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1、SUPPLEMENTADECISIONMAKINGOperationsmanagersmakemanydecisionsastheymanageprocessesandsupplychains.Althoughthespecificsofeachsituationvary,decisionmakinggenerallyinvolvesthesamebasicsteps:(1)recognizeandclearlydefinetheproblem,(2)collecttheinformationneededtoanalyzepossiblealternativ
2、es,and(3)chooseandimplementthemostfeasiblealternative.Sometimes,hardthinkinginaquietroomissufficient.Atothertimes,interactingwithoth-ersorusingmoreformalproceduresareneeded.Here,wepresentfoursuchformalprocedures:break-evenanalysis,thepreferencematrix,decisiontheory,andthedecisiontr
3、ee.Break-evenanalysishelpsthemanageridentifyhowmuchchangeinvolumeordemandisnecessarybeforeasecondalternativebecomesbetterthanthefirstalternative.Thepreferencematrixhelpsamanagerdealwithmultiplecriteriathatcannotbeevaluatedwithasinglemeasureofmerit,suchastotalprofitorcost.Decisio
4、ntheoryhelpsthemanagerchoosethebestalternativewhenoutcomesareuncertain.Adecisiontreehelpsthemanagerwhendecisionsaremadesequentially—whentoday’sbestbreak-evenquantitydecisiondependsontomorrow’sdecisionsandevents.Thevolumeatwhichtotalrev-enuesequaltotalcosts.Break-EvenAnalysisbreak-
5、evenanalysisToevaluateanideaforanewserviceorproduct,ortoassesstheperformanceofanexistingone,Theuseofthebreak-evenquan-determiningthevolumeofsalesatwhichtheserviceorproductbreaksevenisuseful.Thebreak-tity;itcanbeusedtocompareevenquantityisthevolumeatwhichtotalrevenuesequaltotalcosts
6、.Useofthistechniqueisprocessesbyfindingthevolumeknownasbreak-evenanalysis.Break-evenanalysiscanalsobeusedtocompareprocessesbyatwhichtwodifferentprocessesfindingthevolumeatwhichtwodifferentprocesseshaveequaltotalcosts.haveequaltotalcosts.LEARNINGGOALSAfterreadingthissupplement,yoush
7、ouldbeableto:Explainbreak-evenanalysis,usingboththegraphicandIdentifythemaximin,maximax,Laplace,minimaxregret,algebraicapproaches.andexpectedvaluedecisionrules.Defineapreferencematrix.Describehowtodrawandanalyzeadecisiontree.Explainhowtoconstructapayofftable.3132PART1CREATINGV
8、ALUETHROUGHOPERATIONSMANAG
