Decision Analysis for Management Judgment - Essay Example

Heuristics are simple and efficient rules which are using by the managers of an organization when they will go to take any important decision or making any judgment. There are three types of Heuristics and those are Availability Heuristic, Representative Heuristic, and Base-Rate Heuristic. Availability Heuristic helps to bring some plan or judgment in mind very easily and make a decision in a simple way. Representative Heuristic helps in a comparison between information and mental prototypes. Base-Rate Heuristic is a mental shortcut which helps to make decisions by using probability (Gilovich, Griffin, and Kahneman, 2002, pp. 549-554). Notion of SMARTA comprehensive plan should be made by the manager to do work and implement a plan in a smart way.

Hard work is required but in the present market scenario, smart work is more needed than the hard work. Otherwise, there will be no value only for hard work. Then also a growth of the organization will be improved in a smart way. The smart method also can be used to set management objectives. Here ‘S’ means specific, ‘M’ for measurable, ‘A’ for achievable, ‘R’ means realistic and ‘T’ indicates time-based which is very much essential to set the proper objectives of a business.

Simulation can be explained as a form of science. This scientific tool can be used in experimental purpose without exposure to risk. Some real world factors and some good underlying assumptions help to do this experiment.