Final Exam- Decision Making & Problem Solving (Ch. 8) with Complete Solutions decision making - Correct Answer the process of using relevant information to choose from several alternatives; very important task for managers in an organization problem solving - Correct Answer the process of finding the answer to a question, a special type of decision making where the issue is unique; involving searching for alternatives before making a decision elements of decision making - Correct Answer information> goals-action-action outcome probabilities- outcome values- choice of action information conditions - Correct Answer availability of information about the action-outcome probabilities -certainty -risk -uncertainty certainty - Correct Answer the outcomes for each alternative/action are known risk - Correct Answer the decision maker does not known with certainty what the outcome(s) of each action will be but there is enough information to estimate the probabilities of all the outcomes uncertainty - Correct Answer there is no information to estimate the probabilities of outcomes the rational approach - Correct Answer systematic, step-by-step decision making process; based on the belief that people should and do make decisions logically using all necessary information the behavioral approach - Correct Answer acknowledges that decisions are often made with bounded rationality rather than with rationality; characteristics: using rule of thumb, sub optimizing, sacrificing bounded rationality - Correct Answer decision makers cannot deal with information about all the aspects and alternatives pertaining to a problem and therefore choose to takle some meaningful subset of it
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