Introduction:
Many a time we speak of the word decision, as if we know much about decision. But what is decision? What it consists of? What are its characteristics? Let us have brief discussion about the word decision, as much of our time we deal with decision-making process in Operations Research.
Decision making:
“A decision is the conclusion of a process designed to weigh the relative uses or utilities of a set of alternatives on hand”, so that decision maker selects the best alternative which is best to his problem identify the most optimal or preferred choice among the available alternatives.
Basic requirement of decision making:The basic requirements of decision-making are
a) A set of goals or objectives,
b) Methods of evaluating alternatives in an objective manner,
c) A system of choice criteria and a method of projecting the repercussions of alternative choices of courses of action.
The first phaseconsists of formulation ofgoals and objectives, enumeration of environmental constraints, identification and evaluation of alternatives.
The second stagedeals with selection of optimal course of action for a given set of constraints.
InOperations Research, we are concerned with how to choose optimal strategy under specified set of assumptions, including all available strategies and their associated payoffs.
Classification of decision:
1. Depending upon the purpose
a) Strategic Related to external Environment
b) Administrative Resource utilization
c) Operational Related to day –to-day
2. Depending upon the nature
a) Programmed decision
b) Non-programmed decision
3. Depending upon the person involved
a) Individual
b) Managerial
4. Depending on the Sphere of interest
a) Economic
b) Social
c) Business
d) Political
5. depending on the time horizon
a) static
b) dynamic