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The DecisionDecision-Making Process

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The DecisionDecision-Making Process

Identifying

an Existing Problem

Problems are brought to the attention of managers by:

1. Orders issued by managers supervisors 2. Situations relayed to managers by their subordinates 3. The normal activity of the managers themselves

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The DecisionDecision-Making Process

Listing

Alternative Solutions

Limitations on the number of problem-solving alternatives available:

1. Authority factors 2. Biological or human factors 3. Physical factors 4. Technological factors 5. Economic factors

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The DecisionDecision-Making Process

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The DecisionDecision-Making Process

Selecting

the Most Beneficial Alternative

1) List the potential effects of each alternative 2) Assign a probability factor to each of the potential effects 3) Compare each alternatives expected effects and the respective probabilities of those effects
Implementing Gathering

the Chosen Alternative

Problem-Related Feedback

Feedback determines implemented alternatives effect on problem If problem is not solved, seek out and implement another alternative
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DecisionDecision -Making Tools

Probability Decision

Theory

Trees

To compare financial consequences, management must:

1. Study estimates of investment amounts necessary for:
Building a large plant Building a small plant Expanding a small plant

2. Weigh the probabilities of facing different product demand levels 3. Consider projected income yields for each decision alternative

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Group Decision Making

Advantages

and Disadvantages of Using Groups to Make

Decisions

Processes

for Making Group Decisions

Brainstorming

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Group Decision Making

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Group Decision Making

Processes
Nominal

for Making Group Decisions (continued)

Group Technique

Step 1Each group member writes down individual ideas Step 2Each member presents individual ideas orally Step 3After members present ideas, entire group discusses ideas Step 4When discussion completed, a secret ballot is taken

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Group Decision Making

Processes
Delphi

for Making Group Decisions (continued)

Technique

Step 1A problem is identified Step 2Group members are asked to offer solutions to the problem Step 3Responses of all group members are compiled and sent out Step 4Members are asked to generate a new individual solution

Evaluating

Group Decision-Making Processes

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