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... Scope
The following is a summary of a practical applicative example of the Rational Decision-Making Model. This particular example deals with a rather simplified form of the model - a choice between various ˇ§off-the-shelfˇ¨ goods which constitute full alternatives to each other. Notwithstanding, it serves the purpose of presenting the basic building-blocks of the model, its strengths and weaknesses, and assists in formalizing some basic concepts pertaining to the Rational Model. ... The Rational Model for Decision-Making in action
3. ... Personal attributes of the rational decision maker
Our IT manager considers himself a rational person. ... ˇ¨ Consequently, he often applies the rational decision-making model, which is best summarized as ˇ§making consistent, value-maximizing choices within specified constraintsˇ¨, in his decision making process. ... The rational decision-making model
The rational model is comprised of six steps:
[1] Define the problem
[2] Identify the decision criteria
[3] Allocate weights to the criteria
[4] Develop the alternatives
[5] Evaluate the alternatives
[6] Select the best alternative
The model operates under some rather harsh assumptions (in addition to the decision makerˇ¦s being a rational person):
- Problem Clarity- The problem is clear and unambiguous. ...
- Constant preferences ˇV The decision criteria are constant
- No time or cost constraints
- Maximum payoff ˇV The alternative chosen is the one yielding the highest value.
The following section describes how our IT manager follows these steps in order to reach a decision that will enable him solve the problem. In the following section, we will try to evaluate whether the decision process complied with the above assumptions. ... 2 Step 2: Identifying the decision criteria
The next step according to the rational decision-making model is identifying the decision criteria. ...
Based on the information collected from colleagues, he comes up with a list of the relevant criteria for each of the items he intends to buy:
Notebook
„Ń Price
„Ń Processor Speed
„Ń Memory Size
„Ń Hard Disk size
„Ń Graphics processing capability
„Ń Warranty period
„Ń Manufacturerˇ¦s reputation
„Ń Battery life
„Ń Dimensions
„Ń Weight
Camera
„Ń Price
„Ń Video Resolution
„Ń Image Resolution
„Ń Microphone Range
„Ń Dimensions
„Ń Weight
This list of parameters is the decision criteria which should enable our IT manager to evaluate the various alternatives. ... 3 Step 3: Allocating weights to the criteria
At this stage, the decision maker must take into account, in addition to his experience and the advice supplied by his colleagues, external elements such as the company policy, in order to allocate the criteria weights correctly. ... This means that according to our IT manager, small differences between the actual values of a certain criteria may affect the decision more than large differences in other criteria. ... 4
Despite the narrow margin by which the Sony notebook surpassed the IBM notebook, and the small difference between all three cameras, the decision rule is simple ˇV the alternative receiving the highest grade is the best alternative. ... Conclusions
As observed, the rational decision-making model has some clear advantages which make it, theoretically, a favorite mechanism for decision-making.
Approximate Word count = 2423
Approximate Pages = 9.7
(250 words per page double spaced)
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