OMIS 430 - TEST 1 SLU - WAIKAR

decision theory and its tools is appropriate only if business problem.situation is characterized by:

- a set of future conditions called states of nature - a set of alternatives - resulting payoffs associated with a given choice under a given state of nature are estimable - probabilities of occurrence of the states of nature are estimable

what are the 3 types of business environments that POM decisions are made in?

- certainty - risk - uncertainty

steps of EMV

- construct the payoff table - compute EMV for each alternative - choose the alternative associated with highest EMV

what are the 2 steps for making decisions under risk?

- identify - the alternatives - states of nature - probabilities - payoffs -apply EMV criteria OR use the decision tree approach to decide the best choice or alternative

the standard decision-making process involves:

- identifying the problem - specifying criteria for choosing a solution - developing alternatives - analyzing and comparing the alternatives - selecting the best alternatives - implementing it and monitoring the results

what are the 3 main basic functions in most organizations?

- operations - finance - marketing

managers must make decisions related to ...

- system design - system operation

what are the 3 main characteristics of production systems?

- type of setup - variety - volume

operations decisions may be characterized by?

- use of models - use of quantitative approaches - use of trade-offs - use of system approach - need for establishing priorities - ethics

relatively few (20%) items, variables, factors generally account for the lion's share (80%) of the problems

80-20 rule

what is the MAXIMUM amount a manager should be willing to pay to obtain perfect information?

EVPI

T/F decision tree approach can be used to choose the best alternative under the conditions of risk

TRUE

T/F interaction of operations function with other functions, not individually?

TRUE

T/F operations managers have an obligation to make "ethical decisions"

TRUE

T/F operations managers must pay attention to the impact of their decisions on their workers, their customers, other people and the environment

TRUE

T/F perfect information is desirable but costs money

TRUE

T/F perfect information moves you from risk to certainty

TRUE

T/F the information presented in a decision tree is not different from information in payoff table

TRUE

T/F the more variety, the greater the variation in production/service requirement

TRUE

creating and imposing bounds on decision making due to limited resources and rationalizing them

bounded rationality

decision tree approach involves construction of a decision tree for your ...

business situation

everything is known

certainty

(in a decision tree) used to indicate states of nature or chance events

circular nodes

what is also dictated by volume of production and may range from a project type operation (very low volume) to job shop (batch processing), to repetitive production (assembly line) to continuous processing which involves producing high volumes of highly uniform products with high degree of automation

classification

- linear programming - queuing theory - inventory models - project management tools - forecasting techniques - simulation - decision theory tools

common quantitative techniques

a graphical representation of all the alternatives available, all states of nature, their probabilities and estimated payoffs

decision tree

what approach will only work in sequential decision making

decision tree approach

breaking up production process into small tasks so that each worker performs a small portion of the overall job, better and more efficiently mass production concepts

division of labor

solving more important problems first since many resources are scare

establishing priorities

what is the highest EMV in the table also called?

expected payoff under risk

what are important aspects of conversion for assuring effectiveness and efficiency?

feedback and control

- providing funds for operations/marketing

finance

- who will work on what?

forecasting, scheduling

act in a way you would expect others to act towards you

golden rule

output may range from ...

highly standardized with high degree of uniformity to customized output

- operators - supervisors - clerks - etc.

human labor

- time standards - process charts

information

product parts need not be custom fitted, making replacement easy and cutting cost

interchangeable parts

- do we have enough today?

inventory management

act in such a way that the action taken under the circumstances could be a universal law or rule of behavior

kant's categorical imperative principle

choose the alternative with the best average payoff

laplace rule

how does operation manager fulfill their ultimate responsibility?

make decision in a variety of areas

- motivation - training - performance

management of personnel

what are types of setup?

manufacturing and service

- promoting and/or selling goods and services

marketing

choose the alternative with the best of the best possible payoffs

maximax rule

choose the alternative with the best of the worst possible payoff

maximin rule

choose the alternative that minimizes you maximum regret

minimax regret rule

abstraction of reality

model

what can be inexpensive and easy to use?

models

what permits experimentation but can have limitations

models

decision tree consists of ...

nodes and branches

- creation of goods/services - part of the supply chain

operations

part of the organization that produces goods or services using a set of activities

operations

what can be described as a process of transformation of inputs into outputs ?

operations

managing these activities in the system that create goods or provide services

operations management (OM/POM)

only take actions that would be viewed as proper by a disinterest panel of professional peers

professional ethics

- project on time? - any adjustments?

project management

allows POM managers to obtain solution to business problems mathematically

quantitative approaches

what is the ultimate responsibility of the operations manager?

real responsibility of production/operations manager is to product quality products or services in cost-effective and timely manner

we do not know what will happen but know its likelihood

risk

- plan - organize - direct - control - make decisions - follow thru - improve

role of operations manager

moving assembly line

scientific management

(in a decision tree) used to indicate decision points

square nodes

occurs when different departments attempt to reach a solution that is optimum for their department and not what is optimum for the entire organization

suboptimization

- before production can begin - involves determining system parameters

system design

- production itself - concerned with: - management of personnel - inventory management - forecasting, scheduling - project management - quality control - quality assurance

system operation

embracing the philosophy that "whole is greater than the sum of the component individual parts"

systems approach

- robots - machines

technology

what adds value during operations transformation?

the conversion

implies inability to achieve all goals and thus compromising in various areas for overall best

trade-offs

act in such a way that you would feel comfortable explaining your actions on national tv news show

tv test

- human labor - raw materials, sub-assemblies, capital - technology - information - time

types of input

- goods of different types - services of different types

types of outputs

everything is unknown

uncertainty

what can also contribute to poor decisions and bad outcomes

unwillingness to admit a mistake

act in a way that results in the greatest good for the greatest number

utilitarian principle

- utilitarian principle - professional ethics - golden rule - kant's categorical imperative principle - tv test

ways to assess managerial decisions in the context of ethics