# Managerial decision- making. Distribution of decision-making: The number of criteria: –One-criteria decision making –Multicriteria decision making Methods.

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Managerial decision- making

Distribution of decision-making: The number of criteria: –One-criteria decision making –Multicriteria decision making Methods of measurement criteria: –Nominal –Ordinal –Absolute Deterministic decision (decision-making under conditions of certainty)

Procedure for multi-criteria decision making: It is based on the selection of the most suitable option for two or more interchangeable variants using two or more evaluation criteria. 1.Create a model - in the form of decision matrices. 2.Determining the importance weights (intensity perception) of the individual criteria. 3.Aggregation evaluationAggregation criteria and importance weights

Illustrative Example: - multicriteria selection options Ad1. Creating a model Variant Criterion K1: power per liter (kW/l) acceleration time (O→200) km/h (s) Breaking distance (100→O) km/h (m) V1: BMW M3 CLS81,616,833,3 V2: Porsche 911 GT3 77,815,137,6 Vz: average 79,715,9535,45

Power Breaking distance Order of variants Zrychlení BMW Porsche The decision-making model

Ad2. Determining the importance weights methods: Order Scoring (classification) Paired comparisons

Order Method to determine the importance of the criteria weights Importance of the criteria using two "experts" E1, E2. ExpertK1K2K3∑ E11236 E21326 Hi nonstandard weight 25512 Vi normalized weight 2/125/12 12/12=1

Scoring (classification) method Scoring scale: ExpertK1K2K3∑ E124511 E21539 Hi nonstandard weight 39820 Vi normalized weight 3/209/208/2020/20=1

The method of paired comparisons: Preferential arrangements such as: E1: K3 > K2 > K1; E2: K2 > K3 > K1 K1K2K3∑K1K2K3∑Vi K1X000 X0000 K21X01 1X12(1+2) / 6 = 0,5 K311X2 10X1(2+1) / 6 = 0,5

Ad3. Aggregation of the evaluation criteria and the importance weights: Determine sequence variants The method of sequence functions (aggregation) The method of scoring (aggregation) Method basic (aggregation)

The method of sequence functions (aggregation) weights for these criteria: V1 = 0; V2 = 0,5; V3 = 0,5; K1K2K3Hi 1 ∙ V 1 Hi 2 ∙ V 2 Hi 3 ∙ V 2 Wt order V121201,5 V212101,5 inconclusive result!

The method of scoring (aggregation) – for the same weight pointsK1 (kW/l)K2 (s)K3 (m) Variant K1K2K3Wtorder 1 V13253,51. 2 (75 - 80>(17 - 16>(37 - 36> 3 (80 - 85>(16 - 15>(36 - 35> V223122. 4 (85 - 90>(15 - 14>(35 - 34> 5 (90 - 95>(14 - 13>(34 - 33>

Basic Method (aggregation) Variant ↓ coefficients → h1 = Vi / Vb (Revenues criterion type (better larger value) h2 = Vb / Vi ( cost type criteria (better smaller value) h3 = Vb / Vi ( cost type criteria (better smaller value) V11,02380,94941,0646 V20,97621,05630,9428 Wt1 = 0 + 0,5 ∙ 0,9494 + 0,5 ∙ 1,0646 = 1,007 … first in the order Wt2 = 0 + 0,5 ∙ 1,0563 + 0,5 ∙ 0,9428 = 0,9428 … second in the order

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