Decision Making Questions and Answers

Answer: A

Correct answer: delphi technique

The Delphi technique gathers judgements in writing and in rounds, with a summary of the group’s responses fed back before each new round. Because the participants never meet, no one dominates and no one is swayed by status, which is what makes it useful for forecasting and for genuinely contested questions.

Answer: A

Correct answer: past costs

A cost already incurred is the same whatever is now decided, so it cannot distinguish between the alternatives and is irrelevant to the choice. Only costs that differ between the alternatives - future and differential - are relevant, and opportunity costs are relevant for precisely that reason: they differ according to what is chosen.

Answer: B

Correct answer: making decisions

Having predicted the outcomes of the alternatives in the third step, the fourth chooses among them. Implementation and evaluation follow as the fifth, which is where the feedback for the next cycle comes from.

Answer: C

Correct answer: making predictions

The five steps run: identify the problem and the uncertainties; obtain information; make predictions about the future; choose among alternatives; and implement, evaluate and learn. Prediction is the third because it depends on the information gathered in the second and must precede the choice made in the fourth.

Answer: C

Correct answer: Bounded rationality

Bounded rationality is Simon’s term for the gap between the rational ideal and human capability. The decision maker cannot gather all the information, cannot hold it all in mind, and cannot evaluate every alternative - so rationality operates within bounds set by the person and the situation rather than absolutely.

Answer: A

Correct answer: programmed

The defining features are in the stem: the problem recurs, and the response has already been worked out and is known to whoever must decide. Nothing is left to judgement, so the decision can be delegated, embedded in a procedure, or automated entirely.

Answer: D

Correct answer: Heuristics

A heuristic is a rule of thumb that shortens a judgement by substituting an easy question for a hard one. It usually works, which is why it persists, and its failures are systematic rather than random - which is what makes availability, representativeness and anchoring predictable biases rather than mere carelessness.

Answer: D

Correct answer: Routine and non-complex

A programmed decision is one that recurs often enough for a standard response to have been worked out, so it can be settled by rule or procedure rather than by fresh analysis. Complexity, risk and uncertainty are the marks of the non-programmed decision, which has no precedent to fall back on.

Answer: B

Correct answer: process improvement team.

A process improvement team draws its members from several functions and levels precisely because a process crosses departmental boundaries, and the people who work at each stage are the ones who can see where it fails. That cross-cutting membership is what distinguishes it from a team within a single unit.

Answer: A

Correct answer: Incomplete information

The rational model assumes the decision maker has complete information, together with an agreed goal, a well-structured problem and a predictable environment. Incomplete information is precisely the condition the model does not allow for, and recognising that real decisions are made under it is what led to the administrative model.