DECISION

MAKING
SUBMITTED BY:
JOSHUA JAVIER
MARJORIE REQUILLAS
ARIES SIMAN
CHRISTIAN LUBERAS
OBJECTIVES
• TO KNOW THE MANAGEMENT RESPONSIBILITY

• AN ABILITY TO USE THE DECISION MAKING

PROCESS AND TO HELP YOU UNDERSTAND WHEN
TO USE SOME COMMON DECISION-MAKING
MODELS.

• DEVELOP PROBLEM SOLVING AND DECISION

MAKING SKILLS
INTRODUCTIO
N
Engineering management is a type of management that focuses on the
application of engineering principles to business operations. Engineering
management is a vocation that combines engineering's technical problem-solving
skills with management's organizational, administrative, and planning skills to
oversee complex projects from conception to completion.

Product development, manufacturing, construction, design engineering,

technology, production, and any other industry that employs employees who
execute engineering functions are examples of engineering fields.
 Making decisions is a necessary element of the planning process. All managerial
functions rely on decision-making and problem-solving, however they are typically
viewed as a component of the planning process. This section discusses decision-
making and how it relates to planning. A discussion of management responsibility
in decision making, decision making process, approached in solving problems, and
quantitative models for decision making.
DECISION
MAKING
• The process of recognizing and choosing various courses of action in a way
acceptable to the needs of the situation is known as decision making. Decision
making, "is the heart of all the management functions." (Belarmino, 2015)

Figure 1: Make Up Your Mind: Figure 2: The role of tech in decision making
Source: https://executivesupportmagazine.com/wp-
Source: https://smoothcoder.com/wp-content/uploads
DECISION MAKING AS MANAGEMENT
RESPONSIBILITY
• The engineer manager is responsible for making decisions. It's normal that
managers make mistakes from time to time. As soon as they're detected, the
wise manager will remedy them. The bigger problem is the management who
is unable or unwilling to make judgments.
• Manager must strive to choose a decision option as correctly as possible. Since
they have that power, they are responsible for whatever outcome their
decisions bring. The higher the management level is, the bigger and the more
complicated decision making becomes. (Belarmino, 2015)
EXAMPLE:
• The production manager of a certain company has received a written request
from a section head regarding to purchase of an air conditioning unit. Almost
simultaneously, another request from another section was forwarded to him
requiring the purchase of a forklift. The production manager was informed by
his superior that he can buy one of the two requested items due to budgetary
constraints.
• The production manager must now make a decision. His choice, however,
must be based on sound arguments for he will be held responsible later on, if
he had made the wrong choice.
DECISION MAKING PROCESS
Decision-making is a series of steps a person takes to determine the best option
or course of action to meet their needs. (Belarmino, 2015)
Diagnose Problem - if a manager is willing to make a wise decision, identifying the
problem should be his first step.

Analyze Environment - the environment in which an organization is located plays a

very important role in the success or failure of such an organization. Therefore, it is
very important to conduct an environmental analysis.

Develop Viable Alternatives - problems can often be resolved with any of the
suggested solutions. The best alternatives should be considered by management.

Evaluate Alternatives - Once the feasibility of the alternatives has been established
and the revised list has been drawn up, the remaining alternatives need to be
assessed.
Make a choice - Choice is our ability to make decisions when presented with two or
more options. After assessing the alternatives, the decision-maker must be willing to
make a choice. At this point, he/she has to make sure that all the previous steps have
been performed correctly.

Implement Decision - refers to the execution of a decision to achieve the goals set.
For implementation to be effective, a plan must be developed

Evaluate and adapt decision results - when implementing the solution, the expected
results may or may not occur.
APPROACH IN SOLVING PROBLEM

Decision making and problem solving are belong together. You cannot solve the
problem if you can’t make a decision.

The two types of decision are systematic and rational approach. It is a step-by-step
approach that assists you in identifying a problem, selecting a solution from many
possibilities, and determining an answer. (Dachis, 2011)
The example of systematic approach and rational approach

Systematic approach- The term "systemic approach"

refers to a method of analysis that takes a global view
of a complex system rather than focusing on the
details.
Figure 3: System Approach to Management
Source : https://lh3.googleusercontent.com/

Rational approach – or rational decision-making

approaches include, limited rationality and stumbling
through.

Figure 4: Adopting a Rational approach to decision-making

Source: https://lh3.googleusercontent.com/proxy
DECISION MAKING MODEL
A decision model is a process used to guide teams
to make decisions that can benefit their company.
Each model uses a different method to help you
analyze and overcome challenges. They offer
different ways of thinking about a problem and
identify potential solutions, which is useful for
people with different learning styles or deadlines.
(Indeed, 2021).
Figure 5: Decision Making Models
Source : https://www.mtdtraining.com/
EXAMPLE OF DECISION MAKING MODELS

RATIONAL DECISION MODEL - The rational decision model focuses on using logical
steps to arrive at the best solution. This often involves analyzing multiple solutions at the
same time to select the one that offers the best quality results.

Example: An example of a rational decision would be for an investor to choose one stock
over another because they believe it offers a higher return. Savings can also influence
rational decision making.
INTUITIVE DECISION MODEL - Rather than logical reasoning, intuitive decision
models use feelings and instincts to make decisions. Often team leaders or managers use
this model to make quick decisions when they don't have much time for research or
planning. Intuitive decision processes are less structured and may use prior knowledge of
similar goals or barriers to determine useful solutions

Example : Typical examples where intuition can play an important role in decision
making are: choosing a life partner, choosing the right car, evaluating a job, deciding on
an education, choosing a meal while eating, choosing the next book to read, make a
decision how to dress for today and so on.
RECOGNITION – PRIMED DECISION MODEL - Team leaders can use this model to
assess the basics of a situation and create potential solutions and then think about those
solutions to determine if they can be used. This may require that you have a lot of
experience with goals or obstacles to create a suitable solution.

Figure 6: Recognition-primed decision

Source : http://www.free-management-ebooks.com
CREATIVE DECISION MODEL - Creative decision models use original ideas to create
innovative solutions that achieve goals or overcome obstacles. It involves thinking about
situations and finding solutions without referring to similar situations.

Example : if you decide on a new process, there is nothing waiting on a shelf, the process
has to be designed. For creative decision analysis, take a few extra steps to find more and
/ or better alternatives. Add details to your vision and consider alternatives that match the
details.
QUANTITATIVE MODEL FOR DECISION
MAKING
Quantitative Model is a collection of mathematical and
statistical methods used in managerial problem solving and
decision making, also called operations research (OR) and
management science. Quantitative Model function one refers
to the context of the question, data type, purpose, description,
forecast, exploration. Around the use of models by scientists.
Explicit specification of the model function will allow more
accurate and fair testing of quantitative models and testing of
model generalizations that are suitable for decision making.
(Cox, 2019). Figure 7: what is quantitative decision analysis
Source : https://images.wisegeek.com
QUANTITATIVE TECHNIQUES OF
DECISION MAKING
When making decisions, there are several techniques that managers of a
company or organization can apply. Quantitative techniques help managers
make decisions objectively and efficiently. These techniques rely on scientific
and statistical approaches to make good decisions. (Vedantu, n.d.).
Six important quantitative techniques in decision making are as follows.

• Linear Programming - This technique helps maximize objects with limited

resources. The ultimate goal can be utility optimization or utility
minimization. In simple terms, it can be said that using a resource or
constraint to its maximum potential helps.
Example : Let's say a FedEx delivery man has 6
packages to deliver in a day. The warehouse is
located at point A. The 6 delivery destinations
are given by U, V, W, X, Y, and Z. The numbers
on the lines indicate the distance between the
cities. To save on fuel and time the delivery
person wants to take the shortest route. Figure 8: Example of linear programming
Source : https://lh3.googleusercontent.com
 • Decision Tree - This is essentially a conceptual map of potential decisions and
outcomes in a given situation. It is useful when a manager is required to make
a series of sequential decisions, i.e., earlier decisions have an impact on later
ones.

Example in Fig. 9 the period from decision point

1 to decision point 2 could be one year. These
additional features help to make the use of
decision trees a salutary exercise for managers.

Figure 9: Decision tree

Source : https://www.businessmanagementideas.com
• The Game Theory - ·Managers often use certain quantitative techniques only
when making decisions about their business rivals. The game theory approach
is one of these types of techniques. This technique stimulates competition or
conflict between companies like a game. The main goal of corporate managers
with this technique is to find ways to make money at the expense of their
rivals.

For example : Dead lock - This is a social dilemma scenario like the prisoner’s dilemma in that two players
can either cooperate or defect (i.e. not cooperate). In a deadlock, if Player A and Player B both cooperate,
they each get a payoff of 1, and if they both defect, they each get a payoff of 2. But if Player A cooperates
and Player B defects, then A gets a payoff of 0 and B gets a payoff of 3. In the payoff diagram below, the
first numeral in the cells (a) through (d) represents Player A’s payoff, and the second numeral is that of
Player B:
• Queuing Theory - Every company often suffers from waiting periods or queues
related to its staff, equipment, resources or services. Queuing theory is an O.R.
technique that assists managers in making decisions regarding the establishment
of service facilities to meet erratic demand. Cost issues arise when there are more
service facilities available than are required, or when there are too few facilities
available, resulting in long waiting lines.

Example: sometimes a manufacturing company may accumulate stock

of unsold merchandise due to irregular demand. This theory aims to
solve this kind of problem.
• Simulation - The use of simulation techniques is particularly useful when a
manager or technician wants to know what will happen if they take a certain
course of action. Physical models can be manipulated to conduct simulations, of
course.

Example: One might have a physical model of a machine and actually

keep on increasing its speed to determine at what point it would begin
to jam, fly apart or walk across the floor.
 SUMMARY
Engineering management is a vocation that combines engineering`s technical problem-
solving skills with management`s organizational, administrative, and planning skills to
oversee complex projects from conception to completion. All managerial functions rely on
decision-making and problem-solving, however they are typically viewed as a component
of the planning process. Managers must make choices on the basis of limited or bounded
rationality. From the various alternatives, managers should narrow them down to those few
that deal with limiting factors. Non-programmed decisions are used for unstructured
problems and non-routine decisions are made. Quantitative models can help us understand
systems and behaviors in a number of useful ways.
 The usefulness of Quantitative models are too precise allows us to set well-defined
assumptions. We can represent them numerically by writing a computer program that allow
us for graphical representation. Decision Making and Problem Solving are belong together.
You cannot solve the problem if you can't make a decision. The two types of decision are
systematic and rational approach. It is a step-by-step approach to identifying a problem,
selecting a solution, and determining an answer. Quantitative techniques help managers
make decisions that are objective and efficient. These techniques rely on scientific and
statistical approaches to make good decisions.