157-0511/01 – Decision Making Methods (DMM)

Students are able to: - define a relationship between decision-making and other components of supervisory process; - classify the decision-making processes form various points of view; - describe the phases of the decision-making process; - use appropriate mehods for identifiaction and determination of weights and their scaling; - use basic methods of decision-making under the risk and uncertainty, scenario building; - use multiobjective decision-making methods under the certainty, - describe the basic approaches to multiobjective optimization.

Decision making is a key to the management responsibility and the basic management attribute. The decision-making is the elementary comptetence of managers. This process is the essential way how to make a change and how to ensure the effective functioning of the system. This subject contains of the description of basic properties of the decision-making processes and methods suitable for solving the various kinds of decision-making problems. Syllabus: 1) Introduction to the decision-making (from the initial problem to the consequences of the decision. 2) Classification of the decision-making problems from various points of view, practical examples. 3) Phases of the decision-making process and their description, common mistakes in practice. 4) Formulation of the decision-making problem - identification and formulation of variants and criteria, data type and their characteristics (qualitative x quantitative data). 5) Decision-making problems under the risk with the one objective, decision trees, scenario building. 6) Decision-making under uncertainty - profit and loss criteria (Waldo, Hurwitz, Laplace, Savage). 7) Assessment of weights - scales of weights measuring, methods of weights determination - pairwise comparison (Fuller triangles), Saaty method, scaling of the weights. 8) Basics of the multiobjective decision-making and its characteristics - the method of the weighted order, distance from dummy (fictive) variant. 9) AHP method (condition of use, principles, practical example). 10) ELECTRE method (condition of use, principles, practical example). 11) PROMETHE method (condition of use, principles, practical example). 12) GAIA - graphical extension of the PROMETHE method. 13) Principles and characteristics of the mono-objective optimization. 14) Principles and characteristics of the multi-objective optimization.

ANDERSON, R. David et al. An Introduction to Management Science: Quantitative Approaches to Decision Making. Mason: South-western Cengage Learning, 2012. ISBN: 978-1-111-53222-2. HILLIER, S. Frederick, LIEBERMAN, J., Gerald. Introduction to Operations Research. 9th edition. New York: McGraw-Hill, 2011. ISBN: 978-0-07-337629-5. TAHA, A., Hamdy. Operations Research: An Introduction. 9th Edition. New Jersey: Pearson, 2010. ISBN: 9780131391994.