING PROCESS

______________ refers to actions made to ensure that activities performed match the desired activities or goals, that have been set.

Answer 24

Control

Question 25

APPROACHES IN SOLVING PROBLEMS Give the 2 approaches.

Answer 25

1. qualitative evaluation, and 2. quantitative evaluation.

Question 26

APPROACHES IN SOLVING PROBLEMS This term refers to evaluation of alternatives using intuition and subjective judgment.

Answer 26

Qualitative Evaluation

Question 27

APPROACHES IN SOLVING PROBLEMS This term refers to the evaluation of alternatives using any technique in a group classified as rational and analytical.

Answer 27

Quantitative Evaluation

Question 28

QUANTITATIVE MODELS FOR DECISION-MAKING The types of quantitative techniques which may be useful in decision-making are as follows:

Answer 28

1. inventory models 2. queuing theory 3. network models 4. forecasting 5. regression analysis 6. simulation 7. linear programming 8. sampling theory 9. statistical decision theory

Question 29

QUANTITATIVE MODELS FOR DECISION-MAKING Inventory models consist of several types all designed to help the engineer manager make decisions regarding inventory. They are as follows:

Answer 29

1. Economic order quantity model 2. Production order quantity model 3. Back order inventory model 4. Quantity discount model

Question 30

QUANTITATIVE MODELS FOR DECISION-MAKING This one is 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.

Answer 30

1. Economic order quantity model

Question 31

QUANTITATIVE MODELS FOR DECISION-MAKING This is an economic order quantity technique applied to production orders.

Answer 31

2. Production order quantity model

Question 32

QUANTITATIVE MODELS FOR DECISION-MAKING This is an inventory model used for planned shortages.

Answer 32

3. Back order inventory model

Question 33

QUANTITATIVE MODELS FOR DECISION-MAKING An inventory model used to minimize the total cost when quantity discounts are offered by suppliers.

Answer 33

4. Quantity discount model

Question 34

QUANTITATIVE MODELS FOR DECISION-MAKING It is one that describes how to determine the number of service units that will minimize both customer waiting time and cost of service.

Answer 34

Queuing Theory

Question 35

QUANTITATIVE MODELS FOR DECISION-MAKING These are models where large complex tasks are broken into smaller segments that can be managed independently.

Answer 35

Network Models

Question 36

QUANTITATIVE MODELS FOR DECISION-MAKING A technique which enables engineer managers to schedule, monitor, and control large and complex projects by employing three time estimates for each activity.

Answer 36

The Program Evaluation Review Technique (PERT)

Question 37

QUANTITATIVE MODELS FOR DECISION-MAKING 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.

Answer 37

The Critical Path Method (CPM)

Question 38

QUANTITATIVE MODELS FOR DECISION-MAKING It may be defined as "the collection of past and current information to make predictions about the future.

Answer 38

Forecasting

Question 39

QUANTITATIVE MODELS FOR DECISION-MAKING It is a forecasting method that examines the association between two or more variables.

Answer 39

Regression model

Question 40

QUANTITATIVE MODELS FOR DECISION-MAKING It is a model constructed to represent reality, on which conclusions about real-life problems can be used.

Answer 40

Simulation

Question 41

QUANTITATIVE MODELS FOR DECISION-MAKING It is a quantitative technique that is used to produce an optimum solution within the bounds imposed by constraints upon the decision.

Answer 41

Linear programming

Question 42

QUANTITATIVE MODELS FOR DECISION-MAKING It 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.

Answer 42

Sampling Theory

Question 43

QUANTITATIVE MODELS FOR DECISION-MAKING It refers to the "rational way to conceptualize, analyze, and solve problems in situations involving limited, or partial information about the decision environment."

Answer 43

Statistical Decision theory

Question 44

QUANTITATIVE MODELS FOR DECISION-MAKING Its purpose is to revise and update the initial assessments of the event probabilities generated by the alternative solutions.

Answer 44

Bayesian analysis

Question 45

QUANTITATIVE MODELS FOR DECISION-MAKING ______________ selects the decision alternative having the maximum expected payoff, or the minimum expected loss if he is working with a loss table.

Answer 45

Bayes criterion