Deck 3: Foundations of Decision Making

Question 1

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 employees
C)seeks confirmation from other managers
D)compares the current state of affairs with some standard or goal

Answer 1

D

Question 2

Decision making begins with ________.

A)eliminating false alternatives
B)analysis of alternatives
C)identifying a problem
D)selecting alternatives

Answer 2

C

Question 3

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.

Answer 3

C

Question 4

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)Implementing the alternative.
C)Identifying the problem.
D)Selecting an alternative.

Question 5

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)Evaluation of decision effectiveness.
B)Analysis of alternatives.
C)Selection of an alternative.
D)Implementation of an alternative.

Question 6

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

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

Question 7

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

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

Question 8

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)Selecting an alternative.
B)Development of alternatives.
C)Identification of a problem.
D)Evaluation of decision effectiveness.

Question 9

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 decision criteria.
B)Evaluate her decision's effectiveness.
C)Identify alternative solutions.
D)Allocate weights to the criteria.

Question 10

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

Question 11

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)Confirmation bias.
B)Anchoring effect.
C)Overconfidence bias.
D)Framing bias.

Question 12

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)Selective perception bias.
B)Immediate gratification.
C)Representation.
D)Overconfidence.

Question 13

A manager chooses to ignore a rigorous decision-making process and select 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)The manager should have included 'trust' as a criterion.
B)Monitor A is really the better choice.
C)The manager must have made a mistake in calculating his weighted criteria.
D)Monitor B is really the better choice.

Question 14

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

A)A discrepancy between the ideal and the practical.
B)A hindsight bias has been identified.
C)A discrepancy between what exists and what the decision-maker desires to exist.
D)When 'rules of thumb' are not used.

Question 15

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

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

Question 16

What is a heuristic?

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

Question 17

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

A)Handling.
B)Style.
C)Weight.
D)Quality of craftsmanship.

Question 18

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

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

Question 19

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)Implementing the alternative.
B)Selecting an alternative.
C)Identifying the problem.
D)Analysing alternative solutions.

Question 20

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

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

Question 21

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

Question 22

The second step in the decision-making process is identifying the decision criteria.

Question 23

All criteria are not equally important in the decision-making process.

Question 24

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

Question 25

Which term best characterises a decision that has bounded rationality?

A)Rigorous and comprehensive.
B)Virtually perfect.
C)Good enough.
D)Not good enough.

Question 26

What is a decision implementation?

Question 27

The final step of the decision-making process is the development of alternatives.

Question 28

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

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

Question 29

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

Question 30

What does it mean for a decision-maker to maximise value?

A)To make the decision to be as clear and logical as possible.
B)To use as little resources as possible.
C)To make the achievement of goals as likely as possible.
D)To make decisions as quickly as possible.

Question 31

A heuristic can simplify the decision-making process.

Question 32

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

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

Question 33

It is assumed that a rational decision-maker ________.

A)would be objective and logical
B)would be emotional and impractical
C)would never make a wrong choice
D)would excel in all aspects of life

Question 34

Which of the following is assumed in a rational decision?

A)Value is maximised.
B)A clear and specific goal.
C)A clear and unambiguous problem.
D)All of the above.

Question 35

Neural networks,and not expert systems,are used by banks in uncovering ________.

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

Question 36

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

A)bounded rational,intuitive,systematic
B)rational,bounded rational,intuitive
C)intuitive,systematic,heuristic
D)rational,irrational,unbounded rational

Question 37

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

A)expert systems
B)totally quality systems
C)survey software
D)support software

Question 38

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

Question 39

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

A)handling hundreds of variables at once
B)handling up to ten variables at once
C)creating a detailed database of questions and answers
D)reading facial expressions

Question 40

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

Question 41

In a short essay,discuss bounded rationality and satisficing.

Question 42

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

A)confirmation bias
B)overconfidence bias
C)error enhancement
D)escalation commitment

Question 43

Structured problems are ________.

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

Question 44

Which model of decision making takes advantage of subconscious mental processing?

A)Non-rational.
B)Emotional.
C)Intuitive.
D)Bounded rationality.

Question 45

Compared to fully rational decision making,which of the following is NOT an advantage of intuitive decision making?

A)Thoroughness.
B)Total reliability.
C)Fully quantified.
D)All of the above.

Question 46

How often do managers typically use intuitive decision making?

A)Almost never.
B)Almost all of the time.
C)100 per cent of the time.
D)More than half of the time.

Question 47

A synonym for the word 'satisfice' is maximise.

Question 48

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

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

Question 49

Emotions should not always be ignored in a decision-making process.

Question 50

Intuitive decision making can complement ________.

A)rational decision making only
B)bounded rationality only
C)both rationality and bounded rationality
D)neither rationality nor bounded rationality

Question 51

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

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

Question 52

Rational decision making is logical,consistent,and aims for the best outcome.

Question 53

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

A)how almost all people are risk averted
B)how most people are perfectly rational
C)people's spending and saving behaviour
D)how people make decisions

Question 54

Emotions and feelings ________ decision making.

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

Question 55

What is an experience-based decision?

Question 56

A person who satisfices fails to ________.

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

Question 57

Managers are expected to make decisions which maximise value.

Question 58

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

A)Very satisfying.
B)Requires a perfect solution.
C)Accepts a less than perfect solution.
D)Not sufficient.

Question 59

Intuitive decision making is based on mysterious sensations and perceptions.

Question 60

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

Question 61

If a car buyer knows the price of the same car at different dealerships,he or she is operating under what type of decision-making condition?

A)Certainty.
B)Risk.
C)Factual.
D)Uncertainty.

Question 62

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

A)Choosing the best wardrobe for an executive.
B)Comparing fuel consumption for different car models.
C)Measuring pollution levels in a power plant.
D)Finding the list price of different copy machines.

Question 63

A basketball coach makes the decision to bench or not bench his aggressive defence player,based on the number of fouls he accumulated.Which decision-making method does the coach use?

A)A hunch.
B)A procedure.
C)A rule.
D)A policy.

Question 64

A manager has a choice of three investment funds.To assess them,he looks at their past investment records over the previous five years.The manager is operating under which condition?

A)Uncertainty.
B)Risk.
C)Certainty.
D)Probability.

Question 65

A manager has a choice of three different bank term deposits that pay different amounts of interest over different time periods.The manager is operating under which condition?

A)Jeopardy.
B)Certainty.
C)Risk.
D)Uncertainty.

Question 66

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

A)Brainstorm.
B)Systematic procedure.
C)Policy.
D)Rule.

Question 67

A retail clothing store manager who estimates how much to order for the current spring season based on last spring's outcomes is operating under what kind of decision-making condition?

A)Seasonal.
B)Uncertainty.
C)Risk.
D)Certainty.

Question 68

In a condition of certainty,________.

A)some alternatives are not known
B)most outcomes are known
C)the decision is already made
D)all outcomes of all alternatives are known

Question 69

Which of the following statements about problems and decisions is CORRECT?

A)Structured problems are best solved by programmed decisions.
B)Structured problems are best solved by structured decisions.
C)Unstructured problems are best solved by rigid decisions.
D)Unstructured problems are best solved by programmed decisions.

Question 70

Programmed decisions draw heavily on which of the following?

A)Past solutions that were unsuccessful.
B)Mistakes made in the past.
C)Innovative new solutions.
D)Past solutions that were successful.

Question 71

Programmed decisions work well for solving ________.

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

Question 72

Unstructured problems are ________.

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

Question 73

Non-programmed decisions tend to be routine.

Question 74

A judge consults guidelines before ordering the amount of damages to be paid in a legal case.What kind of decision making is she doing?

A)Following a policy.
B)Following the rule of law.
C)Non-programmed.
D)Unstructured and intuitive.

Question 75

Top managers in an organisation tend to ________.

A)solve structured problems
B)make non-programmed decisions
C)solve well-defined problems
D)make programmed decisions

Question 76

Implementing a procedure requires more judgment and interpretation than implementing a policy.

Question 77

A key to what is commonly used to assess risk is for a decision-maker to examine the ________ an investment.

A)historical data for
B)minor details of
C)ads posted by a company for
D)promises made by a company for

Question 78

________ is a situation in which a decision-maker has only incomplete information about outcomes and does not have the ability to reasonably estimate outcomes that are not known.

A)Low risk
B)Uncertainty
C)Risk
D)Certainty

Question 79

Which three conditions do decision-makers face?

A)Uncertainty,low risk,high risk.
B)Certainty,uncertainty,confidence.
C)Risk,high risk,low risk.
D)Certainty,risk,uncertainty.

Question 80

A low-level manager is most likely to solve problems under which condition?

A)Low risk.
B)Certainty.
C)Uncertainty.
D)Low certainty.