Small Multi-Attribute Method Of Decision Analysis - 4125 Words

Small Multi-Attribute Method Of Decision Analysis (Essay Sample) Content: SMALL MULTI-ATTRIBUTE METHOD OF DECISION ANALYSISStudent NameProfessorInstitution Name Location Of InstitutionDate Introduction How much importance does decision making have in business? This is a rather simple question in the world of business that has been practically answered in the course of history. A decision can make or break a company. This simple fact strongly underlines the value of making good decisions in any organization, more so in business organizations, which after all, are in the business of making profit. This is the reason why it is really important that when decisions are being made, all the variables should be fully considered (Winterfelt and Edwards,1986) Now, what makes a good decision? To understand this, we must first acknowledge that decision making is and should always be treated as a process. Generally a decision can be made either be made rationally or intuitively (Gigerenzer, 2015; Jones, 2014; Kessler, 2013). However, du e to the sensitivity of decisions that are made in business are made rationally. The rational process of making decisions usually involves a critical analysis of the decision made. Because of the similarities in the decision problems that face businesses, decision makers have come up with various decision analysis methods that break down a decision making process into workable steps which guide the process(Hammond, Keeney and Raiffa, 2015). An example of this is the SMART process which will be covered in detail in later this text using an example of a decision problem to outline its steps. This text will however begin by making a short discussion on the importance of decision making and the application of decision analysis in the making of effective decisions in business. The importance of this will also be illustrated in the course of applying the SMART method of decision analysis on the chosen decision problem.Importance Of Decision Making And Analysis By definition decision mak ing is a process of selecting the best course of action out of a set of alternatives (Hwang, and Masud, 2012; Nicholas, 2017). The importance of good decision making therefore lies in the importance of selecting the best choice among a set of alternatives. Good decision making directly impacts the operations and profitability of a business. Some of the ways in which it does this are explained below.First, decision making allows for the proper use of business resources. Decisions must be made in the allocation of resources in business, whether it is personnel, money, equipment or materials (Parnell, Terry, Tani and Johnson, 2013; Salo, Keissler and Morton, 2011). A business thrives when its resources are being utilized in the best way possible. Decisions involving resources are therefore directly related to the profitability of a business. Even in making purchases, the decision makers must make very informed decisions such that the business gets the highest possible value for it mon ey. For this reason, this type of decisions must involve more than one decision maker. Where the business constantly gets value for its money, it is bound to remain profitable.Away from just remaining profitable, a business must also achieve growth. Growth is usually one of the objectives of every business (Langdon, 2012; Lussier, 2011). This is definitely one of the consequences of decision making. Good decisions made at the right time can spur the growth of a business (Fullop, 2005; Abbas and Howard, 2015). These decisions can be triggered by the existence of an opportunity or from a problem that faces a business. If decision makers take into account all the characteristics of the available options that the business has, and then a correct decision is made which can lead to the growth of a business or in some cases stop the downward trajectory of a business. An example of such a decision is in deciding whether to enter a new market or not and in selecting the new market to enter among the available markets. This type of decision requires a critical analysis. Entering a new market at the wrong time can lead to losses, at the same time, entering a new market at the correct time can lead to immense growth of a business. Similarly, when the wrong market is chosen for the business to enter, this may shake the business and reduce its profitability. The business may have to pullout of the new market at some time. However, if the correct market is chosen, the business increases its profitability and may have to increase its operations in the new market. This example illustrates the effect that decision making has on business growth.In the face of challenges, a business must work around these challenges so that they do not affect the operations and profitability of the business. This is where decision making comes in. The decision makers in the business must make suitable decisions to help avert a crisis that could be potentially be caused by such challenges or pro blems. The decision makers in making their decision must consider all the options that the business has to overcome these challenges and choose the most practical ones. For example, with increased load defaulters (the challenge), a bank can make certain decisions to avoid being affected by this. For example they could choose to carry out more strict background checks, or to increase their interest rates or even the number of loans given out or a combination of these. The challenges, whether financial, operational or external, must always be solved by the best available solution. In summary, good decisions making also helps in improving the efficiency of the business in that the resources of the business are fully utilized to obtain maximum output or returns from them. It has also been observed that employees are more motivated in a business where rational decisions are made (Parnell,Terry, Tani and Johnson, 2013. ). When you factor in all the effects of good decision making on a bus iness, you see that in general, decision making determines whether a business will achieve its objectives or not. When good decisions are made, the business tends to effectively achieve its objectives. Bad decisions on the other hand may detract a business from achieving its set goals.Now that the importance of decision making has is clear we now shift focus to decision analysis. Simply put, decision analysis is just a process that supports the decision making process (Olson, 1996; Humphreys, Stevenson, and Vari, 2000). Decision analysis is a systematic or structured approach of making decisions in a defined manner (Lang Golub, 1997). With decision analysis, the decision problem that faces an organization is broken down into its smaller facets which are then considered individually. This is done in a procedural way where all the steps have been predetermined. This way, every decision problem is critically considered before a decision is made on it.Decision analysis is therefore ver y important as it enables decision makers make the best decision possible since they have to analyze all the available alternatives before making a decision (Nicholas, 2017). This reduces the risk in making new decisions to the operations of the business. Decision analysis also makes the process of making a decision easier. This is because every time decision makers are faced by a decision problem, they just have to follow the set decision analysis method. The presence of a set decision analysis method also makes the decision problem transparent and verifiable. This means that the rationale behind a decision made by decision makers can be traced and explained to everyone who is interested. Various methods may be used in decision analysis. An important method that has found wide application is the Simple Multi-Attribute Rating Technique (SMART) method of decision analysis. This text will highlight the various features of the SMART method and demonstrate its application in decision m aking using a chosen decision problem in business.The Decision ProblemEinstein College is a private university with multiple campuses. The university wants to do biometric registration of all students and staff and incorporate it in its database of the bio data of students and staff members. This registration will support its intent of replacing manual identification processes starting with its main campus. One of the objectives of the new biometric system is improving security in the campus. The system will reduce the chance of intruders accessing the premises as only biometrically registered persons will be allowed in at the gate. This was possible in the previous system at the gate where a person just had to show their ID to security personnel. The security personnel proved not to be strict enough and could easily allow in intruders. There we also reported cases of fake Student and Staff IDs. The system also aims at enforcing the campus policy on class attendance by ensuring that class attendance is recorded by a biometric device as well as eliminating the possibility of impersonation during exams since it has been noted that some students pay other parties to sit for exams on their behalf. These steps are geared towards improving the quality of education offered by the university. In relation to the staff, biometric identification will help track the movements of the staff in and out of the premises to boost punctuality to the workplace and improve the general workplace discipline of the staff.Application Of SMART Decision Analysis Method.The Decision Makers The new system would clearly affect different departments in the university. In light of this, the decision cannot be made by a single person or a group of persons from the same department. The decision can therefore not e made by the management only. A multi-departmental team comprising of representatives of all the affected departments would b...