About This Chapter
Quantitative Decision Making and Risk Analysis - Chapter Summary and Learning Objectives
When faced with tough decisions, good managers use a planning process that includes environmental scanning, strategy formulation, strategy implementation and strategy evaluation. In this chapter, our instructors will help you understand those steps. You can also learn about a variety of tools that managers may use in making decisions and how they work with certainty and risk to make sure that their decisions are well-informed. By the time you complete this chapter, you could have a solid understanding of the following concepts:
- Steps in the strategic management process
- Models for informed decision making
- Tools that can aid managers in making decisions
- Differences between risk management and risk analysis
|The Management Science-Operations Research Approach to Decision Making||Explain the management science/operations research method of making decisions.|
|The Strategic Management Process||List and discuss the four steps in this process.|
|The Decision Making Process for Organizations||Outline the seven steps of the decision making process and give examples pertaining to commonly known organizations.|
|The Quantitative Approach to Decision Making: Methods, Purpose & Benefits||Explore the quantitative approach and its benefits for managers.|
|Decision Making Models: Definition, Development & Types||Explain five types of models used in decision making.|
|Quantitative Decision Making Models for Cost, Revenue & Profit||Discuss these models and address how to determine the break-even point.|
|Quantitative Decision Making Tools: Decision Trees, Payback Analysis & Simulations||Explain how these tools help managers make sound decisions.|
|Decision Making for Business Managers: Certainty, Risk & Uncertainty||Discuss how these factors influence managers' decisions.|
|Risk Analysis & Risk Management in Business: Overview, Objectives & Comparison||Explain the role of risk analysis in the process of risk management.|
1. The Strategic Management Process
We will be reviewing the strategic management process, starting with the four main steps of the process. These steps provide the foundation for understanding strategic management as a whole and will serve you well as you deal with management decision-making situations.
2. The Decision Making Process for Organizations
We will be discussing the formal decision making process for managers. The process will show you how to look at a problem and use a series of steps to address that problem. It is a key element of managerial decision making and one that is very practical for the business environment.
3. Quantitative Decision Making Tools: Decision Trees, Payback Analysis & Simulations
Successful managers use decision-making tools to analyze a problem and try to determine the best solution for that problem. Here, we will discuss three main decision-making tools and help you to understand their function and implementation.
4. The Quantitative Approach to Decision Making: Methods, Purpose & Benefits
At the core of the quantitative approach to decision-making are the estimation of probabilities of event and their consequences. Learn more about popular quantitative methods in this lesson.
5. Decision Making Models: Definition, Development & Types
In this lesson, you'll gain an understanding of when decisions need to be made and discover how to use different decision-making models and types. Both rational and intuitive decision-making models are discussed.
6. Decision Making for Managers: Certainty, Risk & Uncertainty
Making decisions with the most amount of certainty is something managers learn to do over time. In this lesson, we will review how managers work with certainty and risk in order to make informed decisions.
7. Risk Analysis & Risk Management in Business: Overview, Objectives & Comparison
A successful business requires careful attention to the allocation of resources and, just as important, to the degree to which those resources are exposed to risk. In this lesson, we'll discuss the importance of risk analysis and management in business.
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