Chapt04
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Management decision making involves choosing between rational alternatives using management science tools. These tools include linear programming to optimally allocate limited resources, expected value and decision trees to aid decisions under risk, and maximax, maximin, and Hurwicz criteria to guide decisions with uncertainty. Management science formulates problems, builds mathematical models, tests models, derives solutions, and applies solutions to real systems.
Chapt04
- 1. Managing Engineering and Technology Third Edition Babcock and Morse Decision Making Chapter 4
- 3. Chapter Objectives Explain the process of management science Be able to solve problems using three types of decision making tools
- 4. Relation to Planning Managerial decision making is the process of making a conscious choice between two or more rational alternatives
- 5. Management Science Characteristics Systems view of the problem Team approach Emphasis on use of formal mathematical models and statistical and quantitative techniques
- 6. Management Science Process Formulate the Problem Construct a Mathematical Model Test the Model Derive a Solution from the Model Apply the Model’s Solution to the Real System
- 7. Categories of Decision Making Tools Certainty Risk Uncertainty
- 8. Decision Making Certainty Linear Programming One of best known tools of Management Science Used to determine optimal allocation of an organization’s limited resources
- 9. Linear Programming State the problem Decision Variables Objective function Constraints
- 10. Decision Making Under Risk Expected Value Decision Trees Queuing Simulation
- 11. Decision Making Uncertainty Maximax Maximin Hurwicz Equally likely
- 12. Computer-Based Information Systems Integrated Data Bases Management Information/Decision Support Systems Expert Systems