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Decisions must be made at various levels in

the workplace. They are also made at the various

stages in the management process.
Decision making is a responsibility of the
engineer manager. It is understandable for
managers to make wrong decisions at times. The
problem is if he/she cannot make his/her own
Management must strive to choose a
decision option as correctly as possible. The
higher the management level is, the bigger and

Decision Making may be defines as

the process of identifying and choosing
alternative courses of action in a manner
appropriate to the demands of the
situation. This points out that an engineer
manager must adapt a certain procedure
designed to determine the best option
available to solve certain problems.

Rational Decision Making according to David

H. Holt is a process involving the following
1. Diagnose Problem
2. Analyze Envt
3. Articulate Problem/Opportunity
4. Develop Viable Alternatives
5. Evaluate Alternatives
6. Make A Choice
7. Implement Decision
8. Evaluate and Adapt Decision Results


To provide an engineer manager with

some guides in decision making, he must
be familiar with the following
Qualitative Evaluation
Quantitative Evaluation

This term refers to evaluation of

alternatives using intuition and subjective
judgment. Stevenson states that
managers tend to use this approach
1. The problem is fairly simple
2. The problem is familiar
3. The costs involved are not great
4. Immediate decisions are needed.

term refers to the evaluation of
alternatives using any technique in a group
classified as rational and analytical.

Inventory Models
Queuing Theory
Network Models
Regression Analysis
Linear Programming
Sampling Theory
Statistical Decision Theory

Economic Order Quantity Model used to

calculate the number of items that should
be ordered at one time to minimize the
total yearly cost of placing orders
Production Order Quantity Model an EOQ
technique applied to production orders
Back Order Quantity Model an invty
model used for planned shortages
Quantity Discount Model used to minimize
the total cost when quantity discounts are
offered by suppliers

This describes how to determine the

number of service units that will minimize
both customer waiting time and cost of

Program Evaluation Review Technique a

managers to schedule, monitor, and
control large and complex projects by
employing three time estimates for each
Critical Path Method a network technique
using only one time factor per activity that
enables engineer managers to schedule,
monitor, and control large and complex

The collection of past and current

information to make predictions about
the future.

Nave Approach
2. Simple Moving Average
3. Weighted Moving Average

It is a forecasting method that examines

the association between two or more

It is a model constructed to represent

reality, on which conclusions about real
life problems can be used. Simulation
does not guarantee an optimum
solution, but it can evaluate the
alternatives fed into the process by the
decision maker.

It is a quantitative technique, that is used

to produce optimum solution within the
bounds imposed by constraints upon the

It is a quantitative technique where

samples of population are statistically
determined to be used for a number of
processes, such as quality control and
marketing research.

Decision Making is a very important

function of the engineer manager. His
organization will rise or fall depending
on the outcomes of his decisions. It is,
therefore, necessary for the engineer
manager to develop some skills in