1. Tools in Decision Making

2. Cost-benefit Analyses Decision Tree Central-Satellite Model
Reference Groups
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3. Cost-Benefit Analyses
1. Finds, quantifies, and adds all the positive factors = benefits
2. identifies, quantifies, and substracts all the negative factors = costs
eg. 1. Should we hire an additional salesperson or assign overtime?
2. is it a good idea to purchase the new stamping machine?
benefits = - can produce 100 more units per
hour
- 3 workers can be replaced
= RM ????
Costs = more electricity = RM ????
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4. Decision Trees Or tree diagram
Is a decision support tool that uses a graph or model of decisions and their possible consequences, including outcomes
(eg. friendship, money can be saved etc.)
People select alternatives based on goals, values etc.
People seek the best outcomes (known to them)
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5. Example of decision trees
investment # true % bonus most likely $ history
Investment investment #2 false rejected
investment #3 true % bonus optimistic
$ history
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6. Central-Satellite Models
A central decision surrounded by satellite decisions that are off-shoots of the main decisions.
eg. Decision to go back to college might require many offshoot decisions involving child care, alternative delivery of affection, a need of extra money, replacing daily activities with study time, nutrition needs etc.
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7. Reference Groups
The people who influence our habits, who provide guidelines or advice to influence our behaviour.
eg. Parents – influence the way we make our decisions
Friendships – love relationships, artists, employers, hometown friends, lecturers etc.
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