MANAGEMENT DECISION MAKING

Management Decision Making



Executive Summary

Management major concern is to understand and improve the decision making. For this, managers have been call constantly for decision making and to solve the problem that company is facing. Problem solving and decision making consider as a continuous process as they includes evaluating problem or situation along with the other alternatives, choices and actions necessary for an improvement. Hence, the overall decision making process reply on the accurate information available with the right people and at right time. The case of Upton Ltd and programmed decision will determine the importance of Management Decision Making.

Management Decision Making - Upton Ltd

Introduction

Making choices, planning activities and their implementation is a major challenge of everyday life. In very few activities people have as much experience in making decisions. We make dozens of decisions daily. The amount of information in today's world might boast decision of an expert. Management Decision Making is considered to be the most important aspect for the company future and its success.

Purpose of Essay

The purpose of this essay is to discover the process of decision making and how can decision making can be improved after the analysis of particular problem. Sometime decision making tends to be very difficult problem because of few complex factors. This paper will assist in understanding those factors and how to overcome such problems with effective decision making. Hence, in this paper we will cover up Upton Ltd case scenario along with the financial and non-financial consequences of closing certain department and finally, distinguish between programmed and non-programmed decision.

Discussion

Part One)

Recommend and Supporting Calculations for Each Department

In order to recommend which department is more advantageous from the perspective of cost and financial view, the contribution margin and profit of store as well as of each department has been determined. The reason for this is that, contribution margin indicates the marginal profit per unit sale which is very helpful in determining the operating leverage. Through this we can see which department is translating growth in sales in to growth in profits (Kaplan, 1984, pp. N/A).

The cost-benefit analysis are very important because for the fulfillment of a goal is good to determine the lowest cost with the best ratio of benefits. In evaluating alternatives is necessary to analyze the marginal analysis techniques, as these are important for the proper fulfillment of a goal, because by this analysis we compare additional revenue with the additional costs and thus realize as profit would get better results depending on the goal (Simons R., 1990, pp. 127).

When we calculate total cost, there are there are different costs associated and has huge impact on the contribution margin and net profit. As these cost increases the profit of the company reduces. There are certain direct cost and indirect costs. In this part the most important cost will be discuss which has direct impact on the profit of the company (Mishan E., 1976, pp.64).

Controllable costs: These types of costs are those on which ...