Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

Grid organizational development ppt

17/03/2021 Client: saad24vbs Deadline: 2 Day

Decision Theory LEARNING OBJECTIVES SUPPLEMENT OUTLINE 5S.5 Decision Making under Uncertainty, 219 After completing this supplement, you 5S.6 Decision Making under Risk, 220 5S.1 Introduction, 216 should be able to: 5S.7 Decision Trees, 2215S.2 The Decision Process and Causes of L05S.1 Outline the steps in the decision Poor Decisions, 217 5S.8 Expected Value of Perfect

process. Information, 2235S.3 Decision Environments, 218 L05S.2 Name some causes of poor 5S.9 Sensitivity Analysis, 224

decisions. 5S.4 Decision Making under Certainty, 218

L05S.3 Describe and use techniques that apply to decision making under uncertainty.

L05S.4 Describe and use the expected- value approach.

L05S.5 Construct a decision tree and use it to analyze a problem.

L05S.6 Compute the expected value of perfect information.

L05S.7 Conduct sensitivity analysis on a simple decision problem.

55.1 INTRODUCTION -

Decision theory represents a general approach to decision making. It is suitable for a wide range of operations management decisions. Among them are capacity planning, product and service design, equipment selection, and location planning. Decisions that lend themselves to a decision theory approach tend to be characterized by the following elements:

1. A set of possible future conditions that will have a bearing on the results of the decision.

2. A list of alternatives for the manager to choose from.

3. A known payoff for each alternative under each possible future condition.

To use this approach, a decision maker would employ this process:

1. Identify the possible future conditions (e.g., demand will be low, medium, or high; the competitor will or will not introduce a new product). These are called states of nature.

2. Develop a list of possible alternatives, one of which may be to do nothing. t

3. Determine or estimate the payoff associated with each alternative for every possible future condition.

---- ----------------------------------------~--

216

217 Supplement to Chapter Five Decision Theory

If possible, estimate the likelihood of each possible future condition.

5. Evaluate alternatives according to some decision criterion (e.g., maximize expected profit), and select the best alternative.

The information for a decision is often summarized in a payoff table, which shows the expected payoffs for each alternative under the various possible states of nature. These tables are helpful in choosing among alternatives because they facilitate comparison of alternatives. Consider the following payoff table, which illustrates a capacity planning problem.

POSSIBLE FUTURE DEMAND

Alternatives Low Moderate High Small facility $10* $10 $10 Medium facility 7 12 12 Large facil ity (4) 2 16 'Present value in $ millions.

The payoffs are shown in the body of the table. In this instance, the payoffs are in terms of present values, which represent equivalent current dollar values of expected future income less costs. This is a convenient measure because it places all alternatives on a comparable basis. If a small facility is built, the payoff will be the same for all three possible states of nature. For a medium facility, low demand will have a present value of $7 million, whereas both moderate and high demand will have present values of $12 million. A large facility will have a loss of $4 million if demand is low, a present value of $2 million if demand is moder- ate, and a present value of $16 million if demand is high.

The problem for the decision maker is to select one of the alternatives, taking the present value into account.

Evaluation of the alternatives differs according to the degree of certainty associated with the possible future conditions.

5S.2 THE DECISION PROCESS AND CAUSES OF POOR DECISIONS

Despite the best efforts of a manager, a decision occasionally turns out poorly due to unfore- seeable circumstances. Luckily, such occurrences are not common. Often, failures can be traced to a combination of mistakes in the decision process, to bounded rationality, or to suboptimization.

The decision process consists of these steps:

1. Identify the problem.

2. Specify objectives and criteria for a solution.

3. Develop suitable alternatives.

4. Analyze and compare alternatives.

5. Select the best alternative.

6. Implement the solution.

7. Monitor to see that desired result is achieved.

In many cases, managers fail to appreciate the importance of each step in the decision- making process. They may skip a step or not devote enough effort to completing it before jumping to the next step. Sometimes this happens owing to a manager's style of making quick decisions or a failure to recognize the consequences of a poor decision. The manager's ego can be a factor. This sometimes happens when the manager has experienced a series of successes- important decisions that turned out right. Some managers then get the impression that they can do no wrong. But they soon run into trouble, which is usually enough to bring them back down

Payoff table Table showing the expected payoffs for each alternative in every possible state of nature.

L05S.1 Outline the steps in the decision process.

L05S.2 Name some causes of poor decisions.

••

218

Bounded rationality The limitations on decision making caused by costs, human abilities, time, technology, and availability of information.

Suboptimization The result of different departments each attempting to reach a solu- tion that is optimum for that department.

Certainty Environment in which relevant parameters have known values.

Risk Environment in which cer- tain future events have probable outcomes.

Uncertainty Environment in which it is impossible to assess the likelihood of various future events.

EXAMPLE 55-1

Supplement to Chapter Five Decision Theory

to earth. Other managers seem oblivious to negative results and continue the process they associate with their previous successes, not recognizing that some of that success may have been due more to luck than to any special abilities of their own. A part of the problem may be the manager's unwillingness. to admit a mistake. Yet other managers demonstrate an inability to make a decision; they stall long past the time when the decision should have been rendered .

Of course, not all managers fall into these traps-it seems safe to say that the majority do not. Even so, this does not necessarily mean that every decision works out as expected. Another factor with which managers must contend is bounded rationality, or the limits imposed on decision making by costs, human abilities, time, technology, and the availability of information. Because of these limitations, managers cannot always expect to reach deci- sions that are optimal in the sense of providing the best possible outcome (e.g., highest profit, least cost). Instead, they must often resort to achieving a satisfactory solution.

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

Instant Homework Helper
Maths Master
Solution Provider
Pro Writer
Premium Solutions
Writing Factory
Writer Writer Name Offer Chat
Instant Homework Helper

ONLINE

Instant Homework Helper

You can award me any time as I am ready to start your project curiously. Waiting for your positive response. Thank you!

$157 Chat With Writer
Maths Master

ONLINE

Maths Master

Hello, I an ranked top 10 freelancers in academic and contents writing. I can write and updated your personal statement with great quality and free of plagiarism

$89 Chat With Writer
Solution Provider

ONLINE

Solution Provider

Hello, I an ranked top 10 freelancers in academic and contents writing. I can write and updated your personal statement with great quality and free of plagiarism

$91 Chat With Writer
Pro Writer

ONLINE

Pro Writer

I am known as Unrivaled Quality, Written to Standard, providing Plagiarism-free woork, and Always on Time

$85 Chat With Writer
Premium Solutions

ONLINE

Premium Solutions

I will cover all the points which you have mentioned in your project details.

$18 Chat With Writer
Writing Factory

ONLINE

Writing Factory

I have read your project details. I can do this within your deadline.

$57 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Mastering Your CIPD Assignments: Expert Tips from CIPD Assignment Help Specialists - 116 columbus drive hollywell - Why Is The Internet Bad Or Good? - Https atiam train army mil catalog dashboard - Assignment 6 - Great alne primary school - Wk8-16 - Ion boardroom theme word 2016 - Thermal analysis of disc brake ppt - What are the basic objectives of monetary policy - Why has the typical film editor’s job become more difficult in the last fifty years? - Shamoo and resnik 2003 - Law & Ethics in the Business Environment - Mobil oil australia v wellcome international case summary - Presentation essay - DQ - James m mcpherson for cause and comrades - Nima nourizadeh net worth - Most abundant cation in extracellular fluid - Together at one altar road to emmaus - Differential equations formula sheet - Team contract template in project management - Limitations of ansoff matrix - Paige pennington walter ray williams - Coca-cola business strategy pdf - Data table 1 food safety culture results - Case study on data visualization - Anatomy and physiology course outline - Discussion and Assignment - 12 month photo banner kmart - What is a randomized quicksort - Discussion post - Feldman's three-phase model of socialization and the six socialization tactics - Wendy Lewis 3 - Retail method of valuing inventory - Pet shop mt colah - Discussion 08/19 - Teaching jobs northern territory - Pull out rail for baskets algot - Presented below are three independent situations - Parachute shapes and types - Sapling homework answers organic chemistry - Discussion: Parent Guide WEEK 10 - Responding - Chope jumbo riverwalk - To kill a mockingbird chapter 23 summary - ME-8 - Answerdash case study - Which theory is criticized for being too mechanistic - Wickes bath shower screen - Zagat survey llc new york ny - Find the area of the shaded triangle - Chapter 17 preventative maintenance and service procedures - Kingspan tribune xe pre plumbed - 112 waitomo street broadbeach waters - Cavity balance injection molding - Research paper - Alex szepietowski net worth - Cloud Computing - Software as a service - Valeria luiselli tell me how it ends summary - 4 page APA political landscape analysis - 1.4 Week One Reflection - Elite athlete program unimelb - Barings bank nick leeson - La comida de la fonda es mejor que la comida del café condesa. - How to find average current - Limitations of the behavioural approach - Cutover plan template xls - PTSD Powerpoint - A weakness of nonconsequentialists is that they try to avoid - +91-8306951337 get your love back by vashikaran IN Erode - How to make security market line in excel - The Impact of Demographics Changes - The debate& The candidates - Skills approach to leadership northouse - Florence Nightingale - Consider a short 10-meter link - What does standard deviation mean in biology - Positive and negative characteristics of a criminal investigator - Rmit international university vietnam - Db technologies fifty line - Combinations in python - Getting coffee is hard to do quizlet - What is the right supply chain for your product summary - The glass castle discussion questions and answers - Nutrition feeding and eating ati - Lfs103 introductory bioscience textbook - Live feature on pof - Ta hb 0007 1 - Mcdonalds north st marys - Acs synth biol impact factor - Acsm curl up test - Louder with crowder wage gap - Chartered accountants full membership - ELECTRONIC HEALTH RECORD (EHR) - Joss whedon foot fetish - Virtual lab model ecosystems answers - 50 ml volumetric pipette uncertainty - LeaderAsChangeAgent_Assessment4 - Frankenstein chapter 13 summary