Chapter 2: Decision-Making

1. Can an engineer manager avoid making a management decision? Why or

why not?

Yes, they can avoid making a management decision. Because doing so is

also a decision made up by that engineer manager, but these types of
managers are dangerous and should be removed from their position as soon
as possible.

2. When a problem becomes apparent and the engineer manager chooses to

ignore it, is he making a decision? Explain your answer.
Yes, as manager he or she is making a decision and is responsible for
the outcome. The engineer manager made a decision to ignore the problem
as he evaluated that the problem is very hard to solve.

3. Why is proper diagnosis of the problem important?

Because if the manager wants to make an intelligent decision, his first
move must be the diagnosis of the problem and if the manager fails in this
aspect, it is almost impossible to succeed in the next steps in decision-
making.

4. What are the components of the environment from the point of view of the
decision maker? What do they consist of?
Internal and external environment. Internal environment consists of
Organizational, Marketing, Personnel, Production, and Financial Aspects,
while external aspect consists of the government, engineers, labor unions,
suppliers, banks, public, competitors and clients.

5. How may one develop viable alternatives in problem solving?

 First, by preparing a list of alternative solution. Then determine the viability
of each solution. Lastly, revise the list by striking out those which are not
viable.

6. How may alternative solutions be evaluated?

Evaluation of alternative solutions will depend on the nature of the problem,
objectives of the firm, and the nature of solutions presented. Each
alternative solution must be analyzed and evaluated in terms of its value,
cost, and risk characteristics

7. Why is it important for those who will be involved in implementation to

understand and accept the solution to problem?
Because it is important for the manager to ensure results and provide
information for future decision-making and on order to do this, it should be
assured that the solution selected for implementation are in keeping with
the goals and objective originally specified.

8. What are the approaches in solving problems?

Qualitative evaluation and Quantitative evaluation. The former refers
to evaluation using intuition and subjective judgement, while the latter refers
to evaluation using rational and analytical techniques.
9. What quantitative techniques are useful in decision-making?
1. Inventory models 2. Queuing theory 3. Network models
4. forecasting 5. Regression analysis 6. Simulation
7. Linear programming 8. Sampling theory 9. Statistical decision
theory
10. What is the purpose of Bayesian analysis?
The purpose of Bayesian analysis is to revise and update the initial
assessments of the event probabilities generated by alternative solutions.
 Chapter 2: Decision-Making
1. Why is planning an important activity for engineer managers?
Because managers who plans are afforded with the opportunity to
carefully analyze situations which leads to effective decision-making.
2. How may “planning” be defined?
Planning is process concerned with defining goals for a company's
future direction and determining the missions and resources to achieve
those targets.

3. What planning activities are undertaken at various management levels?

Strategic planning, Intermediate planning, and operational plan
4. What are the steps in the planning process?
(1) setting organizational, divisional, or unit goals
(2) developing strategies or tactics to reach those goals
(3) determining resources needed
(4) setting standards

5. What are the types of plans? How may they be classified?

1) Marketing plan, 2) Production plan 3) Financial plan 4) human resource
management plan 5) Short-range plans 6) Long-range plan 7) standing
plans 8) single use plans.
They may be classified in terms of functional areas (1-4), time horizon (5-6),
and frequency of use (7-8)
6. What is production plan? What are its components?
Production plan is a written document that states the quantity of
output a company must produce in broad terms and by product family.
 Production plan consists of: 1) The amount capacity the company must
have, 2) how many employees are required, and 3) how much material must
be purchased.
7. What is budget?
A budget is a plan which sets forth the project expenditure for a
certain activity and explains where the required funds will come from.
8. What is meant by “company mission”?
Company mission refers to the strategic management that identifies why an
organization exists, its philosophy of management, and its purpose as
distinguished from other similar organizations in terms of products, services,
and markets
9. What are the barriers to planning?
1. Manager’s inability to plan
2. Improper planning process
3. Lack of commitment to the planning process
4. Improper information
5. Focusing on the present at the expense of the future
6. Too much reliance on the planning department
7. Concentrating on only the controllable variables

10. What may be used as aids in planning?

1. Gather as much information as possible
2. Develop multiple sources of information
3. Involve other in the planning process