Benefits of Decision Support - Essay Example

BENEFITS OF DECISION SUPPORT Introduction A company intends to manufacture plastic products to serve worldwide demand. The managerial team and other decision making supporters brings across an idea to set up a facility in each region in order to meet worldwide demand and hence lower the cost of transportation. Their idea also aims at avoiding duties incurred in importing the products from one region to the other. The main problem according to the company managers is the lack of economies of scale since the facilities are sized to meet local demand of the region in which it is located. The problem is formulated by focusing on building the appropriate size facility in each region in 5 or 10 million units capacity. Literature review Some more problems arise which may be linked with increasing the size of the facility. Consequently the cost of operation of the facility will shoot creating another problem. Industry siting may be regulated the existing state regulations’ and local laws. ‘This imposes another problem due the technique of increasing the size of the facility in each region in order curb diseconomies of scale. (Watzlawik) Completion for raw materials by other companies which are related to plastic manufacturing company may also impose another threat. In this case growth of different facilities in different regions may be returded. (Michael, 2009) Technological change can also affect manufacturing and also the utilization of the plastic product hence affecting the growth of plastic manufacturing companies in different regions The increase in the size of the company or organisation leads to the overload of management team due to large scale operations which draw the attention of the managers all through. (Guttmann, Michael, & John). A larger number of employees are employed which requires maximum supervision to ensure smooth operation of the company. Managers should ensure that company resources and materials are not wasted. As a result of overworked management, minimal supervision and control of staff operation emerges leading to laxity of cost of production control. Scale enlargement of the facility in an region of the world could lead to decreased attention on customers individual taste .goods of the same quality are produced consequently as a result of large economies of scale. Fall in demand of the plastic product follows. Hired employees controls the operation of the large sized business in absenter of the owners There usually be loss of personal interaction between the employer and employees which can later lead to staffs strikes and lack outs .This move adversely affects the business altogether. In the process of overcoming shortages in supply of plastic productions, there is a possibility that depression could result from the large economies of scale operation. Supply of products exceeds the prevailing demand posing a big problem to the company. In case of international war, large sized company is affected since it operates through international scale Problem formulation During the production of plastic products for industrial use ,the idea of setting appropriate size the facility to meet local demand of the plastic products possess several problematic questions which includes; transportation problems, similar product problem ,feed mix problem and disassembly problem. Basic concept of transportation problem involves transfer of homogeneous product from one canter to various demand regions. There are three possible constraints of encountered during formulation of transport problems. A supply availability limit the transfer of products from supply points to customers’ .This ensures that the supply at all canters does not exceed supply from the main facility firm. Another case is that the minimum demand which calls for shipment should be greater than or may be equal to demand at any facility. When dealing with the practical approaches of solving problems, there are three aspects of problems which involve analysis of problem size, how it is formulated and the steps used to solve the existing problem. Many approaches are applied in solving problem. Some theories are used which studies the behaviour of the all algorithms due to an increment in problem size A number of algorithm’s can be developed to put across some specific formulation of a particular problem. Problem formulation can be monitored and performance investigated according to its prior performance. Criteria for managerial decision making Most of the decisions followed by managers in managing their firms at all levels comprises of some extend of uncertainty and usually be non-planned decision making .some criteria for managerial decision making includes; decision characteristics, decision-making models ,steps executives Take Making Important Decisions, Participative Decision Making and techniques for Improving Decision Making in Todays Organizations. Decision making may be difficult to make.to some point decision deals with conflicting idea. The decision maker is fully equipped with the necessary information which gives a room to choose an idea from a conflicting pool. Managerial decision making involves taking risks associated with the organisations. Each decision has a clear cut aims depending on the nature of the problem. The future consequences linked with each alternative can be granted a chance in order to determine to which extent they affect the operations of the organisation. Uncertainty is reviewed in managerial decision making where managers know the goals which they intend to achieve. Very little information about the future task is incomplete and only creative alternatives which could be available. Political model approaches as a criteria applied by the managers look a lot as real environment where the most managers operates from and also the decision markers. Different people apply different criteria in making managerial decision; directive, analytical, conceptual and behavioural styles can be used. In direct style, simple and clear solutions to problems are arrived within a short time. Few alternatives are considered. The style is known to be efficient and rational requires application of rules all through the entire process. Appropriate modelling technique In selecting the appropriate alternatives, one should put in mind the idea of risk. In the case of the plastic production company stake holder or the managers should be willing to undertake the risk with the motif of gaining a higher payoff .Staffs and supporting staffs should work together in implementing a chosen alternative Rational decision making approach can be better in getting a solution to a particular problem according to Rational Choice Theory. Relating this to the case of the plastic products, the idea of setting up a facility in each region cannot necessarily lead to reduction of cost of transport or the general cost incurred in meeting the demand of the plastic product. Establishment of the main supply of plastic products at a large scale production from a certain regional centre located centrally could also serve in reducing general cost of production as well as meeting the demand of the plastic products. A large company enjoys the economies of scale and this could to some extend increase the supply of products to customers who are located at different regions of the world. Transportation cost incurred can be compensated with decreased total production cost. Decision problem approaches Several approaches are known during the decision making approaches. In pros and cons approach, different alternatives of the problem are analysed whereby listing of the advantages and also disadvantages of each option is very crucial. The contrast of the benefits and all the cost incurred is carried out. This technique can also be referred as the rational decision making. Another technique of simple priotization is also widely applied where an alternative with the highest probability is chosen and is the most valued. Satisficing approach in which the accepted alternative is obtained after examination of many alternatives is also an applicable one. Mathematical psychology technique which involves comparison of variety of available alternatives by aspects was introduced (Amos Tversky) one chooses an aspect linked to an alternative. Consequently an alternative which lacks aspect are discarded. Decision problem approaches can also be reached through calculation of opportunity cost of possible alternative. Software for solving problems Some individuals and businesses use software in decision making process to solve the problems linked with growth of industries. Complex decision making in today industrial sector is contributing much positively to high level of decision making. There are five steps which are followed in solving problems. ‘It is necessary to have the data to be isolated before turning (James, H.) The first step ensures that the objectives are well defined in a precise manner which calls for measurement of performance. The second step deals with quantifying the problems and then search for appropriate cause of the problem. Thirdly a decision has to be made whether to tune the software to achieve the set objective. The next step is ranking the remedies according to their payoff. In the last step, economics of the project is critically analysed. Finally, cost benefit analysis may be undertaken. Result analysis using computer software Since algorithm is a stepwise command given to computers, analysis of the problem solution in each step can be executed. A direct feedback of the problem from a computer with problem solving software can be interpreted and represented graphically depending on the problem. Conclusion There are various ways in which different types of the problem can be approached either manually or by use of computers. Different algorithm can reach to the same solution though depicting differences in the cost incurred Reference Egan, Donald F., Robert L. Wilkins, James K. Stoller, and Robert M. Kacmarek. 2009. Egans fundamentals of respiratory care. 9th ed. St. Louis, Mo.: Mosby/Elsevier, Print. Guttmann, Michael, and John Parodi. 2007. Real-life MDA solving business problems with model driven architecture. Amsterdam: Elsevier/Morgan Kaufmann Publishers, Print. Momoh, James. Smart grid fundamentals of design and analysis. 2012. Hoboken: JohnWiley & Sons, Print. Watzlawick, Paul, John H. Weakland, and Richard Fisch. 2011. Change: principles of problem formulation and problem resolution. New York: W.W. Norton & Co., Print. Bhandari, M. W., Hunter, K. M., Phillips, K., Keyser, B. B., & Morrow, M. J. (2013). Practical application of entry-level business analysis skills. Burlington, MA: Jones & Bartlett Top of Form Bottom of Form Read More