Lesson 2: Decision-making Flashcards
The engineer manager’s __________ skills will be very crucial to his success as a professional.
decision-making
DECISION-MAKING AS A MANAGEMENT RESPONSIBILITY
The higher the management level is, the bigger and the (more or less?) complicated decision-making becomes.
more
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.
Decision-making
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).
Nickels
THE DECISION-MAKING PROCESS
Rational decision-making, according to David H. Holt, is a process involving the 8 steps:
Give them all.
- diagnose problem
- analyze environment
- articulate problem or opportunity
- develop viable alternatives
- evaluate alternatives
- make a choice
- implement decision
- evaluate and adapt decision results
THE DECISION-MAKING PROCESS
An expert once said “______________________ is tantamount to having the problem half-solved.”
identification of the problem
THE DECISION-MAKING PROCESS
It occurs when there is a difference between an actual situation and a desired situation.
Problem
THE DECISION-MAKING PROCESS
The objective of environmental analysis is the identification of constraints, which may be spelled out as either _________ or ___________ limitations.
internal, external
THE DECISION-MAKING PROCESS
Give three examples of internal limitations.
- Limited funds available for the purchase of equipment.
- Limited training on the part of employees.
- ill-designed facilities.
THE DECISION-MAKING PROCESS
Give three examples of external limitations.
- Patents are controlled by other organizations.
- A very limited market for the company’s products and services exists.
- Strict enforcement of local zoning regulations.
THE DECISION-MAKING PROCESS
The environment consists of two major concerns:
internal, external
THE DECISION-MAKING PROCESS
The _________ environment refers to organizational activities within a firm.
internal
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.
external
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:
- Prepare a list of alternative solutions.
- Determine the viability of each solutions.
- Revise the list
THE DECISION-MAKING PROCESS
Proper ___________ makes choosing the right solution less difficult.
evaluation
THE DECISION-MAKING PROCESS
_________ suggests that “each alternative must be analyzed and evaluated in terms of its value, cost, and risk characteristics.”
Souder
THE DECISION-MAKING PROCESS
The ___________________________ refers to benefits that can be expected.
value of the alternatives
THE DECISION-MAKING PROCESS
The _______________________ refers to out-of-pocket costs.
cost of the alternative
THE DECISION-MAKING PROCESS
The _____________________ refer to the likelihood of achieving the goals of the alternatives.
risk characteristics
THE DECISION-MAKING PROCESS
__________________ refers to the process of selecting among alternatives representing potential solutions to a problem.
Choice-making
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.
Implementation
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
control and feedback
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.
Feedback
THE DECISION-MAKING PROCESS
______________ refers to actions made to ensure that activities performed match the desired activities or goals, that have been set.
Control
APPROACHES IN SOLVING PROBLEMS
Give the 2 approaches.
- qualitative evaluation, and
- quantitative evaluation.
APPROACHES IN SOLVING PROBLEMS
This term refers to evaluation of alternatives using intuition and subjective judgment.
Qualitative Evaluation
APPROACHES IN SOLVING PROBLEMS
This term refers to the evaluation of alternatives using any technique in a group classified as rational and analytical.
Quantitative Evaluation
QUANTITATIVE MODELS FOR DECISION-MAKING
The types of quantitative techniques which 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
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:
- Economic order quantity model
- Production order quantity model
- Back order inventory model
- Quantity discount model
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.
- Economic order quantity model
QUANTITATIVE MODELS FOR DECISION-MAKING
This is an economic order quantity technique applied to production orders.
- Production order quantity model
QUANTITATIVE MODELS FOR DECISION-MAKING
This is an inventory model used for planned shortages.
- Back order inventory model
QUANTITATIVE MODELS FOR DECISION-MAKING
An inventory model used to minimize the total cost when quantity discounts are offered by suppliers.
- Quantity discount model
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.
Queuing Theory
QUANTITATIVE MODELS FOR DECISION-MAKING
These are models where large complex tasks are broken into smaller segments that can be managed independently.
Network Models
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.
The Program Evaluation Review Technique (PERT)
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.
The Critical Path Method (CPM)
QUANTITATIVE MODELS FOR DECISION-MAKING
It may be defined as “the collection of past and current information to make predictions about the future.
Forecasting
QUANTITATIVE MODELS FOR DECISION-MAKING
It is a forecasting method that examines the association between two or more variables.
Regression model
QUANTITATIVE MODELS FOR DECISION-MAKING
It is a model constructed to represent reality, on which conclusions about real-life problems can be used.
Simulation
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.
Linear programming
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.
Sampling Theory
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.”
Statistical Decision theory
QUANTITATIVE MODELS FOR DECISION-MAKING
Its purpose is to revise and update the initial assessments of the event probabilities generated by the alternative solutions.
Bayesian analysis
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.
Bayes criterion
