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RDMM Model- 1

Rational Decision-Making Model (RDMM)


Overview: A decision making model that describe how individuals should behave order to maximize some out comes. Decisions are a part and parcel of the life of every human being. In every area be it personal or professional life we need to take decisions. !here are various types of decision making which can vary in importance. !here could also be some instances where decisions may need to be taken very "uickly. #ut when we are faced with problems or dilemmas where our decision has the ability to affect not only us but others around us as well then they have to be made very carefully. $any people take decisions depending %ust on their gut feeling. &owever if the decision involves money or someone's life it is important to analyze the situation carefully before making the final decision. !he ( steps to decision making process can help us make significant decisions thoughtfully.

The Companys !siness "trategies A#) *hipmanagement +imited *ingapore is reputed world wide shipping company situated in *ingapore. !hey are not ship owner but they are ship manager. !hey managed about ,- more ships from different .apanese owners such as !okyo $arine $itsui /*0 +imited 1agle $arine 0-+ine and 2ships etc. )learly defined again they are only "hip Manager not ship /wner or ship )harter. A#) *hipmanagement trades their ship different port in the world and takes care of different cargo on board. *o they need so many $arine /fficers and $arine 1ngineer to handle their fleet and they need to recruit from different nationalities. 3or easier understanding we need to shortly discuss rapidly increasing global marine market and shortage of marine academy for building up marine officer and engineers. 3or the different causes and present view maritime business is one of the best competitive businesses in the world. Due to huge shortage of marine officer and engineer many shipping company are facing problem for availability of mariner to recruit their ship. *hipping companies are facing problem for different reasons. !hese are... 4apidly expansion of shipping business in each year. Increasing number of ship in each year. Increasing "uality mariner but no similarity of increasing number of ship. 3or this result have a great scarcity of mariner world wide. In this competitive situation mariners are often asking higher wages. !hey are asking different personal opportunity when they are on leave. !hey are going out of control as they know they very important.

In this complex situation A#) *hipmanagement *ingapore decides to recruit crew on board to review from different nationality such as #angladesh India 5akistan 6krainian Indonesian and 5ilipino. In this case problem is 7 # C "hipmanagement $ill "elect $hich %ationalities &or Their "hip'(

RDMM Model- 8

Identification of 5roblem 1valuation of Decision of 1ffectiveness Identification of Decision )riteria

Implementation of Alternatives

Allocation of ;eights to )riteria

*election of an Alternative Analysis of Alternatives )ig!re-*9 *teps of Decision $aking 5rocess $hat are the "teps +nvolved in Decision Making( "tep *: +denti&ication o& ,ro-lem

Development of Alternative

!he first step involved in a decision making process is to understand the importance of making the decision. Decision making process begins with the existence of a problem or more specifically a discrepancy between an existing and a desired state of affairs. &ere problem is 7$hich %ationalities &or Their "hip'. "tep /: +denti&ying Decision Criteria: /nce a manager has identified a problem the decision criteria important to resolving the problem must be identified. !hat is managers must determine what:s relevant in making decision. ;hether explicitly stated or not every decision maker has criteria that guide his or her decisions. In A#) *hipmanagement *ingapore selecting profitable and secured <ationality has relevant factors or decisional criteria. $orking Capa-ility On oard: $ariner life is so hard and they are mostly busy when they are on board. *o they have to more working capability and professional skill. Actually their skill depends on their academy back ground. !here are some government maritime academies in #angladesh

RDMM Model- = India 5akistan 6nited 0ingdom Indonesia 5hilippines etc. 1ducational and training "ualities in those maritime academies are not same. *o varies their working skill based on their academic background. $ages "cale: !hough shipping market is global wages scale for different nationalities are not same. Indian is highest and 5ilipino is lowest. Actually ;ages depends on their skill and global image. #ut shipping company wants to recruit good marine officer in lower cost for their profit maximization. Identification of a 5roblem 7A#) *hipmanagement ;ill *elect ;hich <ationalities for !heir *hip>

Identification of Decision )riteria

;orking )apability ;ages *cale 4eputation )ommunication )ost Availability ;orking )apability ;ages *cale 4eputation )ommunication )ost Availability C#angladeshi C6kraine C5ilipino C#angladeshi C6kraine C5ilipino 0 angladeshi1 C6kraine C5ilipino 1-? -@ -A -B

Allocation of ;eights to )riteria

Development of Alternatives

CIndian C5akistani CIndonesian CIndian C5akistani CIndonesian CIndian C5akistani CIndonesian

Analysis of Alternatives

*election of Alternatives

Implementation of the Alternatives

C#angladeshi

1valuation of Decision 1ffectiveness

RDMM Model- B

)ig!re-/: !he Decision $aking 5rocess $orld $ide Rep!tation: Indian seamen are better known in the global shipping market. !hat is way maximum head office or branch office of different shipping company in $umbai )hennai 0olkata and other city in India. !hen #angladeshi seamen are also well known. #ut 5akistani is good in %ob but due their political eruption their global face is not good. *o maximum are want to avoid them if have not any emergency. Indonesian and 5ilipino are good in global face but they not good for %ob. 2ower Comm!nication Cost: A#) *hipmanagement *ingapore is situated in *ingapore. *o they need good and effective agents in among countries. &ave discussed earlier maximum shipping office situated in India. !hen 5hilippine #angladesh Indonesia and 5akistan. #ut in India shipping market is very complicities and total cost is very high. #ut in 5hilippine cost is lower. #vaila-ility o& Marine ,ersonnel: !here are few maritime university and institute in India. #angladesh holds also one $arine Academy and others three more private institute. *o they are holding a large number $arine /fficer and 1ngineer. "tep 3: #llocation o& $eight to the Criteria: If the relevant criteria are not e"ually important the decision maker must weight the items in order to give them the correct priority in the decision. &ow do one manager weight criteriaD A simple approach is to give the most important criterion a weight of 1and then assign weights to the rest using that standard. !hus a criterion with a weight of 1- would be twice as important as one given a A. /f course you could us 1-- and 1--- or any number manager select as the highest weight. Ta-le-*: )riteria and ;eights for A#) *hipmanagement *ingapore for $ariner 4ecruitment %ame o& Criteria ;orking )apability /n #oard ;ages *cale ;orld ;ide 4eputation +ower )ommunication )ost Availability of $arine 5ersonnel $eight 1? @ A B

&ere working capacity on board of mariner is the most important criteria for recruiting marine officer because every shipping company sees first safety of their vessel. !hen wages scale is important criteria for selection as all managers think how their company will be done profit maximization.

RDMM Model- A

"tep 4: Developing #lternatives: !he fourth step re"uires the decision maker to list viable alternatives that could resolve the problem. !his is the step where a decision maker wants to be creative in coming up with possible alternatives. &owever no attempt is made to evaluate the alternatives %ust yet only to list them. !he managers of A#) *hipmanagement *ingapore identified six nationalities for recruiting marine officer and marine engineers to their ship. !hey will identify which nationalities will best one for their safety on board and profitable. !hey select marine officer and marine engineers of India #angladesh 5akistan 6krainian Indonesian and 5ilipino. "tep 5: #naly6ing #lternative: /nce the alternatives have been identified a decision maker must analyze each on. #y evaluating it against the criteria established in steps 8 and step =. 3rom this comparison the strengths and weaknesses of each alternative become evident. !able-89 shows the assessed values that A#) *hipmanagement *ingapore gave each of their six alternatives. 0eep in mind that the rating given the six nationalities listed in !able-89 are based on the personal assessment made by A#) *hipmanagement *ingapore. Ta-le-/: Assessed 2alues of A#) *hipmanagement *ingapore 6sing Decision )riteria. )riteria $ariner Indian #angladeshi 5akistan 6krainian Indonesian 5ilipino ;orking )apability ( ? @ A A A ;ages *cale @ , ? @ ( ( 4eputation , ( B @ A @ +ower )ommunication )ost A , , A , @ Availability of $arine 5ersonnel ( @ A @ ( (

*ome assessments can be done ob%ectively. !he assessment of display "uality is more of a personal %udgment. !he point is that most decisions by managers involve %udgments-the criteria chosen in step 8 the weights given to the criteria in step = and the evaluation of alternatives in step A. !able-=9 represents only an assessment of the six alternatives against the decision criteria. It does not reflect the weighting done in step =. If managers multiply each alternative !able-8 by its weights !able-= you get !able-B. !he sum of these scores represents an evaluation of each alternative against both the established criteria and weights.

Ta-le-3: 1valuation of A#) *hipmanagement Alternatives against ;eighted )riteria

RDMM Model- @

4eputation +ower Availability !otal )ommunication of $arine $ariner )ost 5ersonnel Indian (@,A(=8#angladeshi ?,(,@=,5akistan @(B,A=-6krainian A@@A @8(Indonesian B(A,,=15ilipino A,@@,=1!he sum these scores represents an evaluation of each alternative against both the established criteria and weights. !hese are times when a decision maker might not have to do this step. "tep 7: "electing an #lternative: !he sixth step is choosing the best alternative from among those considered. /nce all the pertinent criteria in the decision have been weighted and viable alternatives analyzed manager merely chooses the alternative tat generated the highest total in step A. In A#) *hipmanagement *ingapore the managers of this company would choose the #angladeshi <ationalities $arine /fficer and $arine 1ngineer because it scored highest E=,-F on the basis of the criteria identified the weights given to the criteria. *o #angladeshi <ational $ariner is the best alternatives of among those nationalities. "tep 8: +mplementing the #lternative: *tep , is concerned with putting the decision into action by conveying the decision to those affected by it and getting their commitment to it. ;e do know that if the people who must implement a decision participate in the process they are more likely to enthusiastically support the outcome than if you %ust tell them what to do. Another thing manager also may need to do during the implementation process is to reassess the environment for any changes especially if the decision is one that takes a longer period of time to implement. After rating the available options according to criteria at the seventh step try to combine different options that are available to you and see whether you can come up with a better solution instead of %ust choosing one option. Gou also have to summarize the results you got for each option to make the final decision. "tep 9: :val!ating Decision :&&ectiveness !his is the final stage where you have to make the ultimate decision. #efore you do this it is important to go through all the steps and recheck all the information. !his would be beneficial for delaying the time of taking the final decision if you find any missing information. /ne very important thing that you have to keep in mind is that every decision you take would have some level of risk. 0nowing the potential risk involved in the decision one makes would aid in preparing for the problem that arises with the decision.

)riteria

;orking ;ages )apability *cale

RDMM Model- , ;hat if this evaluation showed the problem still existedD !hen the manager would need to assess what went wrong. ;as the problem incorrectly definedD ;ere errors made in the evaluation of the various alternativesD ;as the right alternative selected but poorly implementedD !he answers to "uestions like these might send the manager back to one of the earlier steps. It might even re"uire starting the whole decision process over. !hese ( steps to decision making process are essential decision making techni"ues that would prevent one from choosing the wrong option. !his is also an important way of learning proper decision making skills that would assist you in every decision you make.