Deck 4: Foundations of Decision Making

Question 1

Which of the following defines a problem in the decision-making process?

A)a discrepancy between what exists and what the decision maker desires to exist
B)a discrepancy between the ideal and the practical
C)something that causes irritation
D)something that calls for attention

Answer 1

A

Question 2

After purchasing new computers for her department, a manager is now comparing the performance of the new computers to the computers they replaced.Which stage of the decision-making process is she carrying out?

A)analysis of alternatives
B)evaluation of decision effectiveness
C)selection of an alternative
D)implementation of an alternative

Answer 2

B

Question 3

A manager can faithfully execute the decision-making process but still end up with nothing of value if ________.

A)he fails to identify the correct problem
B)he fails to assign number values to different criteria
C)he solves the problem inefficiently
D)he fails to correctly identify the steps of the process

Answer 3

A

Question 4

What is a heuristic?

A)a complicated and systematic method of decision making
B)a purely intuitive method of decision making
C)a totally unreliable method of decision making
D)a shortcut or rule of thumb that is used for decision making

Question 5

Decision making begins with ________.

A)selecting alternatives
B)identifying decision criteria
C)identifying a problem
D)eliminating false alternatives

Question 6

One legislator sees decreased tax revenue as the key problem in the budget.A second legislator sees increased spending as the problem.Each of these legislators has a(n)________.

A)representation bias
B)self-serving bias
C)availability bias
D)framing bias

Question 7

Which of the following would be a fairly objective criterion by which a bicycle buyer could assess different bike models?

A)color
B)weight
C)quality of craftsmanship
D)style

Question 8

Because they are not systematic or comprehensive, using heuristics in place of an eight-step decision-making process can lead to ________.

A)errors and biases
B)consistently better decisions
C)more imaginative decisions
D)decisions that more directly solve problems

Question 9

Which of the following is NOT a reason why managers often resort to using heuristics?

A)They seem to eliminate complexity.
B)They seem to eliminate ambiguity.
C)They save time.
D)They thoroughly explore all alternatives.

Question 10

The decision-making process consists of a series of eight steps that identify a problem and work toward ultimately ________.

A)determining if there is a solution to the problem
B)solving the problem
C)making a plan to solve the problem
D)breaking down the problem into a series of steps

Question 11

A manager chooses to ignore a rigorous decision-making process and selects TV monitor A over monitor B because he "trusts" company A more than company B.If the decision he made was rational, which of the following is true?

A)Monitor A is really the better choice.
B)The manager should have included "trust" as a criterion.
C)Monitor B is really the better choice.
D)The manager must have made a mistake in calculating his weighted criteria.

Question 12

A manager is determining what kind of new computers she should purchase for her department.She has made a list of five different computer models for consideration.Which stage of the decision-making process is this?

A)selection of an alternative
B)identification of decision criteria
C)development of alternatives
D)analysis of alternatives

Question 13

To identify a problem, a manager ________.

A)compares one set of standards or goals to a second set of standards or goals
B)looks for unhappy customers
C)uses intuition to see that things don't look right
D)compares the current state of affairs with some standard or goal

Question 14

In allocating weights to the decision criteria, which of the following is most helpful to remember?

A)All weights must be the same.
B)The total of the weights must equal 100.
C)The high score should be a 10, and no two criteria should be assigned the same weight.
D)Assign the most important criterion a score, and then assign weights against that standard.

Question 15

Which of the following is LEAST likely to be a decision criterion for a high-tech bicycle buyer who cares primarily about performance?

A)warranty
B)gear mechanism
C)frame composition
D)brake assembly

Question 16

Which of the following is NOT a common decision-making error or bias?

A)sunk costs
B)randomness
C)forest for the trees
D)overconfidence bias

Question 17

A manager is considering purchasing new computers for her department.The manager spends time assessing the computers her department now has.Which stage of the decision-making process is she going through?

A)identification of a problem
B)identification of decision criteria
C)development of alternatives
D)implementation of an alternative

Question 18

For a high-tech bicycle buyer, decision criteria would be determined by ________.

A)whatever most bike buyers recommend
B)expert ratings in bike magazines
C)technical specifications
D)personal preferences of the buyer

Question 19

A scientist cites two studies that show a positive effect for her drug and ignores five other studies that show a negative effect.Which error or bias is she committing?

A)hindsight
B)anchoring effect
C)confirmation bias
D)self-serving

Question 20

A banker opts for short-term gain despite indications that his decision might not pay off in the long run.Which error or bias is the banker guilty of?

A)overconfidence
B)immediate gratification
C)selective perception bias
D)representation

Question 21

Because heuristics simplify the decision-making process, they are unlikely to lead to errors.

Question 22

In a short essay, list and discuss the final four steps in the decision-making process.Give an example of each step.

Question 23

A heuristic can simplify the decision-making process.

Question 24

In a short essay, list and discuss the first four steps in the decision-making process.Give an example of each step.

Question 25

Sondra has determined that the speed of the system she settles on is twice as important as the capacity of the system.Which stage of the decision-making process is she carrying out?

A)allocation of weights to criteria
B)selecting an alternative
C)implementing the alternative
D)identifying the problem

Question 26

It is assumed that a rational decision maker ________.

A)would never make a wrong choice
B)would be subjective and impractical
C)would face only difficult decisions
D)would be objective and logical

Question 27

The final step of the decision-making process is to implement the alternative that has been selected.

Question 28

Sondra has decided to collect information about the features the company needs for its system.Which stage of the decision-making process is she carrying out?

A)identify alternative solutions
B)identify decision criteria
C)evaluate her decision's effectiveness
D)allocate weights to the criteria

Question 29

The three main models that managers use to make decisions are ________.

A)rational, bounded rational, and intuitive
B)rational, irrational, and bounded rational
C)intuitive, unintuitive, and rational
D)bounded rational, intuitive, and systematic

Question 30

A basketball coach who takes a very good shooter out of a game because she missed her last two shots has availability bias.

Question 31

Managers identify a problem by comparing the current state of affairs to some standard.

Question 32

A decision criterion defines factors that are relevant in a decision.

Question 33

The very last step Sondra should take, according to the decision-making process, is to ________.

A)analyze alternative solutions
B)select alternatives
C)implement the alternative
D)evaluate the decision's effectiveness

Question 34

What does it mean for a decision maker to maximize value?

A)to make the decision to be as clear and logical as possible
B)to make the achievement of goals as likely as possible
C)to waste as little time and energy as possible
D)to make decision making as simple as possible

Question 35

In decision making, a problem can be defined as a discrepancy between what exists and what the problem solver desires to exist.

Question 36

All criteria are equally important in the decision-making process.

Question 37

Decision makers who seek information that matches what they already know are guilty of confirmation bias.

Question 38

Identifying the wrong problem is just as much a failure for a manager as identifying the right problem and failing to solve it.

Question 39

Sondra has decided to purchase a new system.After obtaining permission, she has ordered the system from a reputable company.Which stage of the decision-making process is she carrying out in making the order?

A)analyzing alternative solutions
B)selecting an alternative
C)implementing the alternative
D)identifying the problem

Question 40

According to the decision-making process, the first step Sondra should take is to ________.

A)analyze alternative solutions
B)identify decision criteria
C)evaluate her decision's effectiveness
D)identify the problem

Question 41

Which of the following is NOT assumed in a rational decision?

A)a clear and specific goal
B)a clear and unambiguous problem
C)most alternatives and consequences are known
D)value is maximized

Question 42

Neural networks are able to outdo the performance of humans by ________.

A)analyzing symbols
B)handling up to three variables at once
C)handling hundreds of variables at once
D)reading facial expressions

Question 43

Herbert Simon won the Nobel Prize in economics for his work in describing ________.

A)how people spend money
B)how most people are perfectly rational
C)how people make decisions
D)how people avoid decisions

Question 44

Which term best characterizes a decision that has bounded rationality?

A)virtually perfect
B)rigorous and comprehensive
C)not good enough
D)just good enough

Question 45

Compared to fully rational decision making, what is a major advantage of intuitive decision making?

A)total reliability
B)fully quantified
C)thoroughness
D)speed

Question 46

Intuitive decision making ________.

A)should be avoided by managers in making day to day decisions
B)is often described as conscious decision making
C)can complement other decision making approaches
D)takes more time than other approaches as it requires managers to shift through feelings and emotions and place them in context with actual facts.

Question 47

Neural networks outperform expert systems in uncovering ________.

A)credit card fraud
B)false positives for pregnancy
C)potential credit card customers
D)credit problems in bank mortgages

Question 48

Maximizing value for an organization means making sure that ________.

A)the organization makes money
B)the best interests of the organization are addressed
C)the decision made is as rational as possible
D)the decision is as simple as possible

Question 49

Neural networks differ from expert systems in that they can ________.

A)draw conclusions from data
B)ask questions to the decision maker
C)perform sophisticated calculations
D)learn from experience

Question 50

Herbert Simon found that in making decisions, most people satisficed because they had limited ability to ________.

A)be truthful and honest in situations that deal with other people
B)think independently
C)deal with difficult situations
D)grasp present conditions and anticipate future conditions

Question 51

Which of the following is NOT a way in which intuition guides people who are making decisions?

A)Intuition provides ethics and values guidelines.
B)Intuition provides a formal analysis method.
C)Intuition provides experiences to draw from.
D)Intuition draws on knowledge, skills, and training.

Question 52

Sticking to a decision despite evidence that it is a mistake is called ________.

A)escalation of commitment
B)escalation of rationality
C)satisficing commitment
D)error enhancement

Question 53

Which of the following is the best definition for the word satisfice?

A)very satisfying
B)not sufficient
C)accepts a less than perfect solution
D)requires a perfect solution

Question 54

It is assumed that in most cases the decisions of all managers are limited by ________.

A)greed and short-sightedness
B)having too much information
C)not being able to analyze all information for all alternatives
D)not being able to act rationally or in the best interests of their organization

Question 55

Which model of decision making takes advantage of unconscious reasoning?

A)rational
B)nonrational
C)intuitive
D)factual

Question 56

What percentage of managers typically use intuitive decision making rather than formal analysis to make decisions?

A)95%
B)75%
C)50%
D)less than 10%

Question 57

Escalation of commitment can occur when people don't ________.

A)want to make a decision
B)want to admit that an earlier decision was flawed
C)accept current conditions
D)understand that conditions have changed

Question 58

Software programs that use a series of questions to aid humans in decision making are called ________.

A)text reading software
B)expert systems
C)group systems
D)support software

Question 59

A person who satisfices fails to ________.

A)maximize his or her decision
B)understand his or her position
C)accept the truth of a situation
D)make any kind of decision

Question 60

Expert systems are primarily used to help what kinds of decision makers?

A)lower-level managers
B)top managers
C)senior managers
D)experts

Question 61

Which of the following is an example of an unstructured problem?

A)finding the list price of different copy machines
B)choosing the best wardrobe for an executive
C)comparing gas mileage for different car models
D)measuring pollution levels in a power plant

Question 62

Which of the following is NOT a type of programmed decision?

A)systematic procedure
B)policy
C)brainstorm
D)rule

Question 63

In a short essay, discuss the assumptions of rationality and the validity of those assumptions.

Question 64

Unstructured problems are ________.

A)perfectly rational
B)clear and straightforward
C)situations in which all options are known
D)situations in which all options are not known

Question 65

Programmed decisions work well for solving ________.

A)structured problems
B)unstructured problems
C)both structured and unstructured problems
D)poorly defined problems

Question 66

Intuitive decision making should not be a part of a manager's decision-making process.

Question 67

One assumption of bounded rationality is that managers usually attempt to make rational decisions.

Question 68

A rational decision will never fail to provide the best and most successful solution to a problem.

Question 69

A synonym for the word satisfice is maximize.

Question 70

One assumption of bounded rationality is that managers can analyze all relevant information about all alternatives for a situation.

Question 71

Which of the following is an example of a structured problem?

A)designing a new MP3 player
B)hiring a lawyer
C)deciding shipping options for a vacuum cleaner
D)drafting a quarterback for a pro football team

Question 72

Intuitive decision making is systematic, logical, and orderly.

Question 73

Structured problems typically have ________ while unstructured problems typically have ________.

A)only one solution; many solutions
B)many solutions; one solution
C)many solutions; fewer solutions
D)two solutions; three solutions

Question 74

Emotions and feelings ________ decision making.

A)often have no effect on
B)can improve
C)always decrease performance in
D)are more important than facts and logic in

Question 75

Structured problems are ________.

A)ambiguous
B)undefined and vague
C)clear and straightforward
D)incomplete

Question 76

In a short essay, discuss bounded rationality and satisficing.

Question 77

Programmed decisions draw heavily on which of the following?

A)mistakes made in the past
B)past solutions that were successful
C)past solutions that were unsuccessful
D)innovative, new solutions

Question 78

Being completely rational is a realistic goal for today's managers.

Question 79

The expression "throwing good money after bad" is an example of an escalation of commitment.

Question 80

Personal judgments and emotions should always be strictly ignored in a decision-making process.