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Decisions must be made at various levels in the workplace. They are also made at the various stages in the management process.
Decision making is a responsibility of the engineer manager. It is understandable for managers to make wrong decisions at times. The problem is if he/she cannot make his/her own decisions.
Management must strive to choose a decision option as correctly as possible. The higher the management level is, the bigger and the more complicated decision making becomes.
Decision Making may be defines as
the process of identifying and choosing
alternative courses of action in a manner
appropriate to the demands of the
situation. This points out that an engineer
manager must adapt a certain procedure
designed to determine the best option
available to solve certain problems.
Rational Decision Making according to David H. Holt is a process involving the following steps:
1. Diagnose Problem
2. Analyze Envt
3. Articulate Problem/Opportunity
4. Develop Viable Alternatives
5. Evaluate Alternatives
6. Make A Choice
7. Implement Decision
8. Evaluate and Adapt Decision Results
To provide an engineer manager with
some guides in decision making, he must
be familiar with the following
approaches:
1. Qualitative Evaluation
2. Quantitative Evaluation
This term refers to evaluation of
alternatives using intuition and subjective
judgment. Stevenson states that
managers tend to use this approach
when:
1. The problem is fairly simple
2. The problem is familiar
3. The costs involved are not great
4. Immediate decisions are needed.
This term refers to the evaluation of
alternatives using any technique in a group
classified as rational and analytical.
Inventory Models
Queuing Theory Network Models
Forecasting
Regression Analysis
Simulation
Linear Programming
Sampling Theory
Statistical Decision Theory
Economic Order Quantity Model – used to calculate the number of items that should be ordered at one time to minimize the total yearly cost of placing orders
Production Order Quantity Model – an EOQ technique applied to production orders
Back Order Quantity Model – an invty model used for planned shortages
Quantity Discount Model – used to minimize the total cost when quantity discounts are offered by suppliers
This describes how to determine the
number of service units that will minimize
both customer waiting time and cost of
service.
Program Evaluation Review Technique – a technique which enables engineer managers to schedule, monitor, and control large and complex projects by employing three time estimates for each activity
Critical Path Method – a network technique using only one time factor per activity that enables engineer managers to schedule, monitor, and control large and complex projects
The collection of past and current
information to make predictions about
the future.
1. Naïve Approach
2. Simple Moving Average
3. Weighted Moving Average
It is a model constructed to represent
reality, on which conclusions about real
life problems can be used. Simulation
does not guarantee an optimum
solution, but it can evaluate the
alternatives fed into the process by the
decision maker.
It is a quantitative technique, that is used
to produce optimum solution within the
bounds imposed by constraints upon the
decision.
It is a quantitative technique where
samples of population are statistically
determined to be used for a number of
processes, such as quality control and
marketing research.