CMPM QUIZ

• Decision-making is the process of identifying and choosing alternative courses of action in a manner appropriate to the demands of the situation
• Managers, including engineer managers, are tasked with providing leadership in the quest for the organization’s objectives, making decision-making skills crucial for success
• Decision-making becomes bigger and more complicated at higher management levels
• Decision-making involves adapting a procedure to determine the best option available to solve certain problems
• Only executives make decisions by virtue of their position or authority
• Effective managers encourage opinions but insist that those voicing opinions take responsibility for defining factual findings
• The first rule in decision-making is that one does not make a decision unless there is disagreement
• Effective managers focus on important decisions, base decisions on principles, insist on alternatives, and constantly monitor decision results
• Identification of the problem is crucial in decision-making, as a problem exists when there is a difference between an actual and desired situation
• Environmental analysis aims to identify constraints, which can be internal or external limitations
• Problems may be solved by preparing a list of alternative solutions, determining their viability, and evaluating them based on value, cost, and risk characteristics
• Choice-making involves selecting among alternatives representing potential solutions to a problem, with particular effort made to identify all significant consequences of each choice
• Implementation refers to carrying out the decision to achieve objectives, requiring a devised plan and available resources
• Control and feedback mechanisms are used to ensure decision results and provide information for future decisions
• Qualitative evaluation involves intuition and subjective judgment, suitable for simple, familiar problems with immediate decisions needed
• Quantitative evaluation involves rational and analytical techniques, such as inventory models, queuing theory, network models, forecasting, regression analysis, simulation, linear programming, sampling theory, and statistical decision theory
• Inventory models consist of economic order quantity, production order quantity, back-order inventory, and quantity discount models
• Queuing theory determines the number of service units to minimize customer waiting time and service cost
• Network models break complex tasks into smaller segments, including PERT and CPM techniques
• Forecasting involves collecting past and current information to make predictions about the future
• Regression analysis examines the association between variables to predict future events, with simple or multiple regression depending on the number of independent variables
• Simulation constructs a model to represent reality for evaluating alternatives, while linear programming produces an optimum solution within constraints
• Sampling theory statistically determines samples from populations for processes like quality control and marketing research
• Statistical decision theory involves rational conceptualization, analysis, and problem-solving in situations with limited information, including Bayesian analysis to revise event probabilities based on additional information
• Bayesian analysis revises and updates initial assessments of event probabilities generated by alternative solutions using additional information
• When a decision-maker can assign probabilities to events, the Bayes criterion selects the decision alternative with the maximum expected payoff or the minimum expected loss if working with a loss table
• Reasons why managers insist on disagreement before decision making:

  • Safeguard against being misled by false or incomplete information
  • Provide alternatives to a decision
  • Stimulate imagination
• Reasons for poor decisions:

  • Errors in the decision process
  • Bounded rationality
  • Sub-optimism
• Bounded Rationality is a human decision-making process where individuals aim to satisfice rather than optimize, seeking a decision that is good enough rather than the best possible decision
• Sub-Optimization results from different departments attempting to reach an optimum solution for their department, which may not be best for the entire organization
• In the construction industry, pre-planning is crucial for the direction and success of any project
• Basic rule in the planning stage:

  • Include the Construction superintendent at the start of planning
  • Break down the job into components
  • Prepare a construction plan for regular monitoring
  • Utilize new tools that save time, money, or confusion
• Four dimensions of planning functions:

  • Philosophy
  • Integration
  • Process
  • Collection of Procedures
• Planning at various management levels:

  • Top management level: strategic planning
  • Middle management level: intermediate planning
  • Lower management level: operational planning
• Strategic planning determines major goals, policies, and strategies for obtaining and using resources to achieve those goals
• Intermediate planning determines the contributions subunits can make with allocated resources
• Operational planning determines how specific tasks can best be accomplished on time with available resources
• The planning process involves setting goals, developing strategies, determining needed resources, setting standards, and creating functional area plans
• Functional area plans include marketing, production, financial, and human resource management plans
• Plans can be classified based on time horizon as short-range or long-range plans