...Managerial Decisions Programmed Decisions Non-programmed Decisions Decision-making Under Certainty, Uncertainty and Risk Management Information System vs Decision Support System The Systems Approach to Decision-making Group Decision-making Forms of Group Decision-making Decision-making Techniques Summary Decision-making describes the process by which a course of action is selected to deal with a specific problem. The success of an organization depends greatly on the decisions of managers. There are two major types of models used by managers to make decisions - (1) rational model and (2) non-rational models. In the rational model, managers engage in rational decision-making processes. At the time of decision-making, they possess as well as understand all the information that is relevant to their decision. In contrast, non-rational models of managerial decision-making suggest that limitations of information-gathering and information-processing make it difficult for managers to make optimal decisions. The three non-rational models of decision-making discussed in the chapter are: satisficing, incremental, and garbage-can models. Any decision-making process contains seven basic steps: (1) identifying the problem; (2) identifying resources and constraints, (3) generating alternative solutions, (4) evaluating alternatives, (5) selecting an alternative, (6) implementing the decision, and (7) monitoring the decision. Managerial decisions are of two types - programmed...
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...that summarizes this study follows thereafter. I. INTRODUCTION “Consumer behavior reflects the totality of consumers’ decisions with respect to the acquisition, consumption and disposition of goods, services, activities, experiences, people and ideas overtime.” (Wayne D. Hoyer, Deborah J. Maclnnis 2008). This means that as much as the consumer will purchase a certain product e.g. soap, based on his preference of brands, he may also purchase a product such as a book just because it has been written by a popular author. Consumer decision making is about market choice behavior where consumers must make a decision between two or more competing alternatives, and thereafter decide on whether to purchase the alternative. The consumer decision making process is the stages that a consumer goes through in order to decide on the best alternative to purchase. The traditional decision making process makes an assumption that a consumer has to go through five stages before reaching his decision hence very important for a marketer to understand this process. II. DECISION MAKING – THE TRADITIONAL PROCESS The five stages in the traditional consumer decision making process include: Need recognition or...
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...Before identifying the issues and opportunities in the scenario, examine the Mind Map and read the text materials carefully identifying the concepts on the map. Write several introductory paragraphs identifying the key course concepts and theories that are illustrated in the scenario and note why they are important (do remember to cite your references to the text and/or selected readings). Then describe how the situation at the subject organization reflects these concepts and theories as related to the issues and opportunities the organization in the scenario is facing. When identifying conflicts, start by comparing and contrasting the interests, rights and values of the different key stakeholders. One must consider ethical dilemmas. A good way to do this is to think about how the values of the different stakeholders compete with each other. Some values to consider might be social responsibility, integrity, accountability, fairness, respect, and honesty, among others. STEP 2: Frame the “Right” Problem The problem must be broadly stated so that it will lead to many possibilities, and must be one where there can be no single answer. A litmus test for a problem statement: 1. It should be short and easily understood (25 words or less). 2. It should be about realizing opportunities. 3. It shouldn't have a solution or suggest a specific tactic—it should lend itself to many solutions. One way to begin to think about how to craft a problem statement is to think about...
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...management history starts further back in latter 19th century modern project management began in the early 1960s. The need of the project management increased with the development of business around projects and to communicate and co-ordinate work across departments and people. According to the PMBOK (2008) project defines as "temporary endeavour undertaken to create a unique product or service.Temparary means that every project has a definite end. Unique means that the product or service is different in some distinguishing way from all similar product or service." PMBOK (2004) analyse project management as “the application of knowledge, skills, tools and techniques to project activities in order to meet stakeholder’s needs and expectations from a project." Where, Grham (1985) identified project management as "a set of people and other resources temporarily assembled to reach a specified objective, normally with a fixed budget and with a fixed time period. Projects are generally associated with products or procedures that are being done for the time or with known procedures that are being altered." These two definitions clearly show the difference of identifying the project management in time to time. Success or failure of the project can influence by project manager. He integrates and co-ordinates and guides them to successfully complete the project. Below are some desirable project manager attributes (Burke 2008). * Ability to select and develop an operational team from...
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...memorandum regarding your issue with the Confined Aquatic Recovery Vehicle project. I have considered three options and their ability to save your company as much money as possible while completing this project in a timely manner. The three alternatives I considered were to immediately invest in hardware, to stay on your current path with the software developments only or to wait and reevaluate your situation in five months. Each of these scenarios has their benefits and risks and I would like to explain each of these in more detail. The intangible costs of your company’s reputation have also been considered and evaluated given that this is a concern of yours and a damaged reputation can dramatically effect your success. Analysis and Results: I have used a descriptive decision tree to analyze your situation. Using a decision tree to evaluate and depict your issue allowed me to weigh the different possible outcomes with their associated consequences and probabilities. There are three separate attachments I will be referring to throughout the discussion of my results. I used the probabilities given in your memorandum with the various costs associated with each option and calculated the expected monetary value (EMV) for each alternative. The expected monetary value is the estimated probabilistic value for each option. An EMV allows you to gage the expected costs and/or profits you will be facing regarding each option. Given that we are trying to reduce your costs as much as...
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...changes, Mr. Navallez and his team has begun analyzing these changes that are affecting his business. Mr. Navallez does have a few ideas on how to move forward but will have to research more on the correct capital budgeting that is best for his organization. Capital budgeting is defined as the process of choosing the organizations long term capital investment strategy, this often consist of things like land, property and equipment (Emery, Finnerty, & Stowe, 2007). Alternatives With the changes the Mr. Navallez and his team are tasked to deal with there are some alternatives that they must decide on to adjust to the new market. They must first decide if they are going to maintain their same type of operation without changing to the industry, become an agent for the new company, or cross their organization over to becoming high tech like the new competition. Capital budgeting will be applied to the options discussed to choose the best one. Through capital budgeting the risk associated with each alternative will also be...
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...exposure to the carcinogen and the development of the cancer. Asbestos has long been considered a miracle material and has had many uses dating back to ancient Greece where it was first used as a building material and as a component of fabric. Now asbestos has been identified as a known human carcinogen and despite known risks associated with it asbestos is still being used today. Even today its uses may be limited but still many are exposed to this dangerous cancerous substance daily at their jobs. The fact is that this material has the potential to cause cancer through direct and indirect exposure, and I feel that a safer substitute should have been discovered already. Mesothelioma, the cancer that is caused by asbestos is so fatal that even survivors of it rarely live longer than 3 years after surviving the initial treatment. From my analysis of the risks associated with occupational asbestos exposure and the impact of the cancer it has been associated with I strongly believe that we should be more concerned with using the dangerous material. First I want to address the nature of the disease and its effect on the human body. This form of cancer is directly associated with exposure to asbestos. The most common place to be exposed to asbestos is industrial construction sites. Many commercial construction adhesives and fireproofing materials contain asbestos and the act of cutting or grinding them can release dangerous crystalline particles of asbestos into the air. Once inhaled the...
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...other checkable deposits. * M2 (adds to M1 other assets that are not so liquid) = M1 + small denomination time deposits + savings deposits and money market deposit accounts + money market mutual fund shares. Chapter 4- Interest Rates Four types of credit market instruments * Simple Loan-pv= fv/(1+i)1 * Fixed Payment Loan-same cash flow every period throughout the life of the loan * Coupon Bond-add the fv at the end * Discount Bond- ytm>coupon ROR vs Interest Rate * The return equals the yield to maturity only if the holding period equals the time to maturity * A rise in interest rates is associated with a fall in bond prices, resulting in a capital loss if time to maturity is longer than the holding period * The more distant a bond’s maturity, the greater the size of the percentage price change associated with an interest-rate change * The more distant a bond’s maturity, the lower the rate of return the occurs as a result of an increase in the interest rate * Even if a bond has a substantial initial interest rate, its return can be negative if interest rates rise...
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...Key Terms Analytical Hierarchy Process (AHP): developed by Dr. Thomas Saaty to address many of the technical and managerial problems frequently associated with decision making through scoring models. An increasingly popular method for effective project selection, the AHP is a four-step process. Checklist: a list of criteria that pertain to our choice of projects, and then applying them to different possible projects. Discounted cash flow (DCF) method: to estimate cash outlays and expected cash inflows resulting from investment in a project. Discounted payback method: the time period in which we are interested is the length of time until the sum of the discounted cash flows is equal to the initial investment. Efficient frontier: set of project portfolio options that offers either a maximum return for every given level of risk or the minimum risk for every level of return. Internal rate of return (IRR): an alternative method for evaluating the expected outlays and income associated with a new project investment opportunity. Lead time: effective methods for aligning profit objectives and strategic plans is the development of a proactive project portfolio, or an integrated family of projects, usually with a common strategic goal. Net present value (NPV) method: projects the change in the firm’s value if a project is undertaken. Nonnumeric models: do not employ numbers as decision inputs, relying instead on other data. Numeric models: seek to use numbers...
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...as needed. Management is unsatisfied with the historical returns on IIC’s investment portfolio and therefore is looking to diversify by investing a portion of the portfolio in alternative investments, which seem to promise higher returns. (Alternative investments represent investment vehicles that are not listed on national exchanges or over-the-counter markets, or for which quoted market prices are not available; e.g., hedge funds, real estate funds, and private equity funds.) While management has been monitoring developments in the investment industry and is concerned with the additional risk, it believes the risk can be managed and, therefore, has decided to move forward with the plan. The investment amount is considered material to IIC’s financial statements. Management anticipates that it will use at least two different fund managers to manage IIC’s alternative investments. Management is currently considering several potential fund managers. In addition, management intends to use its current third-party record keeper’s expertise to perform certain investment valuations. Before finalizing and implementing the plan, management will need approval from the Board of Directors (the Board). The Board has requested that management prepare documentation that will facilitate its understanding of the risks involved and, equally important, what controls management intends to implement, both...
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...Traditional and Nontraditional Litigation Systems Candace Gilliom Business Law/LAW 531 December 3, 2012 Professor Tom Reardon The method of conveying, sustaining, and defending a lawsuit in a court of law is litigation or judicial dispute resolution (Cheeseman, 2010). Litigation something that can be lengthy and time consuming. Alternative Dispute Resolution or ADR is something that was thought of to reduce the need for lawyers and also as a way to solve problems before a trial. ADR offers a less expensive way to resolve contract and commercial disputes while minimizing the business risks associated with traditional litigation. The litigation process is time consuming because of the different phases of the process. The first phase is the pretrial litigation process that involves pleadings, discovery, dismissals and pretrial judgments, and settlement conferences (Cheeseman, 2010). Trials usually consist of selecting a jury, the lawyers making their cases, closing the case and waiting for the jury to make a decision. This process can take months to years making it time consuming and expensive. Alternative Dispute Resolution (ADR) offers a quicker and less expensive method of resolution for the organization. ADR lets a third party negotiate and come up with a resolution prior to a trial or in place of a trial. ADRs most common form is arbitration (Cheeseman, 2010). Parties chose a neutral third party to decide the dispute. Parties are often bound in advance to agree...
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...Business Law/LAW 531 May 25, 2012 The method of conveying, sustaining, and defending a lawsuit in a court of law is litigation or judicial dispute resolution (Cheeseman, 2010). Litigation is a time consuming and costly process. Alternative Dispute Resolution (ADR) is a response to the expenses of lawsuits and a popular means for resolve of cases prior to trial. ADR offers a less expensive way to resolve contract and commercial disputes while minimizing the business risks associated with traditional litigation. The litigation process is time consuming because of the different phases of the process. The first phase is the pretrial litigation process that involves pleadings, discovery, dismissals and pretrial judgments, and settlement conferences (Cheeseman, 2010). The trial phase involves jury selection, opening statements, the Plaintiff’s case, the Defendant’s case, rebuttal, closing arguments, jury instructions, jury deliberation, and entry of judgment. The appeal phase can begin once the court enters a final judgment. A trial is a more formal and a more slow process, more costly for parties involved, and judgments are enforceable by the court system. Litigation can be very time consuming and expensive for the defendant and plaintiff. Alternative Dispute Resolution (ADR) offers a less formal and intimidating environment for the parties involved, a quicker method, and less expensive resolution for the organization. ADR involves an impartial third party to facilitate negotiations...
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...Firm's Risk and Debt Capacity Introduction One notion of the riskiness of a firm is the extent to which the firm’s earnings can fluctuate from period to period in response to changes in total firm revenues. The variability of earnings relative to revenues is determined by two categories of risk. The first source of risk is business risk and is related to the basic industry and operating decisions of the firm. Business risk depends on a number of factors including the variability of demand for the firm’s products, the stability of sales prices and basic product input prices, and the extent to which the firm’s costs are fixed. Each of these factors is determined to some extent by the character of the firm's industry, but each of them is also controllable to some degree through the firm's strategic operating decisions. The second source of risk is financial risk. This risk is related to the firm’s financial policies, specifically the use of debt in financing operations. The use of debt obligates a firm to make interest and principal payments, regardless of profit levels. These fixed financial expenses compound fluctuations in operating income (EBIT) and introduce additional risk to stockholders. Separating business and financial risk convenient illustrates the division between firm operating and financial policies. Both are important and poor management in one area can easily undo good management in the other. Operating Leverage Business risk depends...
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...Introduction This is a case of outsourcing where contribution analysis is carried out. Outsourcing is the ordering of goods or labour from the outside the vendors manufacturing plant. In this case the company is intending to outsource the production of 30,000 Alpha Phones from Original Equipment Manufacturers rather then producing in-house. Apart from the quantitative analysis’s qualitative factors will also be considered as necessary (Horngren, Datar and foster, 2003 p. 378). Alternative solution From the given information about Clear Hear, the following alterative solutions to meet the end state goals resulted; 1. To make 70,000 and switch production of 30,000 units from Beta model to Alpha. 2. To make 70,000 and purchase 30,000 units from Original equipment manufacturers 3. Outsourcing all the 100,000 units. Analyzing and evaluating the above alternative i) To make 70,000 and switch production of 30,000 units from Beta model to Alpha: - In this case the manager will use the excess capacity (idle capacity) of 70,000 and switch production of Alpha. To produce the product, only the variable overheads will change but the fixed overheads will remain the same. This is because the expected variable costs will vary with the number of unities produced and the idle capacity available for use will make the fixed costs not to change (Goldratt and Cox 2004, P. 60-61). Therefore the manager can only choose to produce the product if the cost of producing is less than buying...
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...Mitigating Risk in Transportation Costs Troy Beck MGT325: Introduction to Transportation Management Instructor: Stephen Griffith August 25 2013 Mitigating Risk Mitigating costs is important to the success of every company this is especially true in the transportation industry. Economic, accounting , and social costs all need to be evaluated to ensure that a business can remain successful. This paper will explore these three cost concepts and provide recommendations on how to mitigate the risks associated with each. Accounting costs is the first concept. This includes all of the cash outlays of the company. This is the easiest concept to understand. The accounting costs include all of the expenses incurred by the company. This includes fuel, driver wages, wear and tear on the equipment and other costs associated with delivering the freight. When hauling truck load freight this is very straight forward but in the case of LTL freight or package delivery this becomes more difficult. Mitigating these costs can be difficult, but it can pay big dividends for the company. If a company is able to quantify all of its operations they would be able to evaluate which service is the most costly and focus on reducing this costs. Economic cost is the second cost, this is different from the accounting cost. Economic costs are associated with the alternative cost doctrine. Using this doctrine the cost of a resource is its value in its best alternative use. With this being said if...
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