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Decision trees permits:

  • The user to gain a wide idea of possible outcomes of the project/decision, i.e. in this case the selection of two locations
  • Easier understanding of the decision to prevent confusion or misunderstanding
  • Easy and simple calculations to be made to aid decision making
  • Easy accessibility for all users to make scientific/rational decisions
  • Offer a quantitative tool in decision making

However, decision trees:

  • Are based on approximate figures only and the actual outcomes may well be very different
  • Can be incorrect unless all costs, possibilities and benefits are considered
  • Only consider quantitative issues in decision making, so might be considered too basic a model
  • Qualitative factors could be inspect, e.g. familiarity with the two dissimilar locations, availability of skilled labour, cultural issues and training concerns, recruitment , legal issues, tax systems or simply management preferences
  • Similarly, other quantitative process could be considered, e.g. investment evaluation to see which location would generate the greatest revenue
  • Other decision making equipment might also be useful to Peckham Traders Ltd. such as PEST analysis or force field analysis in order to minimize any resistance to change.

 

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M9555853

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