Decision Making depends on the relationship between uncontrollable factors and continuing process of optimizing system performance. A model is developed in under assumption related to existing business condition.
Business managers and directors used to rely on their experience and instinct to make tough decisions. Increasingly, however, they want to know what the numbers say. In the era of big data, quantitative methods used by operations analysts and economists provide solid evidence to guide management decisions on production, distribution, marketing and personnel management.
Business environment is always unpredictable and can throw up unusual situation more than often. Thus, organizations find themselves in the middle of dynamic environment. Here model and methods like sensitivity analysis, stability analysis, what-if analysis, scenario modeling, etc. is utilized.
Theory of Constraints
Theory of constraints is a management concept which helps organization deal with situation, which hampers its growth and march towards higher level of performance. Theory of constraint encourages an organization to deal one constraint at a time and consist of following steps:
- Identifying constraints of the existing system.
- Identifying was to potential extract more out of system constraints.
- Exploiting constraints to its fullest potential should be made priority.