Decision Making

Learn about the tools and techniques used in decision making, such as regression analysis, linear programming, inventory model, transportation model, and more. Understand the importance of quantitative methods in decision making and how they can help businesses make informed decisions. Explore the application of these models in various industries. Improve your decision-making skills with Desklib.

DECISION MAKING
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Decision Making 1
Table of Contents
Abstract............................................................................................................................................2
Introduction......................................................................................................................................2
Regression analysis..........................................................................................................................4
Linear programming........................................................................................................................5
Inventory model...............................................................................................................................6
Transportation model.......................................................................................................................7
Distribution and location model......................................................................................................8
Application of network model.....................................................................................................8
Conclusion.......................................................................................................................................8

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Abstract
Nowadays, and running industry is imperative and compulsory decent abilities in making
accurate judgments. An incorrect superior therefore that is very critical for owners of the
business to be alert that can influence the business and accepting the encumbrance for every
judgment they make. Good skills are necessary to make the right decision in business.
Making a good decision is very important for owners of business by choosing the right
decision. There are many tools and techniques used by managers in business for making a
decision. They are charts, models, and graphs. Combination of these techniques used by
decision-makers to reach the final decision. In this research, quantitative model that is used by
the researcher for making a decision has been determined for reliable data into account.
Techniques and steps like production planning, inventory control, and
distribution planning are discussed. The mathematical models have been
pointed out with further research. The steps of every model are important in
industry for making a decision. Analysis of data result presents the
significance of applying the systems in command to protect the industry
from threat and gamble of damage.
Introduction
Decision-making involves detailed study and collection of data to determine or examine a
conclusion that is based on theories, materials, and facts. Decisions are made by methods like
measuring alternatives, gathering information and finding a conclusion. Systematically methods
help to make a decision more thoughtful and careful by defining alternatives and combining

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related information. These provide alternate solutions and increase the satisfaction of the result
(S. Camila. 2017).
The activities of managers are complex and difficult. This is necessary for a business to
make the choices carefully to escape chance of damages. Resources of the organization should
be used properly for avoiding the chances of losses whether the organization is a service
organization or manufacturing unit. Trial and error basis cannot be used in decision-making.
Decision-making is a crucial activity and strong approach should be used for making a decision.
Scientific methods increase the chances of good decisions. Most of the organization apply
quantitative techniques in managerial decision-making. This approach helps the organization to
answer the problems with economical methods, better accuracy, and efficient time.
Decisions of the managers are supported by data analysis. Planning, designing, collecting data,
and analyzing the information is the suitable procedures for analyzing the data. These help the
researcher to analyze, review and investigate. Characters, images, numbers, reasons, and
calculations collect these. The model of research to analyze the data has a specific role of
measurement and own purpose for clarifying the information. These models define the
mathematical solutions of a problem. These clarify the information in a better way. Following
are the model to track the further down stages: (Jay S. 2017)
Expressing the difficulty
Describing choice constraints and variables
Emerging an appropriate model
Obtaining the input facts

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Resolving the model
Certifying the model
Instigating the grades
These are the necessary stages of understanding problems and issues. Decision makers
identify the requirements for determination of the relationship between variables. Decision
variables help to progress the model. Decision makers develop an appropriate model in the
method of expressions. These made the model in a good manner to get accurate results. Models
enable good solutions with validation. After testing and validating, the model results are good by
application and implication in the organization. Specific of the applications models are
Sensitivity analysis, Integer programming, linear programming, Nonlinear programming,
Regression analysis, inventory management techniques, and network model has been covered in
the following discussion.
Regression analysis
Method of predictive modeling technique is regression analysis. On different scales, the
effects of two or more variables can be measured. This technique is used for finding the
influence, forecasting, and period series modeling of the association among the variables. For
sample, regulate the association between a total of accidents in addition to blast driving by a car
owner is the best studies through regression. These benefits help data technologists; marketplace
scholars to reduce the optimum set of variables for build projecting models. These methods used
to determining and examine the information. A number of statistical perceptions like hypothesis
testing, distributions, associations, possibility, and selection used in the analysis of technique
(Senith Mathew, 2007).

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This is investigated on the association between one or further (X) independent variables,
and (Y) dependent variable using a regression line. This can be presented by an equation that can
be used to expect the worth of objective variables based on the available forecaster variable(s).
The equation is Y=a+b*X_+e, for the intercept and b is a slope of the line and e for the error
term.
Dependent and independent variables relationship
Linear programming
Linear programming is a mathematical model method that is used to describe the finest
delivery of rare funds among challenging loads. The finest facility of occasional funds among
opposite loads is linear programming. Money and space, a period of time, machinery, and raw
materials are the resources of linear programming. This technique is dominant and useful for
applying to several different kinds of organization alarms like marketing, distribution, rummage
sale, producing, and finance. This involves linear constraints and linear objectives. For sample,
enhance the resources of the workforce will outcome in growth in output of effort (Natasha
Glydon, 2000).

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This is an exact method to clarify a difficult condition. It defines the resolution variables
with constraints set a neutral character. Following are the norms of linear software design model:
The association between choice variables must be linear.
Objective utilities are necessary for the model.
This should comprise resource constraints.
The non-negativity constraint should be kept in the exemplary.
Inventory model
Goods, the commodities, ordinary items are the resources of inventory for further
production in the organization at a lower cost. Model of inventory refers the raw material and
goods. Total investments in the organization are optimized by inventory. For running the
business smoothly there should be effective functioning of production activity. Holding the
required inventory provides many advantages for functioning the organization. The stock of the
organization is important for the manufacturing organization. Inventory model helps the
organization to control the expected cost that is the part of the entire production cost (Shannon,
R. I. 2007).
Inventory model of the organization has control over the expected cost. Cost of inventory
is the major part of the entire production cost. Inventory model has control from the stage of
buying to supply the finish goods to consumers with great quality at effective time. This avoids
the risk of losses. The realistic stock of material reduces the cost of buying and increase the stock
of material for the process of production. It helps the organization to avoid loss of sales, reduce

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the cost of the order, and achieve efficient running of production. Following are the steps of the
inventory model.
The procedure for buying of resources
Inventory keeping process
The procedure of issue of resources
Transportation model
This is an exceptional kind of linear programming. Transportation model is related to the
daily activities of a business. This method helps to solve the problems of distribution and
transporting the materials from an apartment to different endpoints. The requested material is
transported from the factories and warehouses to meet the request. The main objective of
supplies the good is to reduce the cost of transportation of the product and meet the demanded
numbers. Transportation model helps to select the best way to distribute products. This is
completed by knowing the numbers of demands and existing supplies quantities. Destination and
location must be known for transporting the required goods.
This method is used for scheduling the strategic choices. This method is used for
choosing the best method of transportation. Many organizations use a model of transportation in
deciding the location. For sample, the fresh site of an aptitude, plant manufacturing, of the
location of the new workplace when many choices are registered for consideration. This plays an
important part in supply chain management and logistics by improving services. This develops a
plan that comes up with the minimization of cost to determine the cost to ship from several
sources to several destinations. This model provides the best assumptions for transporting the

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material. The total cost of transportation related to the shipping of material or distributing the
good is minimized by the use of this model.
Distribution and location model
This phase comprises planning, scheduling with using limited resources like time, cash,
materials, mechanism. Examples of the schemes that using this model are aircraft, ships, and a
highway plan, construction plans, and development projects. Manager of the organization should
have a strong scheme of scheduling, and dynamic of preparation to get the best results with
(Chung, K.H 2011). The managers in handling the projects assist these models. Project
management and model of the network involves three stages:
The planning that includes the setup of scheme objects.
Scheduling the actions of plan that is based on phase for each action. This consist of a time of
start and time of finish of each activity for operating as per the approach.
Analyze the progress against the plan and control. (Analysis of the scheme by weekly reports,
restructuring the resources)
Application of network model
Activities should not be repeated more than one time in a system. The event of the
organization should be started with the number one and should be ended with the highest
number. There should be a logical structure between the actions in direction to complete the link
correctly. The significant step in network that it should have only one start event and one end
event.

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Conclusion
Quantitative methods are the logical way for the executive approach of decision-making.
This approach is started with the data. There are many methodical techniques to answer the
disquiets of the organization and these methods support the manager to make the clarity and
choose the right decisions by studies, data, and facts. There should be a proper plan to
understand and apply techniques. Accurate information is provided by methods of quantitative
and qualitative. These help to understand the altered models of data analyzing. The second
method is to understand and plan the best technique to apply it.
After elaborated the techniques of decision making the recommended technique are linear
programming for business. This technique helps directors to find the best clarification for
financial decision and supports to select the ranges. This technique processes the operations of
the organization as it includes situations of business or constraints of the organization and gives
the best results to make the right decision. This technique helps to generate more profits and
decrease cost. This technique is used in processes and operations to make the right decision. This
technique protects the business from losses to get systematic real facts and data.