INFORMATION AS AN AID TO DECISION MAKING

How do we ensure rationality?
It is ensured, if the process of decision making is carried out systematically, whereby all the aspects of the decision making discussed above are taken care of. Herbert Simon said that a decision maker follows the process of decision making disregarding the decision or the type of decision and the motive behind the decision. This process is followed consciously or without knowing it. We can put this process in the Decision Making Mode.

Simon (1977) describes the process of decision making as comprising four steps:
1.Intelligence
2.Design
3.Choice
4.Later stage has been added with a view of improving the decision i.e. Review.

The intelligence stage: encompasses collection, classification, processing, and presentation of data relating to the organization and its environment. This is necessary to identify situations calling for decision.

During the design stage:, the decision maker outlines alternative solutions, each of which involves a set of actions to be taken. The data gathered during the intelligence stage are now used by statistical and other models to forecast possible outcomes for each alternative. Each alternative can also be examined for technological, behavioral, and economic feasibility.

In the choice stage:, the decision maker must select one of the alternatives that will best contribute to the goals of the organization.

In the review stage:, past choices can be subjected to review during implementation and monitoring to enable the manager to learn from mistakes. Information plays an important role in all four stages of the decision process.

An example of the Simon Model would illustrate further its use in the MIS. For example, a manager finds on collection and through the analysis of the data that the manufacturing plant is under-utilized and the products which are being sold are not contributing to the profits as desired. The problem identified, therefore, is to find a product mix for the plant, whereby the plant is fully utilized within the raw material and the market constraints, and the profit is maximized. The manager having identified this as the problem of optimization, now examines the use of Linear Programming (LP) Model. The model used to evolves various decision alternatives. However, selection is made first on the basis of feasibility, and then on the basis of maximum profit.The product mix so given is examined by the management committee. It is observed that the market constraints were not realistic in some cases, and the present plant capacity can be enhanced to improve the profit.