Table of Contents
2.0 Discuss the importance of decision making and the application of decision analysis.
2.1 Importance of decision making.
2.2 Application of decision analysis.
3.0 Identify and outline a decision problem relating an external organization which involves multiple objectives
4.0 Apply the simple multi-attribute rating technique (SMART) to the identified decision problem.
Step 1: Who is the decision-maker and why?
Step 2: Identify all the alternatives courses of action.
Step 3: Identify the attributes that are relevant to the decision problem.
Step: For each attribute, assign values to measure the performance of the alternatives on that attribute
Step 5: Determine the weight for each attribute.
Step 6: Convert the raw data into a weighted value.
Step 7: Choose the best alternative.
Step 8: A sensitivity analysis.
5.0 Discuss and detail the strengths and limitations of your analysis in the context of your decision problem
Decision making is an important component of business success, where effective decision making leads a business into longer-term prosperity. However, for making effective decisions for a business it is essential for the decision-makers to understand the decision-making process clearly. In addition, the decision-makers need to have a clear idea regarding the decision analysis process (Chip and Dan. 2018). This paper first gives an outline of the term of decision making along with its importance in businesses and key characteristics of the decision-making process.
The first section of this paper also discusses the application of decision analysis focusing on the decision analysis process flowchart that highlights seven key steps of decision analysis. The second part of this paper defines a decision problem faced by an external organization called Scriptum, a stationery shop in the UK. The third part of this paper applies a widely recognized decision making/analysis method (Simple Multi-Attribute Rating Technique) to the problem defined in the second part of this paper. Finally, this paper gives an overview of the positives and negatives sites of the decision analysis in the context of the problem identified.
2.0 Discuss the importance of decision making and the application of decision analysis
2.1 Importance of decision making
Concept of decision making
The term decision indicates the choice of something from various types of availability of alternatives. Decision-making is the process of choosing one from more than one course actions due to accomplish specific outcomes. The success of a task depends on the appropriate decision at the right time (Tschappeler et al., 2017). Decision-making is an important function of management. The real function of a manager or a leader is to take the right decision at the right time. The other functions of a manager like planning, organizing, staffing, directing, coordinating and controlling depend on the appropriate decision (Sharma, 2018).
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The business activities are accomplished in the right way after the preparation of the decision of the manager (Hammond et al., 2014). The objectives, goals, strategies, policies, and designs of the firm also depend on the right decision. The decision making not only affects the managerial activities but also affects the internal and external functions of a manager. The problems faced by business organizations are also eliminated by proper planning. The strengths of the firm may increase through appropriate decision making (Tschappeler et al., 2017).
On the other hand, the weaknesses may decrease and the business organization can utilize market opportunities very effectively and efficiently. An accurate decision affects positively but an inaccurate decision affects them negatively. Therefore; the manager should be careful about the internal and external issues to make the appropriate decisions for the organization (Sharma, 2018).
The implication of decision making
Decision making has various types of definition but it has inter-related implications. At the first stage of making a decision; the managers are finding the availability of choices and evaluate the acceptability of the choices (Sharma, 2018). After that; the managers find the acceptability of the alternatives. A business organization does not make a decision if there is no availability of alternative courses of action. In the third stage of making a decision, managers make a decision on the basis of a specific purpose. At the final stages; the managers evaluate the feasibility of the alternatives and ranking the potential alternative courses of action and take the best potential decision for the firm and implement the decision in the firm (Hussien, 2012).
Importance of Decision-Making
Decision making has significant importance on the prosperity of a business organization. The overall performance of the firm depends on the decision of the manager. The functions of a manager like planning, organizing, staffing, directing, coordinating and controlling that also depend on the decision (Zane, 2015). At the planning stage; the manager has to consider internal and external issues of the business organization and make a decision about the planning of the organization……………