Seminar on the

topic
Decision making

Meaning and
Definition
Decision making is a process of making
choice between numbers of options and
committing a future course of action.
According to Trewartha and Newport,
“Decision Making involves of a course of
 action from among two or more possible
alternatives in order to arrive at a solution
for a given problem”

Features of decision
making
 Decision making implies that there are
various alternatives.
 It involves a Choice.
 Decision making may be rational or
judgmental.
 It is goal-oriented.

Types of Decisions
 Strategic and Routine decisions
 Programmed and non-programmed
decisions
 Organizational and personal decisions
 Individual and group decisions
  Policy and operative decisions

Decision making
conditions
 Certainty
 Risk
 Uncertainty

Decision making
under RISK
RISK ANALYSIS
Risk analysis seeks to identify the risks
faced by an organization, understand how
and when they arise, and estimate the impact
of adverse outcomes.
It develops probability for every critical
variable in decision problem.
3 methods of estimating probability:
 Priori probability: it is obtained through
inferences from assumed conditions.
 Empirical probability: it is based on
recording actual experience over a period of
time.
 Subjective probability: when there is no
sufficient data to calculate either a priori or
empirical probability, manager estimates
probability on his own judgment.