CA5104: Operations Management and TQM - Decision Theory

A set of flashcards covering key terms and concepts from the lecture on decision theory and operations management.

Decision Theory

A technique for evaluating alternatives for future capacity in a business organization.

Decision

The act of deciding or choosing an action among all alternatives taken into account.

Payoff Table

A table showing the expected payoffs for each alternative in every possible state of nature.

Maximin Criterion

Choose the alternative with the best of the worst possible payoffs.

Maximax Criterion

Choose the alternative with the best possible payoff.

Laplace Criterion

Choose the alternative with the best average payoff.

Minimax Regret

Choose the alternative that has the least of the worst regrets.

Expected Monetary Value (EMV)

Determines the expected payoff of each alternative, based on probabilities.

Decision Tree

A schematic representation of the available alternatives and their possible consequences.

Fixed Automation

The least flexible automation that uses high-cost, specialized equipment for a fixed sequence of operations.

Process Selection

Deciding on the way production of goods or services will be organized.

Cycle Time

The maximum time allowed at each workstation to complete its set of tasks on a unit.

Line Balancing

The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements.

Cellular Layouts

A type of layout where workstations are grouped based on similar processing requirements.

Capacity Planning

The process of determining the production capacity needed by an organization to meet changing demands for its products.

Sub-Optimization

Occurs when a solution is optimized for one department but not for others.

Bounded Rationality

Limits imposed on decision making by costs, human abilities, time, technology, and information availability.

Automation

Machinery that has sensing and control devices that enable it to operate automatically.

Ergonomics

Designing tools, equipment, workstations, and tasks to fit the worker.