Decision Making Under Certainty Uncert

Decision Making Under

Certainty, Uncertainty & Risk
Principles of management
UPG SYBMS- B

Introduction
• Decision making is the major responsibility of a manager, regardless of his or her functional area or level in the organization
• In any disaster-related program, the goal should be to provide a framework for decision makers to effectively analyze a complex situation containing numerous alternatives and possible consequences and to arrive at the best possible choice with a minimum of delay.

Steps in Decision Making
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Recognize and define the problem or opportunity. –

Identify and analyze alternative courses of action, and estimate their effects on the problem or opportunity.

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Choose a preferred course of action.

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Implement the preferred course of action.

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Evaluate the results and follow up as necessary. Quantitative and Qualitative Factors in Decision Making
• Quantitative factors provide a numerical basis for decision making. It reduces decisions to looking at a monetary value placed on different choices. • Qualitative factors takes into account those factors that lead to issues that may influence the outcome of a decision taken by the company in long term.

Quantitative and Qualitative Factors in Decision Making

Quantitative and Qualitative Factors in Decision Making

Variables in Decision Making
• Decisions are made where there are few alternatives and all the parameters of the decision can be clearly identified.
• Many decisions, however, require that a choice be made between different courses which may be affected by variables or events beyond a manager's control.
• For example, the field director of a refugee relief operation knows that the accuracy of new arrival forecasts will depend in large measure upon political events in another country

Decision making is carried out under three different conditions or sets of variables:
1. Decision Making Under Conditions of
Certainty.
2. Decision Making Under Conditions of
Risk.
3. Decision