May be defined as "the process of identifying & choosing alternative courses of action in a manner appropriate to the demands of the situation"
The heart of all the mgmt function
Diagnose problem
Analyze environment
Articulate problem or opportunity
Develop viable alternatives
Evaluate alternatives
Make a choice
Implement decision
Evaluate & adapt decision results
Exists when there is a difference bw an actual situation and a desired situation
Components of the Environment:
Refers to organizational activities within a firm that surrounds decision-making
Refers to variables that are outside the organization and not typically within the short-run control of the top mgmt
The process of selecting among alternatives representing potential solutions to a problem
Carrying out the decision so that the objectives sought will be achieved
The process wc requires checking at each stage of the process to assure that the alternatives generated, the criteria used in evaluation, and the sln selected for implementation are in keeping with the goals and objectives...
Actions made to ensure that activities performed matched the desired activities or goals, that have been set
Qualitative eval
Quantitative eval
Approaches in Solving Problems:
Refers to evaluation of alternatives using intuition and subjective judgment
Refers to the evaluation of alternatives using any technique in a group classified as rational and analytical
Inventory models
Queuing theory
Network models
Forecasting
Regression analysis
Simulation
Linear programming..
Types of Quantitative Models:
Consist of several types all designed to help the engineer manager make decisions regarding inventory
EOQ model
Production Order quantity model
Back order inventory model
Quantity discount model
Used to calculate the number of items that should be ordered at one time to minimize the total yearly cost of placing orders..
Production order quantity model
An eoq technique applied to production orders
Back order inventory model
An inventory model used for planned shortages
Inventory model used to minimize the total cost when quantity discounts are offered by suppliers
Describes how to determine the number of service units that will minimize both customer waiting time and cost of service
Models where large complex tasks are broken into smaller segments that can managed independently
2 most prominent network models:
A technique wc enables engineer managers to schedule, monitor, and control large and complex projects by employing 3 time estimates for each activity
A network technique using only one time factor per activity that enables engineer managers to schedule, monitor, and control..
A forecasting method that examines the association bw two or more variables
A model constructed to represent reality, in wc conclusions about real-life problems can be used
A quantitative technique that is used to produce an optimum solution within the bounds imposed
A quantitative technique where samples of populations are statistically determined to be ised for a number of processes, such as quality control and marketing research
Statistical Decision-theory
Rational way to conceptualize, analyze, and solve problems in situations involving limited, or partial information abt th decision environment
The collection of past and current info to make predictions abt the future
May be simple or multiple depending on the number of independent variables present