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    Learning Activity 5. Decision-Making Situations

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    recalestructuras7
    The document discusses three primary decision-making situations: certainty, uncertainty, and risk. [1] Certainty involves complete information about outcomes and probabilities. [2] Uncertainty lacks comprehensive information and unknown probabilities. [3] Risk features known outcomes but uncertain probabilities. The comparative table then outlines the key characteristics and techniques for each situation. Certainty allows for techniques like cost-benefit analysis using reliable data. Uncertainty necessitates flexible strategies and tools like scenario analysis given partial information. Risk employs risk analysis and expected value calculations with known probabilities but uncertain outcomes.

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    Learning Activity 5. Decision-Making Situations

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    The document discusses three primary decision-making situations: certainty, uncertainty, and risk. [1] Certainty involves complete information about outcomes and probabilities. [2] Uncertainty lacks comprehensive information and unknown probabilities. [3] Risk features known outcomes but uncertain probabilities. The comparative table then outlines the key characteristics and techniques for each situation. Certainty allows for techniques like cost-benefit analysis using reliable data. Uncertainty necessitates flexible strategies and tools like scenario analysis given partial information. Risk employs risk analysis and expected value calculations with known probabilities but uncertain outcomes.

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    The document discusses three primary decision-making situations: certainty, uncertainty, and risk. [1] Certainty involves complete information about outcomes and probabilities. [2] Uncertainty lacks comprehensive information and unknown probabilities. [3] Risk features known outcomes but uncertain probabilities. The comparative table then outlines the key characteristics and techniques for each situation. Certainty allows for techniques like cost-benefit analysis using reliable data. Uncertainty necessitates flexible strategies and tools like scenario analysis given partial information. Risk employs risk analysis and expected value calculations with known probabilities but uncertain outcomes.

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    10 views6 pages

    Learning Activity 5. Decision-Making Situations

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    recalestructuras7
    The document discusses three primary decision-making situations: certainty, uncertainty, and risk. [1] Certainty involves complete information about outcomes and probabilities. [2] Uncertainty lacks comprehensive information and unknown probabilities. [3] Risk features known outcomes but uncertain probabilities. The comparative table then outlines the key characteristics and techniques for each situation. Certainty allows for techniques like cost-benefit analysis using reliable data. Uncertainty necessitates flexible strategies and tools like scenario analysis given partial information. Risk employs risk analysis and expected value calculations with known probabilities but uncertain outcomes.

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    FRONT PAGE

    NATIONAL POLYTECHNIC INSTITUTE

    SUPERIOR SCHOOL OF COMMERCE AND ADMINISTRATION

    (SANTO TOMAS UNIT).

    Decision-Making and Negotiation

    Learning Activity 5. Decision-Making Situations

    STUDENT:

    Miguel Ángel Flores Trujillo.

    ENROLLMENT NUMBER:

    20210A1511

    PROFESSOR:

    LEONARDO ESTEBAN BRISEÑO RIOS

    GROUP:

    4DX20
    INSTRUCTIONS

    Learning Activity 5. Decision-Making Situations

    Learning Activity 5. Decision-Making Situations

    An administrator spends a significant part of his time on making decisions related


    to different situations such as certainty, uncertainty and risk, whose classification
    depends on the amount of information that is available. In practice an administrator
    faces various conditions, so he must be prepared to address each of them. In
    addition, he must take into consideration that there will be times when he has little
    time to gather information, to analyze it and to make decisions; these adverse
    circumstances are frequently found in any institution or company.

    Thus, in this activity you will learn about the different situations that can arise at the
    moment of decision-making, which becomes relevant in changing times or in the
    ones the available information is scarce.

    To perform this activity read and analyze the following resources:

    • Decision-Making Situations
    •Situations Involved in Decision-Making
    •Managerial Decision Making Elmik92. (2013, December 15). Managerial
    Decision Making [Video file]. Retrieved from https://www.youtube.com/watch?
    v=a-BFwptdCVI

    Then, identify in the previous resources the different situations that can affect the
    decision-making: certainty, uncertainty and risk.

    After that, make a comparative table in which you mention and describe the
    characteristics and techniques of each of the three situations.

    Make your comparative table in a free format; remember that ideas must be in an
    orderly, clear, and coherent manner; properly cite and reference at least three
    sources in an APA format.

    Post your comparative table in this task’s mailbox no later than the fourth day
    of the second work week before 23:55 hours.

    2
    Introduction

    Decision-making is an essential aspect of both personal and professional life. The


    process of making decisions involves a multifaceted analysis of available
    information, potential outcomes, and associated risks. In various scenarios,
    decision-makers encounter differing levels of knowledge and information, which
    significantly impact the decision-making process. Three primary scenarios –
    certainty, uncertainty, and risk – characterize the environments in which decisions
    are made.

    Certainty refers to situations where decision-makers possess complete information


    about all possible outcomes and their probabilities. Uncertainty, on the other hand,
    presents scenarios in which decision-makers lack comprehensive information and
    face unknown probabilities regarding potential results. Meanwhile, risk involves
    known outcomes but with associated probabilities.

    This comparative table aims to delineate the distinct characteristics and techniques
    employed in decision-making under these three scenarios: certainty, uncertainty,
    and risk. Understanding the nuances of each scenario is pivotal in developing
    strategies and methods to optimize decision-making processes in different
    contexts, be it financial, managerial, or strategic planning. By exploring and
    analyzing these scenarios, this table provides a comprehensive overview to guide
    effective decision-making in various realms of professional and personal life.

    3
    Comparative Table

    Characteristics and Certainty Uncertainty Risk


    Techniques

    Definition The decision-maker knows The decision-maker does not The decision-maker
    all possible outcomes and know all possible outcomes knows all possible
    their associated and the probabilities are outcomes, but
    probabilities. unknown. associated probabilities
    are known.

    Level of Information Complete and accurate Incomplete or inaccurate Complete information


    information. information. but with probabilities of
    occurrence.

    Certainty High certainty. Low certainty. Partial certainty.

    Common Techniques Cost-benefit analysis, linear Scenario analysis, sensitivity Risk analysis, game
    programming, deterministic analysis, decision-making theory, expected value.
    methods. models under uncertainty.

    4
    Data Sources
    Reliable historical and Partial data, expert opinions, Historical data,
    current data. simulations. estimated probabilities.

    Example Calculating the return on Deciding whether to invest in Assessing the financial
    investment of a savings a new market without risk of a project based
    bond. historical data. on market data.

    Level of Strategy Well-defined and planned Adaptive and flexible Strategies that optimize
    strategies. strategies. risk and reward.

    5
    REFERENCE SOURCES

    "Sanchez, M., Ortiz, M., & Lopez, J. (2008). Problem-solving with uncertainty and
    multiple objectives. "Journal of the Faculty of Engineering" UNAM, 33(4), 101-110.

    "Addi, I. (2023). DECISION-MAKING UNDER RISK: SEQUENTIAL DECISIONS


    EXAMPLES OF APPLICATION IN BUSINESS MANAGEMENT. Research Papers
    in Administration and Economics, 12(2), 1-16."

    "Palma, R. (2023). Decision-making in situations of certainty, uncertainty, or risk.


    Journal of Management and Business, 10(2), 1-12."

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