DECISION MAKING

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

RATIONALITY… 1. THERE MUST BE AN ATTEMPT TO REACH SOME GOAL THAT COULD NOT BE ATTAINED WITHOUT POSITIVE ACTION 2. THEY MUST HAVE A CLEAR UNDERSTANDING OF ALTERNATIVES BY WHICH A GOAL COULD BE REACHED UNDER EXISTING CIRCUMSTANCES AND/OR LIMITATIONS

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

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

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. 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

PROCESS OF EVALUATION QUANTITATIVE AND QUALITATIVE FACTORS QUANTITATIVE AND QUALITATIVE FACTORS MARGINAL ANALYSIS MARGINAL ANALYSIS COST EFFECTIVENESS ANALYSIS COST EFFECTIVENESS ANALYSIS PREVIOUS PREVIOUS PREVIOUS

SELECTION FROM AMONG ALTERNATIVES EXPERIENCE EXPERIENCE EXPERIMENTATION EXPERIMENTATION RESEARCH AND ANALYSIS RESEARCH AND ANALYSIS PREVIOUS PREVIOUS PREVIOUS

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

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

MODERN APPROACHES TO DECISION MAKING RISK ANALYSIS RISK ANALYSIS DECISION TREES DECISION TREES DECISION PREFERENCE THEORY PREFERENCE THEORY GOTO GOTO GOTO

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

DECISION TREES.. ADVANTAGES: 1. ABLE TO SEE AS A GRAPHICAL REPRESENTATION, THE ALTERNATIVES AVAILABLE 2. BY INCORPORATING PROBABLILTIES, COMPREHENSION OR TRUE PROBABILITIES OF DECISIONS LEADING TO DESIRED RESULTS ARE MORE CLEAR 3. DECISIONS ARE FASTER AND SHARPER PREVIOUS

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

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 ?”

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