Statistics: Decision making and planning
We always have to take decisions in life. These decision can be related family , or ourselves. For example,
1. Which bus should I take to school today?
2. Which insurance company is the most suitable for me?
3. Which brand of air conditioner is going to save energy?
People use different method for making these decision. They might use their experience, or advice from seniors, conscience, or relevent information.
These decisions can be right or wrong, depending on the decision maker’s experience, beliefs, conscience, or information. But regardless of the method used, decision making requires the use of information directly or indirectly. For example, whether to sell a product to a customer at the price they want can be dacided by what kind of a customer the buyer is. The more information the buyer has about a product, the less chance that they will make a mistake however, sometime information cannot be directly used to make a decision It need to be analysed First. It can be done using basic statictical tecniques such as classification of data, frequency distribution and measures of central tendency and dispersion of the data. More advanced method can also be use. Before using any method the data collected need to be analysed first. The analysed data is called information. Decision making even in the field of business need not be exclusively subjective in character. These are many areas where it is possible to apply statistical tools and tecniques and thereby make decision making more objective in nature. Decision making would therefore remain an art as well a science. A decision situasion arises only when the decision maker has more than one course of action.If there is only one alternative there is nothing to decide. Therefore in any decision/situation the first step is to find out and list all possible alternatives exhaustively such that are mutually exclusive.
Another common element in a majority of decision problems is uncertainly. In the realm of business problem, the most common situation is one of uncertainly which is referred to as state of nature or the state of is one of uncertainly which is referred to as state of nature or the state of the world.