DECISION
THEORY
Introduction:
Decision theory is
primarily concerned with helping people and organizations in making decisions.
It provides a meaningful conceptual frame work for important decision making.
The decision making refers to the selection of an act from amongst various
alternatives, the one which is judged to be the best under given circumstances.
The management has to
consider phases like planning, organization, direction, command and control.
While performing so many activities, the management has to face many situations
from which the best choice is to be taken. This choice making is technically
termed as “decision making” or decision taking. A decision is simply a
selection from two or more courses of action. Decision making may be defined as
- “ a process of best selection from a set of alternative courses of action,
that course of action which is supposed to meet objectives upto satisfaction of
the decision maker.”
The knowledge of
statistical techniques helps to select the best action. The statistical
decision theory refers to an optimal choice under condition of uncertainty. In
this case probability theory has a vital role, as such, this probability theory
will be used more frequently in the decision making theory under uncertainty
and risk.
The statistical decision
theory tries to reveal the logical structure of the problem into alternative
action, states of nature, possible outcomes and likely pay-offs from each such
outcome. Let us explain the concepts associated with the decision theory
approach to problem solving.
Related Topics
Privacy Policy, Terms and Conditions, DMCA Policy and Compliant
Copyright © 2018-2024 BrainKart.com; All Rights Reserved. Developed by Therithal info, Chennai.