Chapter 2 - Decision Making

The action of selecting one alternative from a set of several alternatives.

Managers respond to ways to improve organizational performance

• Decisions in response to opportunities

• Decisions in response to threats

It occurs when managers are impacted by adverse events to the organization.

• Decisions in response to opportunities

• Decisions in response to threats

A conclusion or resolution reached after consideration of alternatives.

These are principles, guidelines, or requirements that are used to make a decision.

Good decision-making is important for the following what reasons? Select all the possible answers.

• Achievement of objectives

• Innovation

• Motivation

• Higher Efficiency

• Growth and Expansion

Elements of Decision-Making

• Future Conditions

• Outcome / Known Pay-off

• Alternative(s)

• All

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

Decision-Making Environments

• Certainty

• Uncertainty

• Risk

• All

It means that relevant parameters such as costs, capacity, and demand have KNOWN values