Managerial

Decision Making

1 Managerial Decision Making

DECISION MAKING
Objectives: At the conclusion of this section, participants will be able
to:
 List the eight steps in the decision-making process
 Use the worksheet for making decisions
 Define at least five key terms related to why person can not take
a decision
 List at least five suggestions from good decision-making
 Use the Vroom – Yetton- Jago model
 Quantitative Management , models for making managerial
decisions
 Management Information Systems
 Things to Remember in Decision Making
2 Managerial Decision Making
 Problem-Solving
and Decision-Making
Definitions
Key Definitions
 Decision-Making:
A choice of best alternative
 Problem:
A conflict within a situation
 Critical Factors:
What must be changed before anything else

3 Managerial Decision Making

 Problem-Solving
and Decision-Making
Definitions
Key Definitions
 Prejudice:
A pre-conceived opinion without sufficient
knowledge
 Bias:
A tendency towards one side of an issue
 Emotion:
A strong feeling which can affect our perception
4 Managerial Decision Making
 Sources of D.M.
Facts
Facts &
&
Experience
Experience
Information
Information

Authority
Authority

Research
Research &
&
Analysis
Analysis
Experiments
Experiments

5 Managerial Decision Making

What Is The
Decision?
An effective path chosen by
the concerned person as the
best possible alternative to
achieve the targets to solve
the problem
6 Managerial Decision Making
 DECISION MAKING
PROCESS
1. Recognize and
Analyze the Problem

 How to identify the problem?

 How does problem start for You?
 What order should you follow in problem-analysis?
 Symptoms
 Causes & Root Causes

7 Managerial Decision Making

 DECISION MAKING
PROCESS
1. Recognize and
Analyze the Problem

2. Determine Workable
Solutions

 What are the alternatives?

 Brainstorm.
 There are more than one solution.

8 Managerial Decision Making

 DECISION MAKING
PROCESS
5. Calculate Risks and
1. Recognize and Estimate The Value
Analyze the Problem Of Each Solution

2. Determine Workable
Solutions
Advantages
3. Identify Key Disadvantages
Uncertainties Uncertainties
Risks
Timing
4. Gather Data

9 Managerial Decision Making

 DECISION MAKING
PROCESS
5. Calculate Risks and
1. Recognize and Estimate The Value
Analyze the Problem Of Each Solution

2. Determine Workable
6. Choose a Solution
Solutions

3. Identify Key Make a Choice.

Uncertainties Factors within the decision
maker:
4. Gather Data Judgment, Expertise
Discipline, Timing
Self-confidence, Knowledge
10 Managerial Decision Making
 DECISION MAKING
PROCESS
5. Calculate Risks and
1. Recognize and Estimate The Value
Analyze the Problem Of Each Solution

2. Determine Workable
6. Choose a Solution
Solutions

3. Identify Key
7. Take Action
Uncertainties

8. Follow-up
4. Gather Data
On Decision

11 Managerial Decision Making

 DECISION MAKING
Worksheet
• Must a decision be made? Why?
• What are the consequences of not doing?
• What will exist after the decision is made?
• What are my alternatives?
• What is my best choice?
• Forces helping & opposing
• My time table
12 Managerial Decision Making
 DECISION MAKING
Worksheet
Consequences Options
1. 2. 3…. 1.
1. 2. 3…. 2.
1. 2. 3…. 3.
1. 2. 3…. 4.

13 Managerial Decision Making

 DECISION MAKING
Worksheet

Degree Of Reason Number

Risk

14 Managerial Decision Making

 DECISION MAKING
Worksheet
Follow Up Standard Action step Date

15 Managerial Decision Making

 Dimension of Creative
Problem Solving
The dimensions of group problem-solving can be
thought of in terms of the ancient Chinese concept of
“Ying and Yang”
• The Left Brain • The Right Brain
Approach to Problem Approach to Problem
Solving is: Solving is:
– Analytical – Creative
– Methodical – Unstructured
– Rational – Intuitive
– Quantitative – Spatial
– Logical – Experimental

16 Managerial Decision Making

 BRAINSTORM CURRENT
CONDITIONS
Brainstorming may be used to list the
conditions known to the team
• Structured Brainstorming
• Freeform Brainstorming
• Other Methods

17 Managerial Decision Making

 BRAINSTORM CURRENT
CONDITIONS
• Structured Brainstorming:
– Go around the team, putting forth an idea
or say pass till a complete round of passes
– Advantage of equal chance, disadvantage is
that it can be stiff and nonspontaneous

18 Managerial Decision Making

 BRAINSTORM CURRENT
CONDITIONS
• Freeform Brainstorming:
– Throw out ideas as fast as they can think
– Advantages of it spontaneity, disadvantage
is that less assertive

19 Managerial Decision Making

 BRAINSTORM CURRENT
CONDITIONS
• Other Methods:
– Write down all ideas and throw them into a
box
– Knowledgeable people discuss the issue and
create a list of ideas based on their insights

20 Managerial Decision Making

 The Personal Side of
Decision Making
Many individuals can learn the steps
involved in making a decision. They know
the procedure! However, they may make a
bad decision, no decision, easy decision,
popular decision.
WHY?

21 Managerial Decision Making

 The Personal Side of
Decision Making
Lack of:
 The courage to face what is right.
 The knowledge base needed for the decision.
 The intelligence, experience, authority to
make decisions.
 Delegation when it would be possible.

22 Managerial Decision Making

 The Personal Side of
Decision Making
Personal factors:
 Some don’t know or won’t admit what they really want (their
objectives).
 over- reliance on logic, math, rationalization, facts, and minimize
or even ignore judgment, “gut feeling,” common sense.
 General hostility, Negativism about life and work, Poor
motivation.
 Egoism, Bias and prejudice regarding individuals or groups.

23 Managerial Decision Making

 The Personal Side of
Decision Making
Other personal factors:
 They feel there is not enough time to gather all the information
they need.
 It is easy to stay in the same course: It’s less time consuming, It
contains fewer apparent risks, requires no changes.
 The individual’s (value system, role perception, What the
individual thinks others expect of them).
 Poor habits (Procrastination, Sloppiness in attention to detail,
Over attention to minor details).
 They have poor self-concept.
24 Managerial Decision Making
 Two Faces Of The
Coin
The ability to
make a decision

Feelings Facts

The desire for

making a
decision
Balanced
25
Decision
Managerial Decision Making
 Exercise
(Z – Model)

26 Managerial Decision Making

 Problem Solving
Model
Sensing
facts
iNtuition
possibilities
details options
 Identify and clarify the  Intuit what caused the problem
problem  Generate alternative approaches
 Gather relevant data  Look for patterns that relate this problem
 Be realistic about facts to others

logic
Cause/ effect
Thinking Feeling feelings
values
 Weigh practicality of each  Determine “fit” with personal and/or
alternative organizational values
 Examine consequences of  Assess effects on self and relationships
actions  Determine how to win self and others to
 Weigh gains /losses solution
Decide on course of actions.
Act on it.
Evaluate the process.

27 Managerial Decision Making

 Exercise
App.

28 Managerial Decision Making

 Decision-Making
Grid
‫درجة االهتمام بانتماء المجموعة‬

1/9
9 9/9
Good Neighbor
8 Eye-to-Eye Decision
Concern for Commitment

Decision Making Making

7
6
5/5
5 Traditional Decision
4 Making
3
1/1 9/1
2 Fault Decision Self-Sufficient
1 Making Decision Making
1 2 3 4 5 6 7 8 9
‫درجة االهتمام بسالمة و جودة القرار‬
Concern for Decision Adequacy
29 Managerial Decision Making
 1/9
Good Neighbor Decision-Making

The important thing is for members to

support the group position. The task
should not be allowed to destroy the
group; because without cooperation,
there would be no group to work on
problems.

30 Managerial Decision Making

 9/9
Eye-to-Eye Decision -Making

Involvement of all group members

in the decision results in both
maximum support and a higher
quality decision through an
increase in resources.

31 Managerial Decision Making

 5/5
Traditional Decision-Making

People must realize they have to give

a little and take a little to get a job
done. Push for the best decision, but
make sure there is enough agreement
to get a decision and to insure
implementation

32 Managerial Decision Making

 1/1
Fault Decision-Making

Disagreement and emotional

thinking go hand-in-hand with group
situation. It is better to rely on
precedent or experts outside the
group, and not feed the conflict. Just
go along and “mark time” until the
group sees the light.
33 Managerial Decision Making
 9/1
Self-Sufficient Decision-Making

Group-centered section is a bid for

mediocrity. The quality of decisions
comes first, and the demands of the
group detour decisive thought to
irrelevant issues.

34 Managerial Decision Making

 The Vroom- Yetton- Jago
Model
• The Vroom - Yetton - Jago model provides
guidelines on the extent to which
subordinates are involved in decision making.
• The Model identifies five different styles
(ranging from autocratic to consultative to
group-based decisions) on the situation &
level of involvement.
• The assistance of subordinates may occur at
any of the decision making steps. Vroom-Yetton, 1973
Vroom-Yetton-Jago, 1988
35 Managerial Decision Making
 The Vroom- Yetton- Jago
Model
• The extent of subordinates involvement is
based on:
– The situation.
– The quality of information available to the
decision maker.
– The importance of subordinates acceptance of the
decision.
– The time allowed to make the decision.

36 Managerial Decision Making

 The Vroom- Yetton- Jago
Model
• Autocratic: decision maker makes the
decision and informs others of it.
• Consultative: decision maker gathers
information from the team and others and
then makes the decision.
• Collaborative: decision maker and team work
together to reach a consensus.

37 Managerial Decision Making

 The Vroom- Yetton- Jago
Model
A1 You take the decision alone with the information you have
at hand.
A2 You take the decision alone with additional information
you obtained from the team.
C1 You ask team members individually for input and opinions
on the issue. You decide alone.
C2 You ask team members collectively for input and
opinions on the issue. You decide alone.
G2 You and the group meet to decide. The group decides and
you may not overrule that decision.
38 Managerial Decision Making
 Decision Tree Governing
Group Problems
1- Is the quality of the
decision important? Y N

2- Is team commitment
Y N Y N
important to the decision?
A1
3- Do you have enough
information to make the Y N Y N
decision on your own? A1
4- Is the problem Y N Y N
well-structured? C2
5- If you made the decision yourself, Y N Y N Y N Y N
would the team support it ? A2
C2 A1 G2
6- Does the team share Y N Y N Y N Y N Y N
organizational goals? C2 G2 C2 A2
G2 C2 A2
7- Is conflict amongst the team
Y N Y N Y N
over the decision likely?
C1 A2 G2 C2 C1 A2
39 Managerial Decision Making
 Exercise
(Factory)

40 Managerial Decision Making

 QUANTITATIVE
MANAGEMENT
• At the completion of this section, the participants
will be able to use the following techniques
(models) for making managerial decisions:
– Break-even analysis
– Time value of money
– Net present value
– Decision tree models
– Ranking & Weights method
– Even Swap method
• Management Information Systems

41 Managerial Decision Making

 QUANTITATIVE
MANAGEMENT
What are the costs related
to the abandoning of this
project?
How much must
Are some sources of we spend?
capital better than
others for this project? When will we get back

?
what we spent?
Is this the
right time? How much
will we make?
Are we better off
doing nothing?
Is it worth spending “X”
What are the risks? amount of money for
Short term? the expected returns?
Long term?
What else can we do
Is this project a with money we
sure thing? intend to spend?
42 Managerial Decision Making
 Break-even
analysis
This technique is used to determine how many units of
the product or service must be sold,
and at what price for the producer or service provider to
at least break-even.
 The Formula:

(FC)
BEP (units) = ---------------
(SP) – (VC)

FC =Total Fixed Costs

SP = Selling Price Per Unit

VC =Variable Cost Per Unit

43 Managerial Decision Making

Break-even analysis
• Example:
– Suppose that
• The fixed cost of a project (FC) = 30,000 L.E.
• The variable cost per unit (VC) = 500 L.E.
• The selling price per unit (SP) = 1000 L.E.
– Determine the number of units at BEP.
– BEP(units)= 30000/(1000-500)=60units

44 Managerial Decision Making

Break-even analysis
Revenue& Cost
Thousands L.E.
100 TR
90
80 BEP TC
70
60
50 VC
40
30 FC
20
10
0 Units
0 10 20 30 40 50 60 70 80 90 100

45 Managerial Decision Making

 Present Value
(PV)
The simplest formula used is:
FV
PV = ------------
[1 + (i )]T
FV = Future Value
PV = Present Value
i = Interest Rate
T = Number of time periods

46 Managerial Decision Making

 Present Value
(PV) Expected
Receipts
The Present wealth at finance
cost of 10% will be as follows:
Business Year (Million L.E) (Million L.E)

• Suppose a 1 3 2.73
business makes 2 4 3.31
an estimate of 3 5 3.76
the amount of
4 3 2.05
money it would
receive as the 5 2 1.24
result of an T= 17 T= 13.09
investment.

47 Managerial Decision Making

 Present Value
Purchasing
(PV) Offer 1 Offer 2
Payments Payments
Exercise Year (Thousand L.E) (Thousand L.E)
• You have 0 42 25
decided to by a 1 20 24
new car, and 2 20 24
you have got 2
3 20 24
offers.
4 20 24
• What is the
lowest car? 5 20 24
T= 142 T= 145

48 Managerial Decision Making

 Net Present Value
(NPV)
• It is the difference between the present value of
cash inflows and the present value of cash outflows.
– It is used in capital budgeting to analyze the profitability
of an investment or project.
– It can be calculated by discounting all cash flow back to
year 0 (now)
• Parameters that affect the decision making:
– If NPV= positive +, (Benefit or EVA) Economic Value
Added
– If NPV= negative -, (Cost)

49 Managerial Decision Making

 Net Present Value
(NPV)
• Suppose a business makes an estimate of the
amount of money it would be received as the
result of an investment as follows: 1000
3000
5000
5000
2000
0
Time
1 2 3 4 5 Years
(12000)
• Let us analyze the profitability of an investment or
project (Suppose the interest rate of the cost of the
capital (the finance cost) = 10%)
50 Managerial Decision Making
 Net Present Value
(NPV)
621 1000
2049 3000
PV 3755 5000
12373 Inflow in L.E.
4130 5000
2000 Long-term return
1818
0 Time
1 2 3 4 5 Years
Overflow in L.E.
PV (12000) (Original Investment)

NPV= 12373 - 12000 = + 373

51 Managerial Decision Making

 Net Present Value
(NPV)
7451 12000
683 1000
PV 751 1000
10621 Inflow in L.E.
827 1000
1000 Long-term return
909
0 Time
1 2 3 4 5 Years
Overflow in L.E.
PV (12000) (Original Investment)

NPV= 10621 - 12000 = - 1379

52 Managerial Decision Making

 Internal Rate of
Return
• Under the internal rate of return method, the
object is to discover the rate of interest at
which the present value of all the cash inflow
will equal the original investment (overflow)
• Thus,
– PV of Inflow = PV of Overflow
– NPV = Zero

53 Managerial Decision Making

 DECISION TREE
• It illustrates the logical sequence of alternatives
and decisions involved in a problem.
• It shows the interplay between a present
decision, and possible future decisions and their
consequences.
• Graphically, the decision maker is able to see
the sequence of decisions, events, and their
consequences.

54 Managerial Decision Making

 DECISION TREE
Build
Build
Sell small Delay
Sellsmall Delay Produceatat
Produce
plant and action
plantand action No
No No Produce
Produce capacityfor
for
another
another No capacity
build
buildlarge
large further
further further below
below inventory
small
small further inventory
plant
plant action
action action capacity
capacity Wait
Wait
plant
plant action

High LowDemand
Low Demand
HighDemand
Demand
Low
LowDemand
Demand HighDemand
High Demand

Build a Build a
small plant large plant
How much will demand increase.
This is an area of uncertainty.
Action There is some chance the increase
in demand could be high and
some chance it could be low.
55 Managerial Decision Making
 DECISION TREE
Example:
• You are a restaurant owner and are trying to decide which of
the following two properties to lease:
– Property A allows seating of 100 customers per meal and costs 1800
L.E. per month to lease.
– Property B seats 150 and leases at 2700 L.E. per month.
• The estimates for three levels of seating are: high (150 people),
medium (100 people), and low (75 people).
• Estimate the relative probabilities for the three levels.
• Also, assume that each seat will generate revenues of 10 L.E.
per night above all other costs.
MANAGEMENT Responsibility for Performance,
Peter Hess and Julie Siciliano, Copyright 1996.
56 Managerial Decision Making
 DECISION TREE
Action Decision Estimat Probability Consequences
e
H 150 0 % 30x10x150x0.00= 00.00
Property
M 100 70 % 30x10x100x0.70=21000
A
L 75 30 % 30x10x 75x0.30= 6750
--------
TR 27750
Action Less leas- 1800
--------
NR 25950
Property H 150 20 % 30x10x150x0.20= 9000
B M 100 50 % 30x10x100x0.50= 15000
L 75 30 %30x10x 75x0.30= 6750
--------
TR 30750
Less leas - 2700
--------
NR 28050

57 Managerial Decision Making

 ‫‪Ranking &Weights Method‬‬
‫الحذف بأسلوب الترتيب‬
‫واألوزان‬
‫يعتمد هذا األسلوب على اآلتي‪:‬‬
‫وضع قائمة باالهتمامات أو األهداف وما يقابلها ‪1 -‬‬
‫‪.‬من اختيارات أو بدائل‬
‫ترتيب هذه األهداف واالختيارات ‪2 -‬‬
‫‪.‬وفقا لمميزاتها‬
‫حذف االختيارات أو البدائل التي يتضح ‪3 -‬‬
‫‪.‬عدم تميزها‬
‫بتقدير وزن لكل اهتمام يمكن الوصول – ‪4‬‬
‫‪.‬حسابيا ألنسب االختيارات‬
‫‪58‬‬ ‫‪December 31, 2024‬‬
 Ranking &Weights Method
STEP (1): Draw a “Consequences Table”
STEP (2): Trade offs: If you can’t have it all
Example:
Objectives Job A Job B Job C Job D Job E
Monthly Salary
2000 LE 2400 LE 1800 LE 1900 LE 2200 LE
3 1 5 4 2
Flexibility of Moderate
Moderate Low High None
work schedule 2(tie) 4 1 2(tie) 5
Time management+
Business skill Computer Manage people+ Operation +
Organization Multi-tasking
development 4 1 Computer 3 Computer 5 2
Annual 12
Vacation days 1(tie) 14 3(tie) 5 10 1(tie)
14
3(tie) 12
Health, Dental, Health, Dental. Health, Health, Dental.
Benefits
1 Retirement 2(tie) 5 Health, 4 Retirement 2(tie)

Enjoyment Great Good Accepted Great Boring

1(tie) 3 4 1(tie) 5

59 Managerial Decision Making

 Ranking &Weights Method
STEP (3): Weights of Alternatives

Example: Ranking Table

Objectives Job A Job B Job C
2000 LE 2400 LE 1800 LE
Monthly Salary 3 1 5
=33 =100 =0
Flexibility of Moderate Low High
work schedule 2(tie) =60 4 =0 1 =100
Business skill Computer Manage people+ Operation+
development 4 =0 1 Computer =100 3 Computer =80
Annual Vacation 14 12 10
days 1(tie) 3(tie) 5
=100 =50 =0
Health, Dental, Health, Dental Heath.
Benefits 1 Retirement =100 2(tie) =10 5 =0
Great Good Accepted
Enjoyment 1(tie) 3 4
=100 =10 =0

60 Managerial Decision Making

 Ranking &Weights Method
STEP (4): Weights for Interests (Objectives)

Example:Weighting the Interests

Objectives Rank Rating Weight
Monthly Salary
2 90 0.25

Flexibility of work 1 100 0.28

schedule
Business skill 4 50 0.14
development
Annual Vacation 6 20 0.06
days
Benefits 3 70 0.19

Enjoyment 5 30 0.08
Sum 360 1.0
61 Managerial Decision Making
 Ranking &Weights Method
STEP (5): Swing Weights

Example: Ranking Table

Objectives Job A Job B Job C

Monthly Salary (0.25) 33 = 8.25 (0.25) 100 = 25 (0.25) 0 = 0

Flexibility of work
(0.28) 60 = 16.8 (0.28) 0 = 0 (0.28) 100 = 28
schedule
Business skill
(0.14) 0 = 0 (0.14) 100 = 14 (0.14) 80 = 11.2
development
Annual Vacation
(0.06) 100 = 6 (0.06) 50 = 3 (0.06) 0 = 0
days

Benefits (0.19) 100 = 19 (0.19) 10 = 1.9 (0.19) 0 = 0

Enjoyment (0.08) 100 = 8 (0.08) 10 = 0.8 (0.08) 0 = 0

Sum 58.05 44.7 39.2

62 Managerial Decision Making

 ‫‪Even Swap Method‬‬
‫الحذف المتساوي‬
‫لالهتمامات •‬
‫عتمد هذا األسلوب على اآلتي‬
‫وضع قائمة باالهتمامات أو األهداف وما يقابلها من ‪1 -‬‬
‫هذهأو بدائل‬
‫األهداف واالختيارات وفقا ‪2 -‬‬ ‫‪.‬اختيارات‬
‫ترتيب‬
‫‪.‬لمميزاتها‬
‫االختيارات أو البدائل التي يتضح عدم ‪3 -‬‬ ‫حذف‬
‫عمل تعديل تقديري في قيمة أحد االهتمامات – ‪4‬‬ ‫‪.‬تميزها‬
‫يتم‬
‫في البدائل المختلفة للوصول باهتمام آخر إلى قيم‬
‫‪.‬متساوية‬
‫حذف االهتمام المتساوي – ‪5‬‬ ‫يتم‬
‫القيمة‬
‫الخطوتين (‪ )4,5‬حتى نصل إلى اهتمام – ‪6‬‬ ‫‪.‬فيتكرار‬
‫يتم‬
‫‪.‬وحيد يمكن المقارنة عليه للوصول ألنسب البدائل‬
‫‪63‬‬ ‫‪December 31, 2024‬‬
 Even Swap Method
STEP (1): Draw a “Consequences Table”
• A consequences table summarizes all consequences
Example: Consequences Table
Objectives Car A Car B Car C Car D

Price 35000 LE 30000 LE 40000 LE 35000 LE

Capacity 1300 1000 1100 1100
(C.C.)
Air N.A. N.A. Available N.A.
Condition
Radio ------ Radio + central Radio
Facilities Lock + Driving Bag

Kilometers 50000 30000 80000 60000

Model 2000 1998 1997 1995

64 Managerial Decision Making

 Even Swap Method
STEP (2):

Weight of Alternatives
Objectives Car A Car B Car C Car D

Price 2 1 4 2
Capacity
(C.C.) 1 4 2 2
Air
2 2 1 2
Condition
Facilities 2 4 1 2

Kilometers 2 1 4 3

Model 1 2 3 4

65 Managerial Decision Making

 Even Swap Method
STEP (3):

Swap
Objectives Car A Car B Car C
Price 35000 30000 40000
35700 31000 40000
Capacity
(C.C.)
Air
Condition
Radio ----- All
Facilities
All All All
Kilometers

Model

66 Managerial Decision Making

 Even Swap Method
STEP (4):

Swap
Objectives Car A Car B Car C
Price 35700 31000 40000
38000 33000 40000
Capacity
(C.C.)
Air N.A. N.A. Available
Condition Available Available Available
Kilometers

Model

67 Managerial Decision Making

 Even Swap Method
STEP (5):

Swap

Objectives Car A Car B Car C

Price 38000 33000 40000
37400 32000 40000
Capacity
(C.C.)
Kilometers 50000 30000 80000
80000 80000 80000
Model

68 Managerial Decision Making

 Even Swap Method
STEP (6):
Swap
Objectives Car A Car B Car C
Price 37400 32000 40000
37400 36000 42000
Capacity 1300 1000 1100
(C.C.) 1300 1300 1300
Model

STEP (7): Swap

Objectives Car A Car B Car C
Price 37400 36000 42000
37400 38000 45000
Model 2000 1998 1997
2000 2000 2000

69 Managerial Decision Making

 Management
Information Systems
• (MIS)
A management information system (MIS)
provides information that organizations need
to manage themselves efficiently and
effectively.
• These systems encompass three primary
components: technology, people (individuals,
groups, or organizations), and data
(information for decision making).
• A management information system gives the
business managers the information that they
need to make decisions.
70 Managerial Decision Making
 Management
Information Systems
• (MIS)
Is a system created specifically to store and
provide information to managers.
• To be meaningful and useful, the data must be
organized in unique ways appropriate for end
use.
• MIS not only supplies data, but serves as a
network linking departments.

71 Managerial Decision Making

 TYPES OF (MIS)
• AI Artificial Intelligence
• ES Expert System
• OAS Office Automation System
• OIS Operation Information System
• EIS Executive Information System
• DSS Decision Support System
• TPS Transaction Processing System
• MIS Marketing Information System
• SMIS School Managing Information System
72 Managerial Decision Making
 TYPES OF (MIS)
MIS
MIS

Decision
Decision Transaction
Transaction
Support
Support Processing
Processing
System
System System
System
(DSS)
Automatically:
(DSS) (TPS)
For tasks that involve a large number of
(TPS)
 Searches, highly similar transactions such as:
 Analyzes,  Tracking customer orders,
 Summarizes, and  Developing,
 Reports Information  Storing,
Needed  sending invoices, and
 Tracking employee work day
73 Managerial Decision Making
 Things to Remember in
Decision Making
 Have your goals clearly in mind or in written
form before you proceed to formulate your
options
 Establish your priorities so that every decision
contributes towards goal achievement
 Be as creative as possible. Look for groups of
ideas or seemingly illogical ideas
74 Managerial Decision Making
 Things to Remember in
Decision Making
 Each decision has the potential of causing a chain of
reactions. Consider the decision in light of the following:
 What can go wrong with this decision?
 How serious would each of the situations be?
 Can the decision be modified to lessen the
possible impact of any errors?
 What is the estimated expenditure to minimizing
the possible mistakes?
 How long should the proposed decision remain in
effect?

75 Managerial Decision Making

 Things to Remember in
Decision Making
 Decision-making is simply a mental exercise which
must be transferred into action
 Don’t be quick to reopen decision already made
 Use a simulation exercise or trial run to determine
correctness
 Take sufficient time for decision-making
 Make the decision. The worst decision is to do
nothing
 Recognize that you can’t please everyone
76 Managerial Decision Making