How to Measure Anything Workbook: Finding the Value of Intangibles in Business

CHAPTER 4 Clarifying the Measurement Problem

1. D
2. B
3. D
4. D
5. False. The relevance of any measurement, including greenhouse gas emissions, is that it might lead to better actions.
6. True. Without specifically identified decisions, the manager is merely hoping that the measurement will be informative in some valuable way—which is no better than not having any decision in mind. Only with a specific decision or set of decisions identified can we compute how the uncertainty of that variable affects the decision.
7. True, although this particular decision model has avoidable flaws that must be addressed.
8. C
9. False
10. C
11. B. The alternative of not having worker safety is not a feasible alternative. A feasible alternative is whether or not a particular safety program is justified.
12. E
13. True
14. False. For example, actuarial science in the insurance industry measures uncertainty and risk routinely.
15. C
16. False. Since neither outcome indicates a loss or negative consequence, this example of uncertainty is not an example of risk.
17. True
18. D
19. False. The insurance industry and others had practical definitions of these terms in the nineteenth century.
20. D
21. B
22. D
23. B
24. There is a risk that the need to act will be too subtle to be immediately and consistently detected among the combination of variables on the dashboard. Another risk is that the manager will waste time deciding what to do and designing a specific response when the contingency could have been worked out in advance.
25. At least two of the following: unauthorized access by ...