Decision Making, Systems, Modeling, and Support
2.1 DECISION MODELING AT HP USING SPREADSHEETS
HP works with Olavson and Fry to develop spread sheet tools for decision making at HP
A Tool is “reusable business problem.
HP develop tools through three phases
Problem framing
Design and develop
Hand off
Problem framing:
Will analytics tools solve the problem?
Can the existing solution be leveraged?
Is a tool needed?
Design and develop
Develop prototype no quickly on possible
Build insight, not black boxes
Remove unneeded complexity before handed off
Partner with end user in discovery and design
Develop Operation(OR)champion
Who will use the tool?
Who owns the decisions that the tool will support?
Who else must be involved?
Who is responsible for maintenance and enhancement of the tool?
When will the tool be used?
How will the use of the tool fit in with other processes?
Does it change the processes?
Does it generate input into those processes?
How will the tool impact business performance?
Are the existing metrics sufficient to reward this aspect of performance?
How should the metrics and incentives be changed to maximize impact to the business from the tool and process?
Decision Making: Introduction and Definition
Characteristics of Decision Making
Definition of Decision Making
Decision Making and Problem Solving
Decision-Making Disciplines
Decision Style and Decision makers
Characteristics of Decision Making
Groupthink (i.e., group members accept the solution without thinking for themselves) can lead to bad decisions.
Decision makers are interested in evaluating what-if scenarios.
Experimentation with a real system (e.g., develop a schedule, try it , and see how well it works)may result in failure.
Experimentation with a real system is possible only for one set of conditions at a time and can be disastrous.
Changes in the decision-making environment may occur continuously, leading to invalidating assumptions about situation (e.g., deliveries around holiday times may increase, requiring a different view of the problem).
Definition of Decision Making
Decision making is a process of choosing among two or more alternative courses of action for the purpose of attaining one or more goals.
Managerial decision making is synonymous with the entire management process.
Planning involves a series of decision: what should be done? When? Where? Why? How? By Whom?
Managers set goals, or plan ; hence, planning implies decision making. Other managerial functions , such as organizing and controlling, also involve decision making.