Question 1

In general, while identifying alternatives, the more important the decision, _____.

Accepted Answer

In general, while identifying alternatives, the more important the decision, the more alternatives should be generated.

Question 2

An alternative should be eliminated during evaluation if:

Accepted Answer

While selecting the best alternative in rational decision making, the best practice is to choose the alternative with the optimal combination of feasibility, satisfactoriness, and affordable consequences.

Question 3

Libra Inc. chose to settle a lawsuit for $75 million. In the context of the rational decision-making model, when executives of the company begin to compare the cost of the settlement to those of other financial institutions, they will be _____.

Accepted Answer

The final step of the rational decision-making model is illustrated in the scenario. The final step in the decision-making process requires that managers evaluate the effectiveness of their decision-that is, they should make sure that the chosen alternative has served its original purpose.

Question 4

When making a decision under a condition of risk:

Accepted Answer

When making decisions under a condition of risk, the decision maker is relatively more likely to make errors. Under a state of risk, the availability of each alternative and its potential payoffs and costs are all associated with probability estimates.

Question 5

The _____ decision model is a prescriptive approach that tells managers how they should make decisions; it assumes that managers are logical and rational and that their decisions will be in the organization's best interests.

Accepted Answer

The classical decision model is a prescriptive approach that tells managers how they should make decisions; it assumes that managers are logical and rational and that their decisions will be in the organization's best interests.

Question 6

The final step in the decision-making process requires that managers _____.

Accepted Answer

The final step in the decision-making process requires that managers evaluate the effectiveness of their decision-that is, they should make sure that the chosen alternative has served its original purpose.

Question 7

Tina works at a coffee shop. One of the four coffee machines at the coffee shop has not been functioning well; the same machine has broken down thrice in two weeks. Now, Tina is looking at the machine and trying to decide if the problem is a bad machine or if people are just using the machine wrong. Tina is currently _____.

Accepted Answer

Tina is currently in the first step of the rational decision-making model. The first step in rational decision making is recognizing that a decision is necessary.

Question 8

According to the classical decision model, managers:

Accepted Answer

The classical decision model is a prescriptive approach to decision making that tells managers how they should make decisions; it assumes that managers are logical and rational and that their decisions will be in the organization's best interests.

Question 9

A plant manager had taken a few measures to try to reduce worker turnover. For four months he monitored the implementation of the measures. He now finds that the turnover rate is reduced by 10 percent. Which step of the rational decision-making model is illustrated in the scenario?

Accepted Answer

The final step in the decision-making process requires that managers evaluate the effectiveness of their decision-that is, they should make sure that the chosen alternative has served its original purpose.

Question 10

After being laid off by their companies, many individuals recognized three options they could choose from before they could secure new jobs: to spend less, to use savings, or to use credit. In the context of the steps involved in the rational decision-making model, they were _____.

Accepted Answer

The laid-off employees were in the second step of the rational decision-making process. The second step in the decision-making process is identifying appropriate alternatives. Once the decision situation has been recognized and defined, the second step is to identify alternative courses of effective action.

Question 11

In which step of the rational decision-making model does the decision maker test the feasibility and satisfactoriness of alternatives before choosing one?

Accepted Answer

The third step in the decision-making process is evaluating each of the alternatives. Each alternative should be evaluated in terms of its feasibility, satisfactoriness, and consequences. The first question to ask is whether an alternative is feasible, i.e. if it is within the realm of probability and practicality.

Question 12

Which of the following statements is true in the context of selecting the best alternative?

Accepted Answer

One approach is to choose the alternative with the optimal combination of feasibility, satisfactoriness, and affordable consequences. Even though most situations do not lend themselves to objective, mathematical analysis, the manager can often develop subjective estimates and weights for choosing an alternative.

Question 13

Christine, a teacher, notices that the performances of her students at class tests have been declining. While attempting to find a solution to the problem, she thinks of three choices: rewarding students who get good grades, holding class tests more often, or punishing students when they perform poorly in the tests. Which step of the rational decision-making process is Christine in?

Accepted Answer

Christine is in the second step of the rational decision-making process. The second step in the rational-decision making process is identifying alternatives. Once the decision situation has been recognized and defined, the second step is to identify alternative courses of effective action. Developing both obvious, standard alternatives and creative, innovative alternatives is generally useful.

Question 14

The first step in rational decision making is _____.

Accepted Answer

Steps in rational decision making are as follows: recognize and define the decision situation; identify appropriate alternatives; evaluate each alternative in terms of its feasibility, satisfactoriness, and consequences; select the best alternative; implement the chosen alternative; and follow up and evaluate the results of the chosen alternative.

Question 15

Delta Corp. introduced a new set of policies, giving its employees more flexibility in work timings. This decision was made in response to complaints from employees about fatigue. Which step of the rational decision-making process is illustrated in the scenario?

Accepted Answer

Delta Corp. has implemented an alternative in the scenario. After an alternative has been selected, the next step is to put it into effect.

Question 16

In the rational decision-making process, optimization means:

Accepted Answer

Even though many alternatives fail to pass the triple tests of feasibility, satisfactoriness, and affordable consequences, two or more alternatives may remain. Choosing the best of these is the real crux of decision making. One approach is to choose the alternative with the optimal combination of feasibility, satisfactoriness, and affordable consequences; this is known as optimization.

Question 17

The rational decision-making process:

Accepted Answer

Evaluating alternatives is the third step in the rational decision-making process.

Question 18

When the prices of oil came down, the demand for sport utility vehicles (SUVs) increased. Automakers chose to increase production of full-size SUVs as the profit from large vehicles is greater than that from small vehicles. Which step in the rational decision-making model is illustrated in the scenario?

Accepted Answer

Automakers are implementing an alternative in the scenario. After an alternative has been selected, the next step is to put it into effect.

Question 19

In the rational decision-making model, once the alternatives have been evaluated, the next step is to _____.

Accepted Answer

In the rational decision-making model, once the alternatives have been evaluated, the next step is to select the best alternative.

Question 20

Peter was looking for alternatives to double his plant's production capacity, and he considered acquiring the production plant of a rival company. The engineers in Peter's company advised him against it because acquiring the new plant would only increase their company's production by 15 percent. Therefore, Peter's idea failed the test for _____ in the context of the rational decision-making process.

Accepted Answer

Peter's idea failed the test for satisfactoriness. The third step in the rational decision-making process is evaluating each of the alternatives. Each alternative should be evaluated in terms of its feasibility, satisfactoriness, and consequences.

Quiz 4: Managing Decision Making