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Decision Analysis Essay Example

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Decision Analysis

Variables are used in decision analysis to represent value or symbol of the actual attribute being determined. A variable denoted by Y may represent the cost estimates, overheads, revenues etc.A simple linear regression model is a statistical technique that explores the inter-relations between two or more variables. Linear regression tools have applied in many organisations to forecast for the observed variables. The military may want to determine whether there is a relationship between warring period and weapons use. To do so, the observed data is analysed and the simple line equation is used.The simple regression analysis can be determined by plotting a graph using the same variable to obtain the line of best fit. This can be then be used to forecast on future needs of weapon acquisition for the military. The relationship between the period the war takes the higher the number of weapons needed. The relationship is linear. This model works best when there are two variables under consideration.Scatter diagrams are used to analyze the relationship between two variables. The variables are plotted in the graph and the line of best fit cuts through the majority of the variables. As the case of simple regression analysis, the scatter diagrams are used for predicting variables and relationship between variables is also assessed.Inventory control allows managers to determine the lead time i. the time between the supply of raw materials and production time. The lower the lead time the more effective the company operates because it is will always be on time in production and meeting the consumers demand (Donald, 2003).Just in time module is applied when the production is made on delivery of raw materials. In this case inventory is not held in the stores. An ABC tool helps an organisation to categorize its resources according to the order of importance. These two tools assist the management of a company to control resources-one of the vital tool being time for production. Enterprise resource planning is beneficial since it individualizes the needs of an organisation. It assists the management to budget effectively and adopt the most viable decisions in running the organisation (Susan and Belverd, 2010).To forecast means to predict the future outcomes. This is achieved through the use of qualitative and quantitative methods. Quantitative forecasts are based on historical

References

Andrew L., 2005, Decision analysis: an integrated approach,4th Ed., John Wiley and Sons, Chichester. 23

Christian A., Wayne, L. & Christopher, Z., 2008, Data Analysis and Decision Making with Microsoft Excel 3rd Ed., Cengage Learning, London. 596

David, G., Lawrence, L. & Keith, E., 2007, Applied regression analysis and other multivariable methods,4th Ed., Cengage Learning, London. 25

Donald, J., 2003, Inventory control and management2nd Ed., John Wiley and Sons, Chichester. 7-15

Susan V. & Belverd E., 2010, Managerial Accounting, 9th Ed., Cengage Learning, London. 184-186

Terry, L., 2006, Quantitative techniques, 8th Ed., Thomson Learning, London. 169-171

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preview essay on Decision Analysis
  • Pages: 4 (1000 words)
  • Document Type: Essay
  • Subject: Marketing
  • Level: Undergraduate
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