logo

[PDF] Decision support systems and tools

   

Added on  2021-05-30

16 Pages2680 Words134 Views
Running head: DECISION SUPPORT TOOLSDECISION SUPPORT TOOLSName of StudentName of UniversityAuthor Note
[PDF] Decision support systems and tools_1
DECISION SUPPORT TOOLS1Table of ContentsQuestion 1: Decision Analysis.........................................................................................................2Question 2: Value of Information....................................................................................................6Question 3: Simulation....................................................................................................................7Question 4: Regression Analysis...................................................................................................10Question 5: CVP Analysis.............................................................................................................12
[PDF] Decision support systems and tools_2
DECISION SUPPORT TOOLS2Question 1: Decision Analysisa)The five steps in a decision making process involve, identifying the kind of decision that is to be made and the end goals that the decision maker wishes to achieve. Consequently, it is required to identify the relevant information, collecting the necessary data and hence identify the alternative course of actions available to the decision maker. Upon identifying the options available to act upon, it is required to consider the consequences of each action in terms of the loss or gain that might be experience upon carrying them through. Then in light of those consequences the actions are prioritised or ranked and the action coming out on top is consideredthe best choice. The final step is to validate and verify whether the action meets the goals that have been set at the beginning by the decision maker and if it does not the entire process is repeated till an action is identified which meets all the requirements. b)Alternatives are course(s) of action(s) which the decision maker could opt to suggest or agree upon as the appropriate solution to the decision making problem. An alternative is associated with certain risks or consequences which the decision maker is required to gauge and based on the severity of loss or gain associated with the action, the decision maker decides upon the best course of action keeping in mind the end goals and constraints of the problem. For example, consider the problem of a candy maker deciding upon how many units of the candy A he makes, he should produce in a month during winter. Then given his limitations in terms of resources and with the goal to maximize profits, each different consideration of the number of units is an alternative, which could be greater than say 10,000 units per month or between 10,000to 20,000 units.
[PDF] Decision support systems and tools_3
DECISION SUPPORT TOOLS3States of nature are the possible consequences that could be faced in response to the alternative actions being taken into consideration. These are beyond the control of the decision maker. Relating to decision problem mentioned above, the possible states of nature would be the profits or loss that would be experienced by the vendor as consequence to the alternative actions being considered.c)1.Given that cost price (C.P.) of fish is $15 per kg, selling price (S.P.) is $30 per kg and also given that the vendor sells whatever fish is leftover for the day at $10 per kg(P.L.) to the local proprietor, the profit is then computed using:Profit=(Weightbought−WeightSold)×P.L.+Weightsold×S.P.−Weightbought×C.P.The following table gives the conditional profits for each combination of alternative and state of nature:AlternativesItems Sold\Items Bought1015202520StatesofNature10 $ 150.00 $ 75.00 $ - $ -75.00 $ - 15 $ 350.00 $ 225.00 $ 150.00 $ 75.00 $ 150.00 20 $ 550.00 $ 425.00 $ 300.00 $ 225.00 $ 300.00 25 $ 750.00 $ 625.00 $ 500.00 $ 375.00 $ 500.00 20 $ 550.00 $ 425.00 $ 300.00 $ 225.00 $ 300.00 Table 12.OPTIMIST APPROACHAlternativesItems Sold\Items Bought1015202520StatesofNature10 $ 150.00 $ 75.00 $ - $ -75.00 $ - 15 $ 350.00 $ 225.00 $ 150.00 $ 75.00 $ 150.00 20 $ 550.00 $ 425.00 $ 300.00 $ 225.00 $ 300.00 25 $ 750.00 $ 625.00 $ 500.00 $ 375.00 $ 500.00 20 $ 550.00 $ 425.00 $ 300.00 $ 225.00 $ 300.00 Maximum $ 750.00 $ 625.00 $ 500.00 $ 375.00 $ 500.00
[PDF] Decision support systems and tools_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Answers to Questions Tagged with Decision Making Processes
|14
|2833
|367

Accounting Decision Support Tools
|14
|1156
|37

Student Name:. Student ID:. 9. Problem Analysis in Stat
|29
|2341
|5

Accounting Decision Support Tools - Assignment
|17
|1899
|17

Accounting Decision Support Tools pdf
|13
|1003
|82

Workforce Development & Engagement
|5
|793
|28