How OR can Aid the complex problem of Management Decision Making :: GCSE Business Marketing Coursework

How OR hobo Aid the mixed problem of Management Decision fashioningHow OR can aid Management Decision Making modern-day businesses have more need to phone future operations than those of the last(prenominal) do. Managers in large corporations have to summarise and analyse the various selective information available to them when making decisions. The U.K. OR Society defines the operational re attend decision-making proficiencys as a scientific model of the system, incorporating measurements of factors such as chance and risk, with which to predict and comp be the outcomes of alternative decisions, strategies/ take fors. The purpose of these techniques is to help management determine its insurance and action scientifically. The models of OR are symbolic or abstract representations of certain life problems.Examples of techniques that can be used by managers for use in decision making are for example, forecasting. Statistical forecasting is to an extent, an extension of the vat icination of a dependent variable. A reasonably accurate forecast can be extremely valuable for a marketing or proceeds strategy.Time series forecasting attempts to capture the past behaviour of the m series and uses this information to predict future values. No external predictors are considered. (Kvanli et al, chapter 17)The types of factors that determine the strengths of forecasting are the time horizon of the forecast the stationarity of the information and the presence of trend, seasonality or cyclical activity. The the true of forecasting can be measured by calculating the MAD, MSE and the MAPE. These are useful for comparing the accuracy of a particular forecasting technique on two divers(prenominal) time series.The advantage of forecasting is that there is no need to search for external predictors to explain the behaviour of dependent variables. The main disadvantage is that the find values can be extremely complex and difficult to progress to out. Such methods are o ften hard to sell to managers who may non be able to understand the technique. However as mentioned earlier, if a technique is reasonably accurate, it is invaluable to managers.Networks are another decision-making technique that concerns the planning and the control of specific projects. The aim of networks is to complete the project in the shortest time, using the to the lowest degree resources with the minimum cost. Methods that can be used are CPA (critical track analysis) and PERT (Project Evaluation and Review Technique).The advantages of networks for management decision making are that they provide a logical picture of the layout and sequence of a complex project.