Discussion #6: Make a Decision
Decision Making Problems – You must read the Decision Making
items in Week Eleven in order to understand the process for solving these
problems.
Decision Making Heuristics
Risk – Prospect Theory
Rational Decision Making – PP
Non-Rational Escalation-PP
Fairness – PP
Offer your solution to these problems and then provide one
example from your work experience where one of these processes was used and
describe how it was used – or, provide an example from your work where one of
these processes should have been used and was not.
This Discussion is an exercise in critical thinking. You
need to solve the problems. You do not need to interact with your classmates in
this discussion but you are certainly welcome to do so if you would like.
The above listed lectures and PPs will really help you
address the questions in this discussion. In order to answer the first question
you need to read Dr. Martin Luther King Jr’s “Letter From a Birmingham Jail”.
The link is in Week 11 and the Webliography.
In the “Letter from a Birmingham Jail” Dr Martin Luther King
Jr. eloquently describes his reasons for supporting the actions of the
individuals fighting for civil rights. Using Bazerman’s Prospect theory,
explain what action King is advocating – that is, is he being risk seeking or
risk averse, and explain why he is doing this? Hint: his reference point is equality.
Make sure that whatever you decide, in order to explain your choice of risk
seeking or risk averse, use the language of Prospect Theory to support your
decision.
Pretend that for the last two years the snowfall in the
Washington DC area has been heavy. Many
years there is barely any snow during the winter, but these last two years have
seen major snow accumulation. Your store
has a fairly set average for snow blower sales.
However for the last two years there has been an extreme amount of
snowfall in your area and the snow blower sales have skyrocketed. You are the purchasing agent for your
store. You now have to put in the order
to the supplier for snow blowers for this coming winter. You do not want to be stuck with a lot of
extra snow blowers at the end of the season.
If this happens you lose money.
But you do want to have enough snow blowers on hand to fill the need.
Based upon the ten year history of snow fall in your area do you order the
number of snow blowers that you have sold for the last two years or not? Explain how the Bazerman heuristic
“Regression to the Mean” would be the best heuristic to use to help you decide
the number of snow blowers to stock. How
many snow blowers would you order and why?
Make sure you fully explain your decision.
Remember to include an example of one of these two decision
making techniques from your work.
When you submit your response please paste it into the Discussion
(do not upload a file) and address each of the three criterion above. If you
should choose to respond to your classmates that is fine but responding to your
classmates is not necessary.
