Introduction to Quantitative Methods

SUMMARY: In today’s competitive environment, a manager has to fulfill various objectives and in this process he has to make decisions that are in line with the objectives. Some of the characteristics common for most decision theory problems are: alternative courses of action, uncertainty and payoff. In business context decisions are made under uncertainty or with perfect information. This chapter has discussed about various strategies adopted by managers while taking decisions under uncertainty. These strategies involve maximizing profits with perfect information or minimizing losses under uncertainty. This chapter has also explained how to use marginal analysis and decision trees for decision making.