Download Elements of Decisions - Lecture Slides | BIT 4434 and more Study notes Introduction to Business Management in PDF only on Docsity! 1 Our Objectives • To appreciate an analytical, scientific approach to decision making • To acquire a working understanding of the structure of decisions • To understand the role of models in support of decision making • To become proficient in building and implementing simulation models Elements of Decisions • Decision Options, Alternatives, Choices • Performance Measures • Criteria • Parameters • Time Frame and Budget • Decision-Making Process 2 Decision Options Continuous and Infinite Discrete and FiniteorHow many hours of overtime should we budget for next month? How many people should we hire for the new facility? Simultaneous Sequentialor What services should the new facility provide and how many workstations should it have? How many hours of labor should we schedule in each of the next six months? 5 2 Performance Measure Breakdown Overall Performance Total Cost Quality Customer Service 6 PM Hierarchy Labor Cost Material Cost Overhead Cost Total Cost Dept. A Dept. B Supervision Maintenance 7 Performance Measures Objective Subjectiveor Measurable Proxiedor Deterministic Stochasticor Single Valued Time Seriesor 8 5 Scientific Method Reality Identify system Descriptive Model Test Model Fit Observe Collect Data Derive useful results Optimize Computational form Implement Operationalize, Sell, Revamp, Install, Train, Evaluate Applied Math Support Identify system Descriptive Model Test Model Fit Dimensions, scales, variables, parameters Relationships, dependencies Statistics Derive useful results Optimize Computational form Implement Algebra, Analysis Math Programming Numerical Analysis Systems Analysis Implementation - the Real Test • What staffing changes will solution require? • Is the role of the DM acceptable? th t t th it- rea o au or y - understand limits of decision support • What data will solution require? • What training will be required of users? • How long, how much, and how to 6 Decision Support • Is the model accurate? • Can the user understand the model? • Do we have the data that the model needs? The Decision Making Cast Change Agents Change Authorizers Change Implementers Change Beneficiaries Decision Analysts 12 Descriptive Models Descriptive Values of Decision Variables Values of Parameters Values of Performance Measures Model 15 7 Tradeoffs PM 1 60 80 100 120 PM 2 0 20 40 Decision Variable 16 Trial & Error Solutions Descriptive Model Values of Decision Variables Values of Parameters Try Again Values of Performance Measures Good Performance? No Yes Interpret and Apply 17 Decision Support Tools Descriptive • Spreadsheets • Computer Simulation • Stochastic Models 18
