Informative support for decision-making - the principle is a choice from more alternatives Decision-making - manifested in each managerial activity

Exercise and meaning of decision-making unknown principle problem unknown ambitions and criteria absence time unpopularity of systematic methods lack of necessary information Reasons of intuitive decision-making abundance

Models of decision-making Rational economic model Administrative model –optimization principle –satisfaction principle

Basic conception variant (alternative, option) criteria construction of world (risk situations) subject of decision-making object of decision-making decision-making ambition

Rational process of resolution of decision- making problems Analysis and formulation of a problem Assessment criterions selection Variants creation Appreciation of variants and choice of the most suitable Realization of acceptable variant Controlling results of realized variant Identification of a decision-making problem

Your company needs a new very expensive machine. But you don’t have enough money. So you decide if you buy a new one ( €), older one ( €) or rent it ( € per year). You need to do the decision until 3 weeks. Next week you are going to a fair to present your business. You don’t know the reaction but it can be enormous (it means huge number of potential customers), standard or weak (only few potential customers). You anticipate, that potential customers give you cash advance for your goods. It can be from to €. What alternative of machine obtaining you will decide for? If it is a purchase, you have to pay all the money. Next fair is in two weeks later.

Types of decision-making problems and situations Right and wrong structured problems Decision-making under certainty, risk and uncertainty Static and dynamic decision-making Decision-making with and without conflict

Bad structured problem The global crisis continues, find the way to be profitable. Find new product to our customers. Excercise Také a sheet of paper. Do a hole into it and go through without total destruction of the paper.

Excercise What price reduction can you get? The order above CZk – reduction 5 % Private taking – reduction 5 % Local office – reduction 8 % Create the communication chart A B CD

The final communication chart > (5 %)NYNNYYNY Private taking (5 %)NNYNYNYY Local office (8 %)NNNYNYYY Price reduction 0 % 5 % 8 % 10 % 13 % 18 %

Competitors point of view The previous example was non-conflict. Our solution is independent to actions other people. Conflict decision making What event will we visit? We have a couple. The man want to go to hockey, the woman to the theatre. who/whatHockey together Theatre together to be at home alone He531 She351

Information for decision-making Primary source Secondary source Provision of efficient collection of information –setting range of information –right interpretation of information

A membrane company needs to choose one of fairs to realize an exhibition. It doesn’t have enough money to send representatives to all three fairs. Choose (calculate) the best option by the method of weight classification from data in the table. The criterions are ordered from the most to the less important: Criterion Options O 1O 2O 3 C 1 – costs (€) C 2 – experiences (realized fairs)721 C 3 – distance (km) C 4 – potential of market (customers)

Decision-making´s methods under certainty One criterion Collection of criteria Methods of assessment scale criteria

Decision-making under risk and uncertainty Decision-making´s matrix Probability p1p1 …pipi …pnpn S1S1 …SiSi …SnSn A1A1 U 11 …U 1i …U 1n ……… AJAJ Uj1…Uji…U jn ……… AMAM U m1 …U mi …U mn

Rules of decision-making under risk rule of expected mean value –Ej =  Uji*pi rule of expected mean value of variance –D(z) =  (zi – E(z))2*pi

Rules of decision-making under uncertainty Rule of minimax Rule of maximax Laplace´s rule Hurwitz´s rule Savage´s rule

Selecting the best alternative probability of variants price \ time to be alone in a market 1 year alone 1.5 year alone 2 years alone low middle high The company wants to introduce a new product. The presumptive revenues are depended on time how long will be the company in the market alone. With the rules for deciding in condition of uncertainty choose the best from the three variants.

Rules wc1wc2wc3minimaxmaximaxlaplacehurwicz average v v v max loss matrix wc1wc2wc3max. loss v v v30.800

Team´s resolution of problems Bleachers of constructive thinking –conservatism –apprehensions –prejudices Brainstorming Method 6.3.5

Brainstorming - requirements Quantity is more than quality ! No criticism All members are equipollent Group – heterogeneousness –age, –sex, –experiences, –knowledge …