 Decision  Decision Making Process  Techniques of Decision Making  Conclusion

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2. Techniques of
Decision
Making Process

3. Hello!
We are M. Vamsi Krishna,
P.Sampath, D. Madan,
T. Krishna & Saandeep
MBA- 1A,
Aditya Global Business School,
Surampalem.
You can find me @Linkedin
vamsikrishna.vk28@gmail.com
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4. “Making Good Decisions is
a crucial skill at every
Level- Peter F. Drucker
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5. Synopsis
 Decision
 Decision Making Process
 Techniques of Decision Making
 Conclusion
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6. Meaning
1) The action or
process of
deciding
something or of
resolving a
question.
2) It is a choice
made from
various available
alternatives.
What is
Decision?
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7. Decision making process
It refers to a process by which individuals
select a particular course of action
among several alternatives to produce a
desired result for predetermined
objectives.
The main purpose of it is to direct the
resources of an organization towards a
future goals and reduce the gap
between the actual position and the
desired position through effective
problem solving and exploiting business
opportunities.
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8. Decision Making Process
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9.  Different Decision Making Techniques can
improve decision outcomes and your
effectiveness.
 Different decision making techniques can
provide unique advantages for specific
decisions.
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Techniques of
Decision Making

10. Techniques of Decision Making Process
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11. Techniques
Marginal Analysis
This technique is used in
decision-making to figure
out how much extra output
will result if one more
variable (e.g. raw material,
machine, and worker) is
added.
In his book, ‘Economics’,
Paul Samuelson defines
marginal analysis as the
extra output that will result
by adding one extra unit of
any input variable, other
factors being held constant.
Marginal analysis is
particularly useful for
evaluating alternatives in the
decision-making process.
Break even
Analysis
This tool enables a decision-
maker to evaluate the
available alternatives based
on price, fixed cost and
variable cost per unit.
It is that point of sales at
which the investments made
and the profits generated by
the firm are at equilibrium.
Break-even analysis is a
measure by which the level
of sales necessary to cover
all fixed costs can be
determined.
At the break-even point,
total revenue equals total
cost and the profit is nil.
It helps to select and choose
the most economical
alternative.
Financial Analysis
This specifically focuses on
the financial aspects of a
prblem like the cost
involved, the returns
expected, the expected time
required for the returns, etc.
This is an invaluable tool in
the hands of decision
makers for evaluating
various financial alternatives
or financial aspects of the
alternatives by analysing
cash inflows and cash
outflows.
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Techniques of Decision Making

12. Paired Comparison Analysis
It is helpful in framing a decision when accurate
data is not available to solve a particular problem.
Instead of comparing a large no. of options this
approach believes in reducing all available
alternatives into pairs and then selecting the
better option.
It is a useful tool for making comparison of
related as well as unrelated options like-
decisions regarding purchasing a new machine or
adopting latest technology or venturing in new
markets.
Paired comparison analysis facilitates the
decision maker in setting priorities in case there is
a dispute regarding utilisation of limited
resources.
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Techniques of
Decision
Making

13. Techniques
Pareto Analysis
It helps in identifying the
areas in the business that
will help in raising maximum
profits.
The basic idea behind
pareto principle is that 80%
of the benefits can be
achieved by putting 20% of
efforts.
Ratio Analysis
It is an accounting tool for
interpreting accounting
information. Ratios define
the relationship between
two variables. The basic
financial ratios compare
costs and revenue for a
particular period.
The purpose of conducting
a ratio analysis is to interpret
financial statements to
determine the strengths and
weaknesses of a firm, as
well as its historical
performance and current
financial condition.
It also helps in studying the
relationship between past
and present financial
reports.
Operation
Research
This is perhaps the most
scientific technique to
understand industrial or
commercial operations and
predict outcomes.
An operation research (OR)
involves the practical
application of quantitative
methods in the process of
decision-making.
When using these
techniques, the decision-
maker makes use of
scientific, logical or
mathematical means to
achieve realistic solutions to
problems.
Several OR techniques have
been developed over the
years like decision tree
analysis, simulation,
queuing, game theory and
transportation models which
are extremely significant for
making sound decisions,
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Techniques of Decision Making

14. Nominal Group Technique
In this technique any form of communication or
information sharing is restricted. Here the
members put forth their suggestion on individual
basis and finally all the suggestions are put to
vote.
The most popular suggestion is then accepted. In
this technique individuals contribute their inputs
individually and reach an unbiased decision as a
group to approve the most favoured idea or
solution.
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Techniques of
Decision
Making

15. Techniques Brainstorming
It is a creatve process that is
free from group pressures
and traditional decision
making process.
This is a time tested
technique to broaden the
base of decision making
process by involving a large
no. of persons and
generating as many ideas as
possible.
This is a technique to
generate uninhibited ideas
without the fear of rejection
or criticism.
Grid Analysis
This analytical tool is
especially useful in taking
complex decisions when
there are a large number of
alternatives, the choice is
not obvious and there are
multiple factors to contend
with.
It is highly evolved
technique which helps the
decision maker in making
decisions where the desired
alternatives are not
available.
Force Field
Analysis
It is a technique of weighing
all the pros and cons of an
issue i.e., the factors and
forces in favour or against of
a particular decision.
By comparing the two set of
options decision makers
arrive at the decision which
would have the least
negative or adverse impact.
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Techniques of Decision Making

16. Conclusion
 When it comes to making decisions, one should always
weigh the positive and negative business consequences
and should favour the positive outcomes.
 This avoids the possible losses to the organization and
keeps the company running with a sustained growth.
Sometimes, avoiding decision making seems easier;
especially, when you get into a lot of confrontation after
making the tough decision.
 But, making the decisions and accepting its
consequences is the only way to stay in control of your
corporate life and time.
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17. Thanks!
Any queries?
You can find me at @Facebook
address vamsikrishnamulasa
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