Analytical Thinking & the Decision Making Process
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Added on 2020-06-04
Analytical Thinking & the Decision Making Process
Added on 2020-06-04
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ANALYTICAL THINKING AND DECISIONMAKINGTABLE OF CONTENTSINTRODUCTION...........................................................................................................................3QUESTION 1..................................................................................................................................3Importance of decision-making and application of decision analysis.........................................3QUESTION 2..................................................................................................................................6Decision problem with multiple objectives.................................................................................6QUESTION 3..................................................................................................................................7Simple Multi-Attribute Rating Technique...................................................................................7QUESTION 4................................................................................................................................15
Strength and limitations of the analysis in respect to decision making problem.......................15CONCLUSION..............................................................................................................................16REFERENCES..............................................................................................................................18
INTRODUCTION In today’s time of extreme uncertainty in the market, in order to remain competitivelystrong, companies are requires to make multitude of decisions and overcome challenges. Thereare different complexities with distinctive option and selecting the most preferable one among allis a challenging task. In the real world, various techniques are being applied by theestablishments to come to a final decision and stay in the competitive market. The aim of thecurrent research is to investigate the problem of supplier selection and select the mostappropriate raw material supplier from the given set of options via the application of decision-solving techniques. Here, simple multi-attribute rating technique (SMART) is applied that is asimple technique to facilitate decision-makers to resolve judgemental difficulties in selecting thebest outcome from the numerous options available. The method uses linear value functions andapproximation to estimate weights. QUESTION 1Importance of decision-making and application of decision analysisIn the competitive arena, business faces different kind of issues and managers anddecision makers are highly concerned about selecting the most appropriate solution of variousissues for progressive results. Decision-making is a vital and important part of business world. Itis not only important for the large and big sized companies but also gains equal importance forthe small sized entities that are responsible for the final or ultimate outcome of the decisionsmade (Bondigas, 2015). Every decision depends upon forming a judgement which is subjected tonumerous factors that may influence the final outcome. It is the responsibility of decision-makersand policy-makers to identify clearly all those variables and form opinion and judgements in thebest of their ability & comprehension. The process of recognising such factors and applying andutilizing knowledge to the gathered information to analyze things for choosing the best solutionof the problem is called decision-making. In other words, the procedure of choosing the formalchoice among given options is known as decision-making. It consists of variety of sequentialstages such as problem defining, clarifying objectives, identifying alternatives, examineconsequences and choosing the right solution finally.
Figure 1 Decision making process(Gentry, Halevi and Smart, 2012)It is so critical and based on the organizational performance. The final judgement of thedecision makers can influence entity differently ranging from the commitment to the strategyimplementation, prioritization, resource allocation and others. Thus, it can be said that everydecisions affects each and every aspect of the enterprises. In the uncertain world, unexpected and sudden changes that take place in the marketbring necessity for the entity to critically examine various options available and choose the bestone. Risk, uncertainty, multiple objectives, multiple stakeholders, complex structure and otherscreate complexities for the decision-makers (O'Connor, Sexton. and Smart, R.S. 2013). It makesdecision complex because future is not certain as it is subjected to uncertainty and volatility.Unpredictable and sudden changes make problem complicated as a result, decision makers sufferissues in selecting the best outcome. It is important for the policy makers to consider all thefactors and variables and apply their knowledge and experience to examine multiple course ofactions and select the most effective solution. It seems too important for the business regardlesstheir sizes and geographical presence to make good quality decisions. The process of decision-making enables decision makers to utilize the available resources in the best way and achieve thesolution appropriately. Perfect and right solution assist entity to get success, however,inappropriate and poor decision may lead to failure. Considering the current market era, due to volatile market and sudden changes, decision-makers feel overwhelmed and face difficulty in comprehending with the complexities associated.Human mind has limited capacity to process information and analyse things; however, at givencomplexity level and diversity, executives and managers try to simplify the problem forappropriate management (Gentry, Halevi and Smart, 2012). Such simplifications tend to increaseinconsistencies and biasness within the decision-making process. In order to resolve complexproblems, various decision analysis techniques are applied by the managers. The methods of
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