RATIONAL DECISION MAKING MODEL

The rational model is the first attempt to know the decision-making process.
As per the rational decision-making model, the decision-maker has full or perfect information about alternatives and he devotes sufficient time to understand the situation and make decisions.
A rational decision-making model is a multi-step process for making choices between various alternatives. The process of rational decision-making favors logic, objectivity, & analysis over subjectivity and insight.

1. PRATIBHA COLLEGE OF COMMERCE AND COMPUTER STUDIES
RATIONAL DECISION MAKING MODEL

Subject - Decision Making and Risk Management

2. INTRODUCTION
●Also known as, the classical model, Rational model is
first attempt to know the decision making process.
●As per rational decision making model the decision
maker has full or perfect information about alternatives
and he devotes sufficient time to understand the
situation and make decision.
●Rational decision making model is a multi-step process
for making choices between various alternatives. The
process of rational decision making favors logic,
objectivity, & analysis over subjectivity and insight.

3. RATIONAL DECISION MAKING MODEL
( CLASSICAL MODEL )
1. Identifying the Problem
( Formulation of goals )
2. Collection of Data / Key facts
3. Developing Alternatives Solutions
4. Evaluation of Alternatives
5. Selection of Best Solution
6. Implementation of the Decision
7. Feedback and Review

4. Identifying / Defining the Problem and
Formulation of Goals
●The first step in making good decision is to identify the problem that needs to be solved or to
see opportunities that may be worthwhile.
●Correct and precise identification of problem is very important.

5. Collection of Data / Key facts
●Data relevant to the problem must be
collected. Optimal amount of data is to be
collected to solve the problem which means
that sufficient data should be collected to
solved the problem in hand.
●At the same time, one should ensure that the
data collection is not so huge that it delays
decision - making beyond the targeted
time-frame.

6. Developing Alternative Solutions
●After assessing the relevant data, the decision-maker can now identify several possible
solutions to the problem in hand.
●There can be more than one alternative available to solved the given problem.
●Decision maker should generate several possible alternative option to solved the problem.

7. Evaluation of Alternatives
●The alternative generated in the earlier step
should be evaluated against a set criteria to
decide their merit.
●The alternatives should be evaluated in terms of
feasibility, acceptability and desirability along
with time and cost constraints.

8. Selection of Best Solution ( from amongst the
alternatives solutions )
●After the evaluating the various alternative solutions in terms of their merits and demerits and
weighing the risk and rewards associated with the alternatives, the preferable solution to
address the problem can be selected. One can also refer this as making final decision.

9. Implementation of the Decision
●It refers to the executive of the selected course of action and seeing it through. A definitive
plan is to be put in place of implement the decision and optimal resources should be
allocated for this purpose.

10. Feedback and Review
●The decisions effectiveness is to
be evaluated through a
follow-up, which should be based
on result produced.
Decision-maker has to ascertain
whether the problem has been
solved, or desired goals have
been accomplished.

11. Identification of a Problem
Identification of Decision Criteria
Allocation of Weights to Criteria
Development of Alternatives
Analysis of Alternatives
Selection of an Alternatives
Implementation of the Alternatives
“My sales representative need new computer”
●Memory and storage
●Display quality
●Battery life
●Warranty
●Carrying weight
●Memory and storage……………… ...10
●Battery life
………………………………… .8
●Carrying
weight………………………… ..6
●Warranty…………………………………
….4
●Display
quality………………………… ...2
HP Pavilion Asus
Macbook Dell Inspiron
“HP Pavilion”

12. THANK YOU