Making decisions using INTUITION: A decision made with feelings / instincts instead of facts
Making decisions RATIONALLY: Decisions made with several steps, involving analysis & facts
RATIONAL DECISION MAKING MODEL:
1. Identify the problem (could be falling profits for a firm)
2. Find & identify decision criteria (find criteria to increase profits e.g. increasing prices)
3. Weigh up criteria (rank criteria in order of relative importance)
4. Generate alternatives (consider alternative options)
5. Evaluate alternative options (consider which alternatices meet the criteria the best)
6. Choose the best alternative
7. Carry out the decision (now identify the consequences)
8. Evaluate the decision (consider if this was the best option after all)
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