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60. The fourth step in the decision-making model is ______.
a. controlling the decision
b. analyzing alternatives and selecting the most feasible
c. planning and implementing the decision
d. generating creative and innovative ideas
61. Which of the following is NOT one of the four approaches that are commonly used
to analyze alternative solutions?
a. quantitative techniques
b. cost-benefit analysis
c. consensus mapping
d. intuition
62. ______ is selecting an alternative based on your experience and rational judgment.
a. Cost-benefit analysis
b. Pros and cons
c. Queuing theory
d. Intuition
63. Samantha’s boss has asked her to find the quantity of pens they will have to
produce in order to balance out the costs that get put into production. Which method
should she use to determine this number?
Instructor Resource
Lussier, Management Fundamentals 8e
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a. break-even analysis
b. capital budgeting
c. queuing theory
d. probability theory
64. Nils owns a restaurant and is trying to decide whether to fix his old pizza oven or
buy a new one. The repair is not cheap, and a new oven is very expensive. However,
pizza is one of his bestselling products, so a decision must be made. Which method
should he use to make this decision?
a. break-even analysis
b. capital budgeting
c. queuing theory
d. probability theory
65. Which of the following is NOT a capital budgeting approach?
a. time value of money
b. average rate of return
c. payback approach
d. discounted cash flow
66. A(n) ______ is used when comparing alternatives using a combination of subjective
judgment along with some quantitative math.
a. pros and cons
b. big data
c. intuition
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d. cost-benefit analysis
67. ______ is the cognitive process of drawing conclusions using a rational reasoning
process in reaching a decision.
a. Wisdom
b. Judgment
c. Inspiration
d. Assessment
68. Lauren manages a plant that makes gourmet soft drinks. She needs to determine
the best time to shut down the bottling line to be sanitized. As the rest of the facility will
continue to operate during this process, she needs to make sure the impact on the other
parts of the plant is minimal, or her other workers will end up with little to do until the
bottling line is up and running again. Lauren should use ______.
a. linear programming
b. probability theory
c. queuing theory
d. break-even analysis
69. Isak is preparing to open his new store, which will sell fashionable clothing for men.
He needs to determine the best way to allocate the limited shelf space in his small store
between his inventory of pants, shirts, and accessories. Isak should use ______.
a. linear programming
b. probability theory
c. queuing theory
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
d. break-even analysis
70. Companies primarily use linear programming for ______.
a. programmed decision under conditions of high risk or uncertainty
b. programmed decision under conditions of low risk or certainty
c. non-programmed decision under conditions of high risk or uncertainty
d. non-programmed decision under conditions of low risk or certainty
71. In probability theory, the ______ is the payoff or profit from each combination of
alternatives and outcomes.
a. expected value
b. anticipated return
c. projected benefit
d. calculated premium
72. Soledad and her team have been working through the decision-making model in
order to address a recent significant drop in repeat business from the customers of her
advertising firm. After analyzing all of the alternatives they generated, it became clear
that none of them would satisfy the criteria they set for the decision. At this point,
Soledad knows that they have two options, one of which is to ______.
a. return to step 1 and classify the problem again
b. return to step 4 and repeat the analysis of the alternatives they’ve generated
c. return to step 3 and generate more alternatives
d. return to step 2 and change the objective for the decision
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
73. What should you do if you are controlling the decision and the implementation is not
going as planned?
a. Let somebody else take over.
b. Ignore the problem and continue.
c. Let the issue work itself out.
d. Backtrack to prior steps to take corrective action.
74. According to the decision-making model, what happens after planning and
implementing the decision?
a. classify and define the problem or opportunity
b. analyze alternatives and select the most feasible
c. set objectives
d. control the decision
75. ______ should be established to determine whether the chosen alternative is
solving the problem.
a. Markers
b. Boundaries
c. Checkpoints
d. Mileposts
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
76. When we will not admit that we made a bad decision, we are in the process known
as ______.
a. decisional denial
b. escalation of commitment
c. determination by default
d. analysis paralysis
77. ______ describes the feeling where the pain of losing outweighs the joy of winning.
a. Loss aversion
b. Reluctance to succeed
c. Willful ignorance
d. Adverse reasoning
78. Felicia has been involved with a team that is deciding on the way to move forward
with a project regarding budget allotment for her building location. They have
brainstormed on different solutions and have also met with the leadership to determine
a final solution. At this point in the process, they are training the department managers
to comply with the new allotment procedures. At what point in the decision-making
process is Felicia’s team?
a. set objectives and criteria
b. plan and implement decision
c. control the decision
d. defining the problem
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Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
79. Which of the following is not one of the ways in which culture influences problem
solving and decision making?
a. the depth of analysis
b. the frequency of decision making
c. the importance placed on logic and rationality
d. the level of participation in decision making
80. While technology facilitates using big data to solve problems, it carries with it the
issues of ______.
a. security and privacy
b. training and time
c. applicability and utility
d. sensitivity and rigor
True/False
1. Problem solving and decision making are interrelated with each other.
2. Managers need to attempt to solve all problems.
Instructor Resource
Lussier, Management Fundamentals 8e
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3. Consistent decision makers consistently either rush or take too much time.
4. Many organizations are slowing down decisions and taking the time to analyze data
as consistent decision makers.
5. In spite of its inherent advantages, the consistent decision style can still result in
failure.
6. Programmed decisions are those that occur in unique situations.
7. Programmed decisions are those that arise in recurring or routine situations.
Instructor Resource
Lussier, Management Fundamentals 8e
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8. When there is greater uncertainty in a situation, it generally means there is a greater
ability to predict the outcome of that situation.
9. A group rarely solves problems better than individuals.
10. When making a bounded rational decision, the person uses satisficing.
11. Both rational maximizers and bounded rational satisficers follow rational procedure
analysis.
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Lussier, Management Fundamentals 8e
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12. Even when a problem already has set objectives and criteria, you still need to
complete Steps 2–4 of the decision-making model.
13. The second step of the decision-making model is to set objectives and criteria.
14. After setting objectives and criteria, the next step is to analyze alternatives and
select the most feasible one.
15. When weighing criteria, all want criteria get an equal rating, while must criteria can
be weighted by importance.
16. Creativity is a way of thinking that generates new ideas.
Instructor Resource
Lussier, Management Fundamentals 8e
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17. Innovation is the implementation of a new idea.
18. Innovation leads to creativity.
19. There are four stages in the creative process.
20. The Delphi Technique involves using a series of confidential questionnaires to refine
a solution.
21. Big data is the analysis of large amounts of quantified facts to aid in maximizing
decision making.
Instructor Resource
Lussier, Management Fundamentals 8e
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22. Unfortunately, the use of big data is out of reach of small companies due to the lack
of affordable options.
23. Big data is being used in all industries to improve operations and marketing.
24. Data and intuition are commonly used together.
25. Cost-benefit analysis requires that all costs and benefits be expressed numerically,
so that the total costs can be compared mathematically to the total benefits.
26. Instinct is the cognitive process of drawing conclusions using a rational reasoning
process in reaching a decision.
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
27. Ben Franklin is said to have used break-even analysis in order to make decisions.
28. Many successful entrepreneurs suggest listening to your voice of intuition.
29. A major reason that decisions, once reached, are not successfully implemented is
the lack of a detailed plan to achieve the objectives of the decision.
30. After making a decision, you should develop a plan of action with a schedule for
implementation.
31. A poor decision may still lead to new opportunities.
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
32. In countries that are less time conscious, decision styles are more reflexive.
33. In lower-power-distance cultures, there is a greater use of autocratic decision
making.
34. Decisions often take longer to make in countries with cultures that value high levels
of participation in the process.
Essay
1. Explain the relationship among objectives, problem solving, and decision making.
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
2. Explain the relationship among the management functions, decision making, and
problem solving.
3. List and describe the six steps in the decision-making model.
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
AACSB Standard: Analytical thinking | Making sound decisions
4. Describe the differences between programmed and non-programmed decisions and
among the conditions of certainty, uncertainty, and risk.
5. Discuss some advantages and disadvantages of using group decision making.
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
35
6. Explain the importance of distinguishing between symptoms from the cause of the
problem.
7. Describe when to use rational versus bounded rational decision making.
8. State the difference between an objective and a must or want criteria.
9. State the difference between creativity and innovation.
Instructor Resource
Lussier, Management Fundamentals 8e
SAGE Publishing, 2019
10. List and explain the three stages in the creative process.
11. Explain how queuing theory can help a retail store balance costs and revenues.
12. What is the difference between quantitative techniques and cost-benefit analysis?