Explain the various techniques of Decision Making?

The process of decision-making can be quite complex. In this regard, there are different techniques ranging from mathematical analysis to guesswork that can be used by the managers for making a decision. In this regard, the selection of the appropriate technique depends on the judgment of the person who is going to make a decision. However, the below mentioned techniques are generally used for making a decision:

1. Intuition: In case of decision-making on the basis of intuition, the inner feelings of the person making the decision are relied upon. In this case, the decision is made by the person on the basis of his or her conscience. The person considers the problem and then an answer to the problem appears in the mind of the person. In this case, it needs to be noted that each person has his own influences, preferences and psychological makeup. All these things have a significant impact on the decision made by the person. In the same way, the past experiences, training and knowledge of the person making the decision also play an important part in case of the decisions made on the basis of intuition.

2. Facts: It is generally believed that the decisions made on the basis of facts are the best decisions. The reason is that a decision that has been made on the basis of facts is based on factual data. Due to this reason, these decisions are sound and proper. At the same time, there are a number of software programs that can help in analyzing a large number of facts and data. In this way, these days, most managers rely upon the analysis of data while making a decision. However, there can be circumstances where it may not be possible to collect all the relevant facts while making a decision. Most of the managers complain regarding the fact that all the facts are not available to them while making a decision. At the same time, it is also very important that all the facts have been properly classified and interpreted by the managers. In this way, a decision cannot be made only on the basis of facts. In this process, the experience, knowledge and the beliefs of the person making the decision also play an important role as the help in analyzing the facts.

3. Experience: The past experiences of the managers also play a role in making a decision. For example, if a manager had to deal with a similar problem in the past also, a similar decision can be taken by the manager in the present case if the earlier decision had proved to be successful. At the same time, experience also plays an important role because all the facts are comprehended by a person in view of the experiences that a person has. However, the past experiences should not be followed blindly. Each new situation should be analyzed independently. The reason is that even if a particular decision has proved to be successful in the past, it is possible that the same decision may not work at present also. In the same way, it is not necessary that a decision that has failed in the past will not be successful in the future also. Therefore, past experience of the managers can help but it should not be the only basis for making the decision.

4. Considered Opinion: Considered opinion can also be used by the managers as a basis for making the decision. The reason is that apart from the relevant facts, opinions are also important in the process of decision-making. When a particular problem has been considered by a large number of persons, it may appear as a logical and sound basis for making the decision. For example, while making a decision regarding a new product, a marketing manager may take into account the relevant marketing statistics but at the same time, the considered opinions of different people may also help in making the final decision.

5. Operations Research: while traditionally, decisions were taken by the managers on the basis of their experience or intuition but these days, systematic techniques are also available to the managers for analyzing data. One such technique is known as operations research which is used by the managers while taking important decisions. In this way, the technique of operations research can help the managers in taking the appropriate decision as it provides the scientific basis to solve the problems in which the interaction of base components of the organization is involved.

6. Linear Programming: The technique of linear programming is used for deciding how the limited resources available with the organization can be used in the best possible way so that the objectives can be achieved. This technique is based on the assumption that a linear relationship is present between variables and the limits of variations can be certain. In this way, the technique of linear programming can be used for making decisions in the fields of production, warehousing or transportation.