IMANET IMANET Certifications IMANET-CMA Questions & Answers

• Question 731:

  Managers must make decisions in many different situations. A manager must make a subjective decision when the environment is one in which

  A. Uncertainty exists.

  B. Risk exists.

  C. Certainty may be achieved.

  D. Probabilities can be calculated.

  Correct Answer: A

  Uncertainly exists when the results of possible outcomes cannot even be estimated using the tools of statistical probability'. This environment is the most difficult for decision making because objective mathematical analyses cannot be made. Hence, creativity' is required in the decision-making process, and reliance on the educated guess rather than the probabilistically calculated estimate is necessary.

• Question 732:

  A company is deciding whether to purchase an automated machine to manufacture one of its products. Cash flows from this decision depend on several factors, interactions among those factors, and the probabilities associated with different levels of those factors. The method that the company should use to evaluate the distribution of net cash flows from this decision and changes in net cash flows resulting from changes in levels of various factors is

  A. Simulation and sensitivity analysis.

  B. Linear programming.

  C. Correlation analysis.

  D. Differential analysis.

  Correct Answer: A

  Simulation is a technique used to describe the behavior of real-world system overtime. This technique usually employs a computer program to perform the simulation computations. Sensitivity analysis examines how outcomes change as the model parameters change.

• Question 733:

  A company is concerned that spare parts inventories are too large. It has attempted to keep critical parts for its fleet in stock so that equipment will have minimal downtime. Management wants to know what the optimal spare parts inventory should be if downtime is estimated to cost $150 per day. Carrying cost and order cost have not been measured. You have been asked to make a formal recommendation on spare parts stocking levels. Which of the following techniques is most appropriate to use?

  A. Operations research.

  B. Value analysis.

  C. Attribute listing.

  D. Brainstorming.

  Correct Answer: A

  Operations research attempts to find optimal solutions using classical concepts such as statistics, simulation, logical thinking, and other scientific and mathematical techniques to develop and test hypotheses. This application closely fits the problem and charge given.

• Question 734:

  A company wishes to determine what advertising mix of radio, television, and newspapers offers the optimal desired result in increased sales and improved public image. Which of the following techniques is most appropriate to use?

  A. Synaptic.

  B. Value analysis.

  C. Brainstorming.

  D. Forced relationship.

  Correct Answer: B

  Value analysis is a methodical approach primarily designed to optimize performance of an activity at a minimum cost. Emphasis is on the cost-benefit criterion.

• Question 735:

  A company is about to introduce a new service and wishes to develop a new slogan and logo to be used in advertising and on company publications. You have been chosen to participate in this process and to look at past slogans, logos, and suggestions given by the advertising agency. You are not limited to the suggested ideas and have been encouraged to suggest original ideas of your own. Which of the following techniques is most appropriate to use?

  A. Brainstorming.

  B. Value analysis.

  C. Free association.

  D. Attribute listing.

  Correct Answer: C

  Free association is an approach to idea generation that reports the first thought to come to mind in response to a given stimulus, for example, a symbol or analogy pertaining to a product for which an advertising slogan is sought. The objective is to express the content of consciousness without censorship or control.

• Question 736:

  A company has a computer that it no longer needs because of a discontinued operation. Currently, there are several computer projects that may be able to use the machine but some modification will be necessary if such new application is to be successful. Which of the following techniques is most appropriate to use?

  A. Attribute listing.

  B. Operations research.

  C. Morphological matrix analysis.

  D. Synaptic.

  Correct Answer: A

  Attribute listing is applied primarily to improve a tangible object. It lists the parts and essential features of the object and systematically anoles modifications intended as improvements.

• Question 737:

  A chief executive officer (CEO) believes that a major competitor may be planning a new campaign. The CEO sends a questionnaire to key personnel asking for original thinking concerning what the new campaign may be. The CEO selects the best possibilities then sends another questionnaire asking for the most likely option. The process employed by the CEO is called the

  A. Least squares technique.

  B. Delphi technique.

  C. Maximum likelihood technique.

  D. Optimizing of expected payoffs.

  Correct Answer: B

  The Delphi Technique is a forecasting or decision making approach that attempts to avoid groupthink (the tendency of individuals to conform to what they perceive to be the consensus). The technique allows only written, anonymous communication among group members. Each member takes a position on the problem at hand. A summary of these positions is communicated to each member. The process is repeated for several iterations as the 1members move toward a consensus. Thus, the Delphi technique is a qualitative, not quantitative, technique.

• Question 738:

  A highly risk-averse decision maker will often react to bounded rationality by

  A. Satisfying.

  B. Ignoring the limiting factor.

  C. Attempting to find the optimum solution.

  D. Increasing the number of solutions considered.

  Correct Answer: A

  Rational decision making is almost always subject to limitations that make the certain determination of the optimal decision impossible. Avery risk-averse decision maker may reactor such uncertainly by satisfying, that is, choosing an adequate course of action that is perceived to be safe. Satisfying thus leads to decisions that are not only less than optimal but also less than the best available.

• Question 739:

  which of the following is not an assumption that is made when assuming rationality on the part of the company?

  A. The company chooses the decision that results in the maximum economic payoff.

  B. The criteria and alternatives can be ranked according to their importance.

  C. Specific decision criteria are constant and the weights assigned to them are stable over time.

  D. The company seeks solutions that minimize conflict.

  Correct Answer: D

  According to Robbins, Organizational Behavior (6th ed. Prentice-Hall, 1993), rationally has the same assumptions as the optimizing (outcome maximizing) model for decision making. Rational decision making is fully objective and logical. The model assumes that a single, well-defined goal is to be maximized; that all relevant criteria and feasible options are known; that the criteria and options can be assigned numerical values and ranked; that preferences are constant (criteria and their assigned weights do not change); and that the decision maker will choose the option with the highest rank (the maximum benefits). However, rationality does not require an assumption about the vacancy of conflict.

• Question 740:

  A company has recently introduced total quality management (TQM). The company's top management wants to determine a new and innovative approach to foster total participation throughout the company. Management should

  A. Seek isolation from all distractions in order to think the problem through.

  B. Bring the employees together for a brainstorming session.

  C. Rely on them selves to develop a new approach.

  D. Use a disciplined problem-solving approach.

  Correct Answer: B

  Group decisions tend to be more creative than individual decisions. One creative approach is brainstorming, which breaks down broadly based problems into their essentials. It is an unstructured approach that relies on the spontaneous contribution of ideas from all members of a group.