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    Enggmanagement Decision Making

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    Adrian Ray Ayam
    Decision making is an essential part of planning and involves choosing between alternatives to achieve desired benefits while minimizing unwanted costs. There are routine decisions that recur frequently and nonroutine decisions for novel situations with high uncertainty. While objective rationality seeks the best solution, bounded rationality aims for a satisfactory solution given limitations. Management science approaches to decision making include using formal models, teams, and quantitative methods. The level of management impacts the number of decisions made, costs of poor decisions, and information needs. Implementation is critical for decisions to have effect.

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    Enggmanagement Decision Making

    Uploaded by

    Adrian Ray Ayam
    42 views10 pages
    Decision making is an essential part of planning and involves choosing between alternatives to achieve desired benefits while minimizing unwanted costs. There are routine decisions that recur frequently and nonroutine decisions for novel situations with high uncertainty. While objective rationality seeks the best solution, bounded rationality aims for a satisfactory solution given limitations. Management science approaches to decision making include using formal models, teams, and quantitative methods. The level of management impacts the number of decisions made, costs of poor decisions, and information needs. Implementation is critical for decisions to have effect.

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    Decision making is an essential part of planning and involves choosing between alternatives to achieve desired benefits while minimizing unwanted costs. There are routine decisions that recur frequently and nonroutine decisions for novel situations with high uncertainty. While objective rationality seeks the best solution, bounded rationality aims for a satisfactory solution given limitations. Management science approaches to decision making include using formal models, teams, and quantitative methods. The level of management impacts the number of decisions made, costs of poor decisions, and information needs. Implementation is critical for decisions to have effect.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    42 views10 pages

    Enggmanagement Decision Making

    Uploaded by

    Adrian Ray Ayam
    Decision making is an essential part of planning and involves choosing between alternatives to achieve desired benefits while minimizing unwanted costs. There are routine decisions that recur frequently and nonroutine decisions for novel situations with high uncertainty. While objective rationality seeks the best solution, bounded rationality aims for a satisfactory solution given limitations. Management science approaches to decision making include using formal models, teams, and quantitative methods. The level of management impacts the number of decisions made, costs of poor decisions, and information needs. Implementation is critical for decisions to have effect.

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    DECISION MAKING

    Objectives
    Relation to Planning
    Types of Decisions
    DECISION MAKING

    Relation to Planning
    Decision Making: Process of making a conscious choice between
    2 or more alternatives producing most desirable consequences
    (benefits) relative to unwanted consequences (costs).

    Decision Making is essential part of Planning


    Planning: Decision in advance what to do, how to do, when to
    do and who is to do it.
    Required also in
    Designing and Staffing and Organization
    Developing Methods of Motivating Subordinates
    Identifying Corrective Actions on Control Process
    DECISION MAKING

    Occasions for Decision


    Occasions are in 3 distinct fields:
    From Authoritative Communications from superiors
    From Cases Referred for Decision by Subordinates
    From Cases Originating in the Initiative of the Executive
    Most important test of executive
    DECISION MAKING

    Types of Decisions
    Routine Decisions (e.g. payroll processing, paying suppliers etc)
    Recur frequently
    Involve Standard Decision Procedures
    Has a Minimum of Uncertainty
    Structured Situations
    Nonroutine Decisions
    Unstructured and Novel Situations
    Nonrecurring Nature
    High Level of Uncertainty
    DECISION MAKING

    Objective versus Bounded Rationality


    A Decision is objectively rational if it is the correct behavior for
    maximizing given values in a given situation.

    Rationality requires
    1. A complete knowledge and anticipations of consequences
    after a choice
    2. Imagination since Consequences lie in future
    2. A choice among all possible alternatives.

    We can only talk about bounded rationality


    DECISION MAKING

    Objective versus Bounded Rationality

    Objective Rationality looks for the


    ‘best’ solution whereas Bounded
    Rationality looks for the ‘good
    enough’ solution.
    DECISION MAKING

    Management Science Characteristics


    1. A System View of Problem
    2. Team Approach
    3. Emphasis on the Use of Formal Mathematical Models and
    Statistical and Quantitative Methods

    Models?
    DECISION MAKING

    Categories of Decision Making


    Decision Making Under Certainty: Linear Programming
    Decision Making Under Risk: expected value, decision
    trees, queuing theory, and simulation
    Decision Making Under Uncertainty: Game Theory
    DECISION MAKING

    Effect of Management Level on Decisions

    Management Number of Cost of Making Information


    Level Decisions Poor Decisions Needs

    Top Least Highest Strategic


    Middle Intermediate Intermediate Implementation
    First-Line Most Lowest Operational
    DECISION MAKING

    Implementation

    Decisions are useless unless they are put into


    practice.

    Courage is the willingness to submerge


    oneself in the loneliness, the anxiety, and the
    guilt of a decision maker.

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