Asked by sharonda sheriff on Apr 29, 2024
Verified
Kiefer is an operations manager whose budget of $555,000 was approved to buy four new machines in order to increase production by 15%. After seeing what the suppliers had to offer, he realized that the model which would best suit his company's needs was very expensive and he could only purchase three machines rather than four. He requested a budget increase and was denied. Kiefer decided that the three machines will serve the purpose. This is an example of ___.
A) evaluating results
B) bounded rationality
C) rational decision making
D) classical decision model
E) cost benefit analysis
Bounded Rationality
The concept that decision-making is limited by the information available, the cognitive limitations of individuals, and the finite amount of time available to make a decision.
Budget Increase
An upward adjustment in the amount of money allocated for specific purposes, often reflecting growth or expansion in operations or projects.
- Understand the concept of bounded rationality and its implication on decision-making.
Verified Answer
YJ
Yessenia JimenezMay 06, 2024
Final Answer :
B
Explanation :
Kiefer had a budget constraint and was forced to make a decision based on the information and options available within that constraint. This is an example of bounded rationality, which is the concept that people have limited information, resources, and cognitive abilities when making decisions. Although he initially wanted four machines, he had to adjust his decision based on his budget constraint.
Learning Objectives
- Understand the concept of bounded rationality and its implication on decision-making.