Chapter 9 Outline

Chapter 9 Outline - Chapter 9 Managerial Decision Making I...

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Chapter 9: Managerial Decision Making I. Types of Decisions and Problems A Decision is a choice made from available alternatives. Decision Making is the process of identifying problems and opportunities and then resolving them. o Programmed and Non-programmed Decisions and Problems Are the two categories management decisions fall into A Programmed Decision is a decision made in response to a situation that has occurred often enough to enable decision rules to be developed and applied in the future. I.e. the decision of reordering stationary supplies at an office. A Non-Programmed Decision is a decision made in response to a situation that is unique, is poorly defined and largely unstructured, and has important consequences for the organization. I.e. decisions to build a new factory or move corporate headquarters. o Certainty, Risk, Uncertainty, and Ambiguity Certainty means that all the information the decision maker needs is fully available. Risk means that a decision has clear-cut goals and that good information is available, but the future outcomes associated with each alternative are subject to chance. Uncertainty means that managers know which goals they wish to achieve, but information about alternatives and future events is incomplete. Ambiguity means that the goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcomes is unavailable. See exhibit 9.1 on page 273.
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Chapter 9 Outline - Chapter 9 Managerial Decision Making I...

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