Decision analysis: experiences and expectations

Abstract

Are the days of management by hunch over ? Does a formal approach to managerial problems exclude judgment of experienced executives? In the process of answering these questions an attempt is made to discuss the role of decision analysis in managerial problems. Empirical studies covering pricing, bidding and investment decisions are discussed as illustrative cases. It is pointed out that decision analysis, in no instance, rules out the judgment of the executive. On the contrary, it builds on such judgments and the decision-maker's preferences for results. The approach suggested by decision analysis is particularly useful in complex problems. In future, as the complexities increase, far greater would be the need for such an analysis.