Research: Decision Theory and Pilot Testing
Chapter 4
Terms in Review
1. Some questions are answerable by research and others are not. Using some management problems of your choosing, distinguish between them.
When management wants to find out which method of a production process is the most efficient in terms of operational productivity we can use research to provide usable results. When management wants to know if now is a good time to take on debt for equipment upgrades is, research may not be able to provide usable results. Due to the extensive number of variables affecting financing decisions research will likely not be able to assist in this decision. The current market conditions, economy, interest rates, industry competition, and many other items require a type of analysis that research can not provide.
2. Discuss the problems of trading off exploration and pilot testing under tight budgetary constraints. What are the immediate and long-term effects?
The text discussed that often pilot testing is not done to both reduce costs and also to reduce the total research time. Not conducting pilot testing can then immediately progress the research process or reduce the total cost of the research but it can possibly have negative long-term effects. By not conducting pilot testing your research results may suffer because the proper information is not being gathered. A pilot test often provides indication of problems with the data gathering process. There may also be an overall increased cost with no additional benefit when no pilot testing has been completed. The pilot test can not only indicate incorrect information be gathered but can also provide some indication as to whether the proper research questions have been asked. When the research questions being asked do not answer the true management questions then the conducted research will be useless. Useless research is a wasted expense. Pilot testing can indicate whether more in-depth research is required thus providing a possible cost
Terms in Review
1. Some questions are answerable by research and others are not. Using some management problems of your choosing, distinguish between them.
When management wants to find out which method of a production process is the most efficient in terms of operational productivity we can use research to provide usable results. When management wants to know if now is a good time to take on debt for equipment upgrades is, research may not be able to provide usable results. Due to the extensive number of variables affecting financing decisions research will likely not be able to assist in this decision. The current market conditions, economy, interest rates, industry competition, and many other items require a type of analysis that research can not provide.
2. Discuss the problems of trading off exploration and pilot testing under tight budgetary constraints. What are the immediate and long-term effects?
The text discussed that often pilot testing is not done to both reduce costs and also to reduce the total research time. Not conducting pilot testing can then immediately progress the research process or reduce the total cost of the research but it can possibly have negative long-term effects. By not conducting pilot testing your research results may suffer because the proper information is not being gathered. A pilot test often provides indication of problems with the data gathering process. There may also be an overall increased cost with no additional benefit when no pilot testing has been completed. The pilot test can not only indicate incorrect information be gathered but can also provide some indication as to whether the proper research questions have been asked. When the research questions being asked do not answer the true management questions then the conducted research will be useless. Useless research is a wasted expense. Pilot testing can indicate whether more in-depth research is required thus providing a possible cost