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DECISION MAKING

Learn about the process of rational decision making, including identifying and evaluating alternatives, and choosing the best solution that satisfies the desired goals. Discover the importance of developing alternatives and the principle of the limiting factor. Explore modern approaches like risk analysis, decision trees, and preference theory.

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DECISION MAKING

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  1. DECISION MAKING

  2. DECISION MAKING.. • THE SELECTION FROM AMONG ALTERNATIVES OF A COURSE OF ACTION • CORE OF PLANNING • IT IS A RATIONAL PROCESS • CONSISTS OF IDENTIFYING/ DEVELOPING ALTERNATIVES • EVALUATION OF ALTERNATIVES w.r.t GOALS SOUGHT & CHOOSING AN ALTERNATIVE • SOME ALSO INCLUDE PREMISING AS A PART OF DECISION MAKING • GOTO

  3. RATIONALITY… • THERE MUST BE AN ATTEMPT TO REACH SOME GOAL THAT COULD NOT BE ATTAINED WITHOUT POSITIVE ACTION • THEY MUST HAVE A CLEAR UNDERSTANDING OF ALTERNATIVES BY WHICH A GOAL COULD BE REACHED UNDER EXISTING CIRCUMSTANCES AND/OR LIMITATIONS

  4. RATIONALITY.. 3. THEY MUST HAVE INFORMATION AND ABILITY TO ANALYZE AND EVALUATE ALTERNATIVES IN LIGHT OF GOALS SOUGHT 4. THEY MUST HAVE A DESIRE TO COME TO THE BEST SOLUTION BY SELECTING THAT ALTERNATIVE WHICH BEST SATISFIES GOAL ACHIEVEMENT. PREVIOUS

  5. DEVELOPING ALTERNATIVES • IT IS RARE FOR ALTERNATIVES TO BE LACKING • CASE STUDY • ABILITY TO DEVELOP ALTERNATIVE IS AS IMPORTANT AS SELECTING THE BEST ONE

  6. PRINCIPLE OF THE LIMITING FACTOR IN CHOOSING FROM AMONG ALTERNATIVES, THE MORE AN INDIVIDUAL CAN RECOGNISE AND SOLVE FOR THOSE FACTORS WHICH ARE LIMITING OR CRITICAL TO THE ACHIEVEMENT OF THE DESIRED GOAL, THE MORE CLEARLY AND ACCURATELY HE OR SHE CAN SELECT THE MORE FAVOURABLE ALTERNATIVE. PREVIOUS

  7. SELECTION FROM AMONG ALTERNATIVES • EXPERIENCE • EXPERIMENTATION • RESEARCH AND ANALYSIS • PREVIOUS

  8. OPERATIONS RESEARCH • CONCEPT • ESSENTIALS OF O.R. • PROCEDURE • DISTRIBUTION LOGISTICS MODEL – eg • TOOLS IN O.R : PROBABILITY THEORY GAME THEORY QUEUEING THEORY LINEAR PROGRAMMING

  9. OPERATIONS RESEARCH.. • LIMITATIONS: 1.NUMBER OF VARIABLES AND THEIR INTERRELATIONSHIPS 2. HIGH ORDER OF MATHEMATICS 3. COMPLEX 4. QUANTIFICATION OF QUALITATIVE FACTORS 5. MANAGERS LACK MATHEMATICAL KNOWLEDGE 6. OPERATIONS RESEARCH SCIENTISTS LACK MANAGERIAL KNOWLEDGE

  10. MODERN APPROACHES TO DECISION MAKING • RISK ANALYSIS • DECISION TREES • PREFERENCE THEORY • GOTO

  11. DECISION TREES • GRAPHICAL REPRESENTATION • DECISION POINTS AND CHANCE EVENTS ALONG WITH PROBABILITIES ARE MENTIONED • AS CHANCE EVENTS INCREASE, THE TREE BECOMES MORE COMPLICATED

  12. DECISION TREES.. ADVANTAGES: • ABLE TO SEE AS A GRAPHICAL REPRESENTATION , THE ALTERNATIVES AVAILABLE • BY INCORPORATING PROBABLILTIES, COMPREHENSION OR TRUE PROBABILITIES OF DECISIONS LEADING TO DESIRED RESULTS ARE MORE CLEAR • DECISIONS ARE FASTER AND SHARPER PREVIOUS

  13. EVALUATING THE DECISION • SIZE OR LENGTH OF COMMITMENT • FLEXIBILITY OF PLANS • CERTAINITY OF GOALS AND PREMISES • QUANTIFIABILITY OF VARIABLES • HUMAN IMPACT

  14. CASE –OLYMPIC TOY COMPANY “ I expect all my managers to act rationally in every decision that they make ,” declared Shanti, the VP for Olympic. “ Everyone of us, no matter what his/her position, is hired to be a professional rationalist , and I expect all of us not only to know what they are doing but to be right in their decisions. I would agree that you may be excused for occasionally making a mistake , especially if it is a matter beyond your control, but I can never excuse you for not acting rationally.” “I agree with your idea ,Madam, “ said Manjeet, the advertising manager,” and I always try to be rational and logical in my decisions. But would you mind helping me and explaining just what ‘acting rationally’ is ?”

  15. THE END.

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