What is scientific decision making?
Use of facts and data systematically to arrive at a logical decision
Involves models such as decision trees, critical path analysis, and cost benefit analysis.
What does intuitive decision making rely on?
Experience and intuition (gut feeling)
This approach contrasts with systematic methods.
Define strategic decisions.
Long term decisions affecting the direction of the business
Made by owners or senior management.
What are operational decisions?
Day-to-day decisions made in a business
Lower level, short term, and low risk.
What characterizes tactical decisions?
Short to medium term, less complex than strategic decisions
Usually carried out by middle management and can be flexible.
What is a decision tree?
A mathematical model to help managers make decisions
Uses estimates and probabilities to calculate likely outcomes.
What is the purpose of critical path analysis (CPA)?
Planning and controlling large projects
Helps make decisions on resource and time management.
What does cost benefit analysis assess?
Viability of a project based on social costs and benefits
Includes both private and external costs and benefits.
