Managerial Decision Making

, Chapterh1hIntroductionhtohManagerialhDecisionhMaking


Multiplehchoice


1) Anhoptimalhsearchhforhalternativeshshouldhlast:
a. Ashlonghashneededhtohfindhthehbesthsolution.
b. Ashlonghashneededhtohfindhthehfirsthgoodhenoughhsolution.
c. Ashlonghashthehcosthofhthehsearchhdoeshnothoutweighhthehvaluehofhthehaddedhinformation.
d. Ashlonghashthehcosthofhthehsearchhishwithinhthehappropriatehlimitshsethbyhthehdecisionh

maker.hAns:hc

Response:hp.h2-3



2) Ratinghalternativeshonheachhofhthehdecisionhcriteriahishconsideredhthehmosthdifficulthstageh
ofhthehdecision-makinghprocess,hbecause:
a. Ithassumeshwehhavehpreciselyhdefinedhourhpriorities.
b. Ithrequireshushtohforecasthhowheachhalternativehsolutionhwillhachieveheachhofhourhde
cisionhcriteria.
c. Ithrequireshushtohcomparehallhofhthehalternativeshsimultaneously.
d. Ithishlikelyhtohfailhifhourhproblemhishnothdefinedhcorrectly,handhthishfailurehwillhnothbehde

tected.hAns:hb

Response:hp.h3



3) Inhthehinterplayhbetweenhsystemh1handhsystemh2hthinking,hthehkeyhgoalhforhmanagershis:
a. Tohimprovehtheirhusehofhsystemh1hthinking.
b. Tohattempthtohusehsystemh2hthinkinghashmuchhashpossible.
c. Tohapplyhbothhsystemshinhmakinghdecisionshinhorderhtohperformhahmorehthoroug
hhandhcomplexhsearchhforhalternatives.
d. Tohidentifyhwhenhtheyhshouldhmovehfromhsystemh1htohsystemh2hthinking.h

Ans:hdhResponse:hp.h4

, 4) Whichhofhthehfollowinghishahtypicalhcharacteristichofhheuristics?
a. Theyhprovidehushwithhahsimplehwayhofhdealinghwithhcomplexhproblems.
b. Theyhhavehthehbesthlikelihoodhofhreachinghanhoptimalhsolutionhtohahproblem.
c. Theyharehtimehandhresourcehconsuming.
d. Theyharehusedhmainlyhbyhirrationalhdecisionhmakers.

Ans:hahRespo

nse:hp.h6



Questionsh5-
8hdescribehexampleshofhheuristicshoutlinedhinhthehchapter.hForheachhquestion,hindicatehwhichhheurist
ichithdescribes:

a. Thehrepresentativenesshheuristic.
b. Thehavailabilityhheuristic.
c. Thehconfirmationhheuristic.
d. Thehaffecthheuristic.



5) InnerhcityhcrimehinhthehU.S.hgetshconsiderablehmediahcoverage,hsuchhthatheveryhhomicidehish
reportedhinhthehnews.hInhcontrast,hahstoryhofhahpersonhwhohdiedhfromhahhearthattackhrarely
hmakeshthehnews.hThishleadshpeoplehtohoverestimatehthehfrequencyhofhdeathshduehtohhomici
deshrelativehtohthosehduehtohhearthfailure.

Ans:h bhRespons

e:hp.h7-8



6) Johnhishoverhsevenhfeethtall.hWhenhaskedhwhetherhJohnhishahprofessionalhbasketballhplay
erhorhahsoftwarehprogrammer,hmanyhpeoplehpredicththehformer,hevenhthoughhtherehareh
manyhmorehsoftwarehprogrammers,hevenhveryhtallhones,hthanhprofessionalhbasketballhpla
yers. Ans:ha

Response:hp.h8-9

, 7) Afterhreadinghabouththehpositiveheffecthchocolatehhashonhstudenthperformance,hahteacherhgi
vesheachhstudenthinhahclasshahchocolatehbarhbeforehtakinghanhexam.h15houthofh22hstudentshi
nhthathclasshgethanhAhonhthehexam.hThehteacherhthereforehconcludeshthathchocolatehenhance
shperformance.hAns:hc

Response:hp.h9-10



8) Ahcommonhwisdomhinhpoliticshishthaththehmorehanhargumenthishrepeated,hthehmorehith
willhbehconsideredhbyhthehpublichashreliablehandhtrue.

Ans:h bhRespons

e:hp.h7-8



9) Thehaffecthheuristichcanhexplainhwhy
a. PeoplehwhohlivehinhCaliforniaharehassumedhtohbehhappierhthanhpeoplehwhohliveh
inhthehMidwest.
b. Studentshpredicththeyhwillhbehsadderhafterhgettinghahbadhgradehonhahtesththa
nhtheyhactuallyharehinhthesehsituations.
c. Peoplehdohnothrememberhsadheventshfromhtheirhearlyhchildhood.
d. Stockhpriceshgohuphonhsunnyhdays.

Ans:hdhRespon

se:hp.h10




True/False


10) Succumbinghtohheuristicshishinevitable,handhtherehishnohwayhtohmakehjudgmenthlesshproneh
them.hRather,honehcanhonlyhbehawarehofhthehbiasingheffecthheuristicshhavehonhone’shjudgm
ent.

Ans:hFalsehRes

ponse:hp.h11