1. Forecasting
Meaning:
“Forecasting is the systematic attempt to probe the future, so as to recognize problems and opportunities and turn the into plans of action”
Characteristics
It is the tools of Planning
It is concern with future
Its prepared on the base of Mathematical and statistical tools
Forecasting based on Past events and experiences

2. Forecasting Importance Key to Planning
Forecasting for new business establishment
Exactness in managerial decisions
Coordination and Control
Success in Organization
For financial requirements
Useful for other activities
Limitation
Its based on certain assumption
Its not perfectly correct, its indicate the trend of future
Forecasting is not accurately (Because of Dynamism)
Its Costly and time consuming

3. Forecasting Techniques of Forecasting Survey Method
Opinion poll method
Time series analysis
Extrapolation method
Regression analysis method
Input-output analysis
Business barometers method
Historical analogy method
Econometric models

4. Decision Making Meaning
“Decision making is a choice from available alternatives”
Characteristics
Goal oriented
Its Concern with Alternatives
Pervasive function
Continuous activity
Managerial function
Important elements of planning
Intellectual process
Its may be positive or negative

5. Decision Making Importance Its all Pervasive
It’s a key of managerial function
Its essential for solving the problem
Its necessary for the successful achievement of business objectives
Types of Decisions
Basic and routine Decision
Personal and organizational Decision
Policy and operative Decision
Tactical and strategic Decision
Individual and Group Decision
Programmed and non-Programmed Decision

6. Decision Making Process Defining and Clarifying the Problem
Collecting and Analyzing data
Analyzing Problem
Determining Alternative Solution
Evaluating Alternatives
Selection of Best Alternatives
Implementing and Assessment of Decision

7. Decision Making Techniques 1. Intuition 2. Facts
A. Traditional or Non-quantitative Technique
1. Intuition
2. Facts
3. Experience
4. Considered Opinion
B. Modern or Quantitative Technique
1. Linear Programming
2. Transportation method
3. Simplex Method
4. Probability Theory
5. Game theory
6. Waiting line theory
7. Model
8. PERT and CPM
9. Decision Tree

8. Decision Making DECISION TREE Meaning:
“Decision tree is one of the quantitative methods of decision making” or “Decision tree is a method used to choose best or most profitable of the available alternatives”
Characteristics
It is a Graphical Presentation
It is a Quantitative method
The choice is made after a careful consideration of the result and after a systematic comparison of the alternatives as well
Final result presented in monetary term
Several alternative emerge out of a main business decision

9. Decision making Example of Decision Tree: Sales Raise Raising of Sales
Change in Product
Change in Packaging
Improve in Quality
Appointing Salesmen
Develop New Market Channel
Conduct market Research

10. Decision Making Practical Of Decision Tree Alternative
Events(Raise in Sales)
Events(Decline in Sales)
Additional Machines
800000
Overtime
Probabilities
0.6
0.4
Possible Alternatives
Possible Events
Revenue net Cash flow
Rs :: ( *0.6) Rs
Additional
Rs :: (800000*0.4)
Machines
Overtime
Rs :: ( *0.6) Rs
Rs :: ( *0.4)

11. Decision Making Meaning of PERT:
“The techniques used for the purpose of planning and control of projects like Building a bridge & Preparing a Missile are known as PERT & CPM”
Full form of PERT is Program Evaluation and Review Technique
PERT was developed in 1958 by the US Navy.
Characteristics of PERT:
Planning and Control
Division into Activities
Event
Mutually Related
Expected Time
Presentation by Chart
Critical Path

12. Decision Making Advantage of PERT Planning Control
Utilization of resources
Estimated time
Balance
Time saving
Flexibility
Manpower planning
Limitation of PERT
Difficulty in estimating
Repetitive activities
Cost control
Complications
Estimates
Support of top management

13. Decision Making Example: Description Time Minutes 1 Start work 2
Activity
Description
Time Minutes 1
Start work 2
Receiving Materials For A 10 3
Receiving Materials for B 20 4
Processing A on Lathe Machine 30 5
Processing B on Lathe machine 6
Polishing B 40 7
Assembling A & B 8
Finish work
Total Minutes 1
10 M
20 M 2 3
20 M
30 M 5
40 M
20 M 4 6 7
0 M 8

14. Decision Making
CPM:
The purpose of CPM is to determine the estimated time of each of the activity and on that basis to determine the minimum time to complete a project.
CPM was developed by Walker and Kelly.
CPM was developed in 1957.
Difference between PERT and CPM
PERT
CPM
PERT was developed in 1958
CPM was developed in 1957
Its more use in R & D Projects
Its more use Construction Projects
The point at which each activity is completed is called Event
The point at which each activity is completed is called Nodes

15. Activity Description Time A To requisition Part A 1 B
To put it on lathe 4 C
To get it colored 3 D
To assemble it 2 E
To requisition Part B F
To Put it on shaper 7 G
To get it Polished 5 H
3 Hour 3 5
1 Hour
3 Hour B A C
2 Hours 1 6 7 E D G
1 Hour F
5 Hour 2 4
7 Hour