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Quantitative Analysis To Managerial Decision Making 1
Quantitative Analysis To Managerial Decision Making 1
Decision Making
MBA 631
HARAMBEE UNIVERITY
Quantitative Meaningful
Raw Data
Analysis Information
BY: Mulachew Haile 6
Cont’d…
• Computers have been instrumental in the increasing use of quantitative
analysis, in simplifying processing of data.
Quantitative
Techniques
Programming
Statistical quantitative Quantitative
Mathematical Techniques Techniques
quantitative Techniques
BY: Mulachew Haile 9
Cont’d
i. Mathematical Quantitative Techniques: A technique in which
quantitative data are used along with the principles of mathematics is
known as mathematical quantitative techniques. Mathematical
quantitative techniques involve: Equations, Matrices, Determinants,
differentiations, Integrations, Set theory, Combinations, Permutations…
Uncertainty Ambiguous
& risk Information
Incomplete
Information
Representativeness Cognitive
Biases
Illusion of Control
Escalating Commitment
BY: Mulachew Haile 53
Types of Cognitive Biases cont’d…
i. Prior hypothesis bias: manager allows strong prior beliefs about a
relationship between variables and makes decisions based on these
beliefs even when evidence shows they are wrong.
ii. Representativeness: decision maker incorrectly generalizes a
decision from a small sample or one incident.
iii. Illusion of control: manager over- estimates their ability to
control events.
iv. Escalating commitment: manager has already committed
considerable resource to project and then commits more even after
feedback indicates problems.
More
alternative solutions Delays & ill feeling possible
Increases solution
understanding & acceptance Domination by individuals
Builds member
Risk of groupthink
knowledge & skill base
BY: Mulachew Haile
73
Building Group Creativity
i. Brainstorming: managers meet face-to-face to generate and debate
many alternatives.
• Group members are not allowed to evaluate alternatives until all
alternatives are listed.
• Be creative and radical in stating alternatives.
• When all are listed, then the pros and cons of each are discussed
and a short list created.
Production blocking is a potential problem with brainstorming.
• Members cannot absorb all information being presented
during the session and can forget their own alternatives.
Any ???