Decision Making

Decision Making as a Management Responsibility

Decisions are usually made at various levels in the workplace It is a responsibility of engineer manager It may be defined as the process of identifying and choosing alternative courses of action in a manner appropriate to demands of the situation According to Nickels: the heart of all the management functions

Decision Making Process

Diagnose problem Analyze environment Articulate problem or opportunity Develop viable alternatives Make a choice Implement decision Evaluate and adapt decision results

Diagnose Problem
Identify problem A problem exists when there is a difference between an actual situation and desired situation

Analyze the Environment

Identify constrains in the environmental analysis which are spelled out as either internal or external limitations
Limited funds available for the purchase of equipment Limited training on the part of employees Ill-designed facilities

Develop alternatives
Steps:
Prepare a list of alternative solutions Determine the viability of each solutions Revive the list by striking out those which are not viable

Evaluate Alternatives
Alternatives are evaluated depending on the nature of problems, objectives of the firm, and nature of alternatives presented

Make a choice
The process of selecting the alternative representing potential solutions to a problem.
The alternatives can be ranked from the best to the worst on the basis of some factors, like benefits, costs or risks

Implement Decision
It is carrying out the decision so that the objectives sought will be achieved.

Approaches in Solving Problems

Qualitative Evaluation the term refers to evaluation of alternatives using intuition and subjective judgments
The problem is fairly simple The problem is familiar The costs involved are great Immediate decisions are not needed

Quantitative Evaluation
Evaluation of alternatives using any technique using any technique in a group classified as rational and analytical

Models for quantitative evaluation

Inventory models Sampling theory Queuing theory Statistical decision theory Network models Forecasting Regression models Simulation Linear programming