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Four phases of decision making proposed by herbert

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Four phases of decision-making proposed by Herbert Simon(1)Intelligence – find what to fix: find or recognize a problem, need or opportunity. Involves detecting and interpreting signsthat indicate a situation, which needs your attention. “Signs” come in many forms: consistent customer requests for newproduct features, the threat of new competition, declining sales, rising costs, an offer from a company to handle yourdistribution needs, and so on(2)Design – find fixes: consider the possible ways of solving the problem, filling the need, or taking advantage of theopportunity. You develop all the possible solutions you can(3)Choice – pick a fix: examine and weigh the merits of each solution, estimate the consequences of each and choose the bestone (which may be to do nothing at all. The “best” solution may depend on factors as cost, ease of implementation, staffingrequirements and timing. This is the prescriptive phase of decision making – it’s the stage at which a course of action isprescribed(4)Implementation – apply the fix :carry out the chosen solution, monitor the results, and make adjustments as necessary.Simply implementing a solution is seldom.Four main types of decisions(1)Structured – involves processing a certain kind of information in a specified way so that you will always get the rightanswer. No “feel” or intuition is necessary. Kinds of decisions you can program – if you use a certain set of inputs andprocess them in a precise way, you’ll have a correct resulta.Calculating gross pay for hourly workers – easily automated(2)MOST DIFFICULT Non-structured decisionis one for which there may be several “right” answers, and there is noprecise way to get a right answer. No rules or criteria exist that guarantee you a good solution.a.Potential for advancement when choosing a job(3)EASIEST Recurring decision– one that happens repeatedly, and often periodically, whether weekly, monthly, quarterly, oryearly.a.Deciding how much inventory to carry and deciding at what price to sell the inventory are recurring decisions.(4)Non-recurring or Ad-hoc decisions– one that you make infrequently (perhaps only once) and you may even have differentcriteria for determining the best solution each time.a.Deciding where to build a distribution center or company mergersDecision support systems – isa highly flexible & interactive IT system that is designed to support decision making when the problemis not structured. A DSS is an alliance between you, the decision maker, and specialized support provided by IT.1)Model management componentconsists of both the DSS models and the DSS model management system. A model is arepresentation of some event, fact or situation. Businesses use models to represent variable and their relationships2)Data management componentperforms the function of storing and maintain the information that you want your DSS to usethe data management component consists of both the DSS information and the DSS database management system.

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Term
Spring
Professor
Salisbury

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