Scribd
Upload
5 views

Engineering Management

Uploaded by

Dann Ildefonso
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
5 views

Engineering Management

Uploaded by

Dann Ildefonso
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 11

DECISION MAKING

CHAPTER 2
DECISION MAKING AS A MANAGEMENT
RESPONSIBILITY
• Decision making is a responsibility of the engineer manager. It is
understandable for managers to make wrong decisions at times. The wise
manager will correct them as soon as they identified. The bigger issue is the
manager who cannot or do not want to make decisions
• Management must strive to choose a decisions option as correctly a
possible. Since they have that power, they are responsible for whatever
outcome their decisions bring. The higher the management level is, the
bigger and the more complicated decision making become.
WHAT IS DECISION MAKING?

• Decision making may be defined as “ the process of identifying and choosing


alternative courses of action in a manner appropriate to the demands of the
situation”
• Decisions are made at various management levels and at various
management functions.
• Decision making, according to William G. Nickels and others, “ Is the heart of
all the management functions”
THE DECISION MAKING PROCESS

Rational decision making, according to David H. Holt, is a process involving the


following steps:
• Diagnose Problem
-If the manager wants to make an intelligent decision , his first move must be
to identify the problem.
• Analyze the Environment
- The objective of environmental analysis is the identification of constraints,
which may be spelled out as either internal or external limitations.
- Examples of internal limitations are as follows
- 1. Limited funds available for the purchase of equipment.
2. Limited training on the part of employees.
3. Ill designed facilities.

Examples of external limitations are as follows


1. Patent are controlled by other organizations.
2. A very limited market for the company’s
3. Strict enforcement of local zoning regulations.

• The environment consists of two major concerns


1. Internal environment
a. Organizational Aspects
b. Marketing Aspects
c. Personnel Aspects
d. Production Aspects
e. Financial Aspects
2. External environment
a. Government
b. Labor Unions
c. Suppliers
d. Banks
e. Public
f. Competitors
g. Clients
h. Engineers

• Articulate Problem
- Discuss the problem with the member of the organizations and
gather data and information for future references.
• Develop Viable alternatives
- This is made possible by using a procedeure with the following steps:
1. Prepare a list of alternative solutions.
2. Determine the viability of solution.
3. Revise the list by striking out those which are not viable.

• Evaluate Alternatives
- Proper evaluation makes choosing the right solution less difficult.
- Each alternative must be analyzed and evaluated in terms of its value,
cost, and risk characteristics
- The value of the alternatives refers to the benefits that can be expected.

• Make a Choice
- This is the point that the decision aker must be convinced that all the
previous steps were correctly undertaken.
- Choice making refers to the process of selecting among alternatives
representing potential solutions to a problem.
- “ Particular effort should be mad to identify all significant consequences of
each choice”
• Implement Decision
- Implementation refers to carrying out the decision so
that the objectives sought will be achieved.
- At this stage, the resources must be made available so
that the decision may be properly implemented.
- “ those who will be involved in implementation must
understand and accept the solution”.

• Evaluate and Adapt Decision Results


- Feedback
- Control
- If the desired result is achieved, one may assume that
the decision made was good. If it was not achieved,
O.C. Ferrel and Geofrey Hirt suggests that further
analysis is necessary.
APPROACHES IN SOLVING PROBLEMS

• Approaches:
• Qualitative evaluation
Qualitative approach when:
a. The problem is fairly simple.
b. The problem is familiar.
c. The costs involved are not great
d. Immediate decisions are needed.
• Quantitative evaluation
- refers to the evaluation of alternatives using any technique in a group classified as rational and
analytical.
QUANTITATIVE MODELS FOR DECISION
MAKING
• The types of quantitative techniques which may be useful in decision-making are as follows:
• Inventory Models
1. Economic order quantity model
2. Production order quantity model
3. Back order inventory model
4. Quantity discount model
• Queuing theory
• Network models
• The Program Evaluation Review Technique (PERT)
QUANTITATIVE MODELS FOR DECISION
MAKING
• The types of quantitative techniques which may be useful in decision-making are as
follows:
• Network models
- The Critical Path Method (CPM)
• Forecasting
• Regression Analysis
• Simulation
• Linear Programming
• Sampling Theory
• Statistical Decision-Theory

You might also like