Decision Making Slides

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    ASSIGNMENT BY:

    HARIS MASHOOD

    L1F10MBBF2016

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    Principles of Management

    Managers asDecision

    Makers

    CHAPTER-3

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    DecisionMaking a choice from two or

    more alternatives.

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    Why Decision-making

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    D

    ecision MakingAdministrative process based on decision making ,decision making is based on choice whereas choice isbased on alternatives.

    Administrative

    process

    Decision Making

    Choice

    Best Alternatives

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    The Decision-Making Process

    Identifying a problem.

    Identification of Decision Criteria.

    Allocating weights to the criteria. Developing alternatives.

    Analyzing the alternatives, that can resolvethe problem.

    Selecting from alternatives.

    Implementing the selected alternative.

    Evaluating the decisions effectiveness.

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    67

    The Decision MakingProcess

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    Step 1:

    Identifying the Problem

    Problem

    Adiscrepancy between an existing and desiredstate of affairs.

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    The decision making process begins by determining that aproblem exists: that is, there is an unsatisfactory condition.This is frequently expressed as a disparity between what isand what should be.

    Whether a decision is necessary or not depends on theadministrators perception. What one person sees as aproblem another may see as perfectly acceptable state ofaffairs. So, the decision process begins with administratorsrecognition that there is a gap between what is desired andwhat actually is.

    e.g. Purchase a new Laptop

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    Step 2:

    IdentifyingD

    ecision Criteria

    Decision Criteria

    Criteria that define what's important or

    relevant in resolving problem.Costs that will be incurred (investments required)

    Risks likely to be encountered (chance of failure)

    Outcomes that are desired (growth of the firm)

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    Important Criteria

    Criterion

    Carrying Weight

    Warranty

    Battery life

    Display Quality

    Memory and Storage

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    Step 3:Step 3:

    Allocating Weights to the CriteriaAllocating Weights to the Criteria

    Assigning a weight to each itemplaces the items in the correctpriority order of their importancein the decision making process.(1-10)

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    Weights for Laptop (1-10)

    Criterion Weight

    Memory and Storage 10

    Battery life 8

    Carrying Weight 6

    Warranty 4Display Quality 3

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    Step 4:D

    eveloping Alternatives

    Toshiba protg s100Dell inspiron 700mHP Pavilion zd8000Apple iBookSoney vaio VGN-FS790

    Gateway NX850XToshiba QomioG15-AV501Lenovo ThinkPad R52

    Identifying viable alternatives

    Alternatives are listed (without evaluation) that can resolvethe problem.

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    Step 5:

    Analyzing Alternatives

    Appraising each alternatives strengths andAppraising each alternatives strengths andweaknessesweaknesses

    An alternatives appraisal is based on its ability toAn alternatives appraisal is based on its ability toresolve the issues identified in steps 2 and 3.resolve the issues identified in steps 2 and 3.

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    Assessed Values of Laptop Computers Using DecisionCriteria

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    Step 6:S

    electing an AlternativeChoosing the best alternative

    The alternative with the highest total weight is chosen.

    The final step in decision making process takes place when

    all the alternatives have been enumerated and evaluated

    against the decision criteria. This final step is the selection of

    the best alternative which has quantitatively beendetermined.

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    Evaluation of Laptop Alternatives AgainstWeighted Criteria

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    Step 7:

    Implementing the Alternative

    Putting the chosen alternative into action.Putting the chosen alternative into action.

    Conveying the decision to and gainingConveying the decision to and gainingcommitment from those who will carry out thecommitment from those who will carry out thedecision.decision.

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    Step 8:E

    valuating theD

    ecisionsE

    ffectiveness

    The soundness of the decision is judged by its

    outcomes.

    How effectively was the problem resolved byoutcomes resulting from the chosen alternatives?

    If the problem was not resolved, what went wrong?

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