Understanding management decision making

Question 1

What three factors affect decision making

Answer 1

Hunch, scientific, experience

Question 2

What are benefits of decision trees?

Answer 2

• Choices set out in a logical way
• The use of probabilities help organise the risk
• Easy to understand

Question 3

What are disadvantages of decision trees?

Answer 3

• Probabilities are just estimates and aren’t always accurate
• Probabilities may be biassed

Question 4

What influences the decision making?

Answer 4

• Ethics
• The risk involved
• The missions and objectives

Question 5

What is the difference between risk and uncertainty?

Answer 5

Risk- you have a prediction of the outcome, whereas outcome you don’t know/predict the outcome