The Strategy of Decision Analysis

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In the recent age, the concept of decision analysis has gained popularity in business strategic management. The fast increasing impact which this field of decision making has created on organizations, both private and public is noticeable. The business units are always engaged in making strategic and critical decisions in order to gain over their competitors and to succeed in the long run. Major progress in theory, computational techniques, and modeling tools are attributed to the leaps in computer science which have made the decision making the process an integral division of business (Cooper amp. Schindler, 2003).Anderson, et al. (2015) defines Decision analyses as a systematic, visual and quantitative approach utilized by the companies in order to evaluate and address vital choices that the businesses deal with. Decision analysis implements different tools to extract all relevant data that are required to find an optimal solution in the process of decision making. The term decision analysis was first coined by Ronald A. Howard in 1964 (Hatten, 2015). The decision analysis process promotes the application of logical methods with the aim of improving the decision making the procedure in private enterprise. Such techniques involve different models for decision making under situations of uncertainty or numerous objectives. It also involves techniques of risk assessment and risk analysis, experimental and extensive studies of decision making actions. In the case of business studies, an economic examination of competitive and strategic decisions is conducted with the aid of different statistical tools, expert system, and computer modeling software which facilitate the decision-making process. From yield management to product development and from supply chain management to investment, these techniques are widely used by large business firms. Some firms are also involved in the development of analytical tools so that they can directly apply in their proceedings to optimize their strategies.