To make a decision on the costs to be considered, how to accommodate the increasing demand and whether to shift the technicians to work an additional shift, I would use rational model of decision-making (Walker, 2011). This model consists of four steps that include problem identification, generation of an alternative solution, selection of a solution and implementation and evaluation of the solution.
The rational decision-making model will help me to make a logically sound decision since it will guide me to evaluate all the choices presented and then enable me to make a choice that will maximize my benefits and minimize costs. This decision making model is also applicable in this case as the case involves data that can be collected and analyzed and can, therefore, be quantified- the rational decision making model only considers those factors that can be quantified.
There are several decision-making traps that are highly likely to cloud my judgment, in this case, where I am highly confronted with uncertainty of events like the increase or decrease in the demand for cattle tests. The anchoring decision-making trap could cloud my judgment, in this case. In decision-making, the mind normally gives disproportionate weight to the very first information, which it receives. This means that the initial impression, data or estimates do anchor subsequent judgments and thoughts (Proctor, 2009).
Even though a heavy reliance on past events or trends in the demand for cattle tests can lead to reasonable and accurately estimated of future demand, it may tend to give too much weight to past events and not enough weight to other factors. In this case, I may give too much weight on how the increased demand would result in additional shifts for the technicians and fail to take into considerations other important factors such as the accuracy of the cattle test, accommodation of increased demand and costs before making my decision.
Management Decisions in Accounting
The status-quo trap would also cloud my judgments since, as a decision maker, I would display a very strong bias towards the alternatives/choices presented in the cattle tests that may seem to perpetuate my status quo. The forecasting and estimating traps may also cloud my judgments. Making forecasts and estimates about increased demand for cattle tests in the future, which are uncertain events may be difficult based on the accuracy of the estimates. This is because I will not be in a position to tell whether I am right or wrong in making the estimate of demand and whether the demand will continue in the foreseeable future.
The increased demand may have been cyclical and would not continue in the future. This can highly affect or influence the way I make my decision on how to handle the increased demand for cattle test.
To make better decisions, in this case, I will need the assistance of decision-making tools and techniques as they will help me go through a thoughtful decision-making process. For example, I will use cost-benefit analysis as a decision-making technique. Cost-benefit analysis is a decision making tool and technique that will help me to weigh all the financial factors in the case of BSE Veterinary Services and each applicable alternative in order to come up with a final decision that would economically make sense (Proctor, 2009). This decision-making technique is a quantitative approach that will help me decide whether I should go ahead with the decision chosen. This decision-making technique is applicable to a variety of situations. The decision-making technique and tool will help BSE Veterinary Services to determine whether the accuracy of the tests will be affected by requiring the technicians to work an additional shift. Cost-benefit analysis involves adding up all the benefits and costs (assigning monetary values to benefits and costs) and weighing them in order to determine whether to go ahead or not. In this case therefore, the decision making technique/Model will help BSE Veterinary Services to determine whether increased demand will continue for the foreseeable future and if it will be possible to earn extra profit by increasing the selling price in order to reduce the rise in demand. The cost-benefit analysis would, therefore, help to determine which decision to take based on its benefits over costs.
My final decision would be to accommodate the increasing demand for cattle tests as it would yield more profit. Based on my judgements, I think the increased demand is likely to continue in the future and therefore it will be worthwhile to take in more technicians to work on the extra shifts as this would result in increased profits. Regardless of the uncertainty evidence in my situation, I will have to make a decision that will yield more benefits over costs hence leading to increased profits. Therefore, I will go ahead to carry out the cattle tests on the current demand for 18,000 tests per period.
The rational decision-making model will help me to make a logically sound decision since it will guide me to evaluate all the choices presented and then enable me to make a choice that will maximize my benefits and minimize costs. This decision making model is also applicable in this case as the case involves data that can be collected and analyzed and can, therefore, be quantified- the rational decision making model only considers those factors that can be quantified.
There are several decision-making traps that are highly likely to cloud my judgment, in this case, where I am highly confronted with uncertainty of events like the increase or decrease in the demand for cattle tests. The anchoring decision-making trap could cloud my judgment, in this case. In decision-making, the mind normally gives disproportionate weight to the very first information, which it receives. This means that the initial impression, data or estimates do anchor subsequent judgments and thoughts (Proctor, 2009).
Even though a heavy reliance on past events or trends in the demand for cattle tests can lead to reasonable and accurately estimated of future demand, it may tend to give too much weight to past events and not enough weight to other factors. In this case, I may give too much weight on how the increased demand would result in additional shifts for the technicians and fail to take into considerations other important factors such as the accuracy of the cattle test, accommodation of increased demand and costs before making my decision.
Management Decisions in Accounting
The status-quo trap would also cloud my judgments since, as a decision maker, I would display a very strong bias towards the alternatives/choices presented in the cattle tests that may seem to perpetuate my status quo. The forecasting and estimating traps may also cloud my judgments. Making forecasts and estimates about increased demand for cattle tests in the future, which are uncertain events may be difficult based on the accuracy of the estimates. This is because I will not be in a position to tell whether I am right or wrong in making the estimate of demand and whether the demand will continue in the foreseeable future.
The increased demand may have been cyclical and would not continue in the future. This can highly affect or influence the way I make my decision on how to handle the increased demand for cattle test.
To make better decisions, in this case, I will need the assistance of decision-making tools and techniques as they will help me go through a thoughtful decision-making process. For example, I will use cost-benefit analysis as a decision-making technique. Cost-benefit analysis is a decision making tool and technique that will help me to weigh all the financial factors in the case of BSE Veterinary Services and each applicable alternative in order to come up with a final decision that would economically make sense (Proctor, 2009). This decision-making technique is a quantitative approach that will help me decide whether I should go ahead with the decision chosen. This decision-making technique is applicable to a variety of situations. The decision-making technique and tool will help BSE Veterinary Services to determine whether the accuracy of the tests will be affected by requiring the technicians to work an additional shift. Cost-benefit analysis involves adding up all the benefits and costs (assigning monetary values to benefits and costs) and weighing them in order to determine whether to go ahead or not. In this case therefore, the decision making technique/Model will help BSE Veterinary Services to determine whether increased demand will continue for the foreseeable future and if it will be possible to earn extra profit by increasing the selling price in order to reduce the rise in demand. The cost-benefit analysis would, therefore, help to determine which decision to take based on its benefits over costs.
My final decision would be to accommodate the increasing demand for cattle tests as it would yield more profit. Based on my judgements, I think the increased demand is likely to continue in the future and therefore it will be worthwhile to take in more technicians to work on the extra shifts as this would result in increased profits. Regardless of the uncertainty evidence in my situation, I will have to make a decision that will yield more benefits over costs hence leading to increased profits. Therefore, I will go ahead to carry out the cattle tests on the current demand for 18,000 tests per period.
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