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Business Decision Making, Second Edition, 2nd Edition
book

Business Decision Making, Second Edition, 2nd Edition

by Dr. Milan Frankl
January 2019
Beginner content levelBeginner
158 pages
3h 7m
English
Business Expert Press
Content preview from Business Decision Making, Second Edition, 2nd Edition

CHAPTER 11

Believe in Numbers—But Not Too Much

(What You Can Measure, You Might Manage)

Vignette: The Columbia Disaster

Numbers are not everything.

The following is a famous example in which the quantitative approach to decision making led to a faulty decision.

When the Physics Nobel laureate Richard Feynman was investigating the shuttle’s reliability following the Columbia disaster in 1986, he noticed that the probability of a failure was estimated to be 1 in 100,000 by management, but only 1 in 100 by the engineers.29 Instead of accepting the discrepancy of those estimates as a sign of weakness, the management preferred to rely on numbers, numbers that, in hindsight, made no sense. The management’s evaluation was wrong. It gave a false sense ...

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Publisher Resources

ISBN: 9781948976381