Decision Making

Decision Making is management, when it comes down to it, all the planning and forecasting will leave you with multiple alternatives, not all choices are easy to make and the pressure may be far too great in some cases but there is exactly when an amazing manager shines.

Following the trend set by previous chapters, decision making was broken down into multiple categories depending on the information available, they are:

1. Decision making under certainty.
   
2. Decision making under risk.
3. Decision making under uncertainty.

Each with their own methods and techniques used to help calculate the best alternative.

Decision making under certainty

This represents an instance where we are certain of what the future holds or at least assume so.

These types of problems are usually solved with linear programming, as there is no risk or chance involved, only maximizing profits or minimizing costs, as such linear programming is the ideal tool for both finding the result and displaying it in a clear and easy to understand way.

Decision making under risk

This state of nature describes having multiple outcomes in which you know the chance of each happening, usually solved by using a tree diagram and multiplying each outcome's probability with it's result and adding them for each alternative.


Decision making under uncertainty

This final state of nature is the vaguest of them all, not only is there the possibility of multiple outcomes but the chance of those outcome occurring is unknown to us as well. There are many ways to calculate these situations and which approach to take is up to you, you could go with maximax (optimist) maximin (pessimist) or minimax.

When its all said and done, these calculation are nothing but guidelines and recommendations, the final call lies with the manager himself.