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Decision Making & MIS

By:

Navdeep

MSc(IT)-Final

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Decision

ADecision is the act of making up your mind

about something;

ADecision is a position or opinion orjudgment reached after consideration

ADecision is the outcome of a game or contest

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Decision Making

Having the ability to make decisions

Process of making choices or reaching

conclusions The output of an action or opinion of a choice

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Simons Model of Decision-Making

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Intelligence Phase

encompasses collection, classification,

processing, and presentation

It implies an identification of the problem(s)

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Intelligence Phase Components

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Intelligence Phase Components

Problem Searching

the difference between the expected and the real

result

(expected)-(actual reality) = difference/problem

Problem Formulation

proper identification of the problem to avoid the

risk

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Design Phase

The decision maker outlines alternative

solutions

Developing and analyzing possible courses ofaction

Also be examined for technological,

behavioural, and economic feasibility

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Choice Phase

Involves selecting the best alternative

that will best contribute to the goals of the

organization

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Implementation Phase

Actual Work in progress the Decision

Testing the selected alternative

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Types of Decisions

On based of purpose

On based of Level of Programmability

On based of Types

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On based of purpose

Strategic Decision

Taken by High Level of Mgmt People

Long-term objectives; resources; policies; most

imaginative; the most risky; the most uncertainoutcome

Management Control Decision

Taken By Middle Level of Mgmt People

Monitor use of resources; performance & Evaluatepotential innovations; knowledge

medium range, medium significance, with

moderate consequences

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On based of Level of

Programmability Decision under Risk

estimate the probability of outcomes

Decision making under Certainty manager can make an accurate decision

outcome of every alternative choice is known

Decision making under Uncertainty does not have complete information

doesnt know all the alternatives

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On based ofType

Structured Decision / Programmed Decision

in routine, repetitive, well-structured situationswith predetermined decision rules

Unstructured Decision / Non-ProgrammedDecision

to situations that are unique, are poorly defined andlargely unstructured

Semi-structured Decision

one which is partially programmable, but stillrequires human judgment.

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Methods for Choosing Among

Alternatives Decision Theory or Decision Analysis

knowledge and related analytical techniques ofdifferent degrees of formality

can apply to conditions of certainty, risk, oruncertainty

Decision Tree

uses a tree-like graph

commonly used in operations research Another use for calculating conditional probabilities

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Contd..

UtilityTheory used to predict or prescribe the choice

depends on the preferences of the individual decisionmaker

Optimization Techniques seeks to minimize or maximize a real function

finding "best available" values of some objective

Example

Linear programming

Integer programming

Quadratic programming

Nonlinear programming

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