MGT3059 Week 1 Project

Decision Making

As with any other managers in an organization, operations managers must make decisions on behalf of the

organization.  While there are many aspects to such decision making processes, it is often valuable to have

structured tools that can assist in framing the decision and comparing the alternatives.   Two such structured tools

are decision tables and decision tools.

A decision table is a tabular means of analyzing decision alternatives and the factors that impact the decision.  For

example, the location decision analyzed in an earlier supplemental media resource utilized a weighting scheme in

order to rank different locations for a restaurant.  The weights included factors such as the cotenants in the same

location, the traf�c in the area, etc.  Thus, such a tabular form of analysis allows decision alternatives, which are

often treated as columns in the table, to be compared systematically.

A decision tree is a graphical means of presenting the decision alternatives, including probabilities that certain outcomes will occur and monetary values associated with those outcomes.  Decision makers will make decisions

that are believed to generate the greatest value for the organization.  Due to the fact that the outcomes are often

probabilistic (meaning that none of them are certain to occur), the decision maker is faced with uncertainty in

what the outcome will be.  However, if the probabilities are accepted as the “most likely” distribution of outcomes,

then the decision tree can be used to identify the decision that provides the organization with the highest

expected value. 

Not all decisions can be made by using decision tables and decision trees exclusively.  For many organizations, the knowledge and intuition of those working in the industry may be valuable and may not be easily factored into

such structured approaches.  However, when analysis can be conducted, these structured tools can assist in the

creation of a more objective analysis of the decision under consideration.