MANAGERIAL ACCOUNTING FOR MANAGERS
5th Edition
ISBN: 9781265056278
Author: Noreen
Publisher: MCG
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Chapter P, Problem P.12E
Cognitive Bias and Decision Making
During World War II, the U.S. military was studying its combat-tested fighter planes to determine the parts of the plane that were most vulnerable to enemy fire. The purpose of the study was to identify the most vulnerable sections of each plane and then take steps to reinforce those sections to improve pilot safety and airplane durability. The data gathered by the U.S. military showed that certain sections of its combat-tested fighter planes were consistently hit more often with enemy fire than other sections of the plane.
Required:
- Would you recommend reinforcing the sections of the plane that were hit most often by enemy fire, or would you reinforce the sections that were hit less frequently by enemy fire? Why?
- Do you think cognitive bias had the potential to influence the U.S. military’s decision-making process with respect to reinforcing its fighter planes?
Source: Jerker Denrell, "Selection Bias and the Perils of Benchmarking,” Harvard Business Review, Volume 83, Issue 4, pp.114—119.
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Chapter P Solutions
MANAGERIAL ACCOUNTING FOR MANAGERS
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