Exam 8: Decision Making

In a short essay,discuss the assumptions of rationality,the validity of those assumptions and the influence of bounded rationality in decision-making.

A manager who desires to minimize his or her maximim "regret" will opt for a ________ choice.

If an individual knows the price of three similar cars at different dealerships,he or she is operating under what type of decision-making condition?

Decision-Making Conditions: Keep on Truckin' (Scenario) Fiona Lui is general manager of Westcoast Trucks, a medium-sized hauling service located in Vancouver, B.C. She is responsible for scheduling trucks, initiating new routes, and staffing both existing and new routes. She is currently struggling to find more information about the profitability of existing and future truck routes. -If Fiona wishes to minimize her regret about the truck route decision,she should follow a ________ strategy.

Management Decisions: Declining Income (Scenario) Net income has fallen for the second consecutive quarter, and Amanda is understandably worried. She knows there will be a lot of questions for her at the board of directors meeting Wednesday, and she will be expected to reveal her plan to avoid any third-quarter losses. Amanda begins to analyze the company's financial reports to try to determine the cause of the loss. After much consideration, it appears that expenses have risen dramatically over the last few months. Amanda wonders why. She decides a meeting of the department heads is in order first thing tomorrow morning. At the meeting, Amanda would like to generate several possible solutions to the increased expenses. She wonders how to effectively explore all the options. Next morning, the first option presented at the meeting is to downsize the research and development department, since it is not essential to current operations. Several managers believe the plan will help stem the losses and immediately move to approve it. However, Amanda suggests that they need to look further at the issue and explore other potential solutions. Several suggestions are made, many of which appear to be viable. Amanda wonders what to do next. -According to the decision-making process,the second step Amanda should take is to ________.

One assumption of rationality is that time and cost constraints exist.

A satisficing decision is one that is satisfactory and sufficient in the situation,and meets an acceptable level of performance.

Which of the following steps in the decision-making process occurs before developing alternatives?

Managerial decision-making is assumed to be rational.

The phenomenon of escalation of commitment refers to an increased commitment to a previous decision despite evidence that it may have been wrong.

Types of Problems and Decisions (Scenario) It seems Dave spends most of his day making decisions. Every time he turns around, someone wants him to make a decision about something. This morning, the office assistant came in and asked if she could reorder paper for the fax machine. That seemed like a routine decision that he should not have to deal with. If Dave could avoid those types of decisions, then he could focus more time and attention on the more complicated issues, such as the one presented to him by the production supervisor this afternoon. According to the supervisor, a major piece of equipment urgently needs repairs, and the repair bill could cost almost as much as a new machine! -The problem of whether to order more fax paper is ________.

Toby is hunting for a new apartment.He is specifically looking for one that is located in the heart of the city and should be available for $600 per month.However,Toby is also willing to pay up to $850 per month for a place situated slightly away from the city centre.According to him,the second option "will also do." This is an example of ________.

Decision-making Biases (Scenario) Frank is president of Mega Manufacturing, a Canadian company that makes automobile parts. Sales and profits are down sharply this quarter, and Frank needs to analyze the series of events that have led to the poor performance. Frank begins by reviewing his recent interactions with Mike, the vice-president of sales. -Mike advised Frank that he would be taking his newest sales executive,Eric,along on the trip to the Japanese auto maker's headquarters in Tokyo.When Frank asked how Eric was hired,Mike said,"Eric went to the same university as me,so I knew he had to be good!" Mike's comment demonstrates which of the following?

Collecting and using "big data" to make decisions requires ________.

Which of the following decisions involves the management function of controlling?

The decision-making process begins by identifying decision criteria.

"Before a health claim may be paid,the following steps must be taken" is an example of a ________.

A policy is a series of interrelated sequential steps that a manager can use for responding to a structured problem.

To receive reimbursement for their travel expenses,managers at ABC Company must first list each item in chronological order on an expense form,then attach all receipts to the upper-left corner,then obtain their supervisor's authorizing signature,and,finally,forward the form to the finance department.This is an example of a ________.

Intuitive decision making complements rational decision making but not bounded rational decision making.