What is the decision making model

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The profit function of an organization is given by the formula P = 0.2 * D1 + 0.3 * D2 + 0.5* D3. D1, D2 and D3 are divisional profits. The last year's profit of the organization was Rs. 20,000. This year, the corporate headquarters has set a profit target which is 10% more than the last year. In a meeting, the three divisional heads made a decision that this year's profit target for their respective division would be Rs. 16,000 (for D1), Rs. 25,000 (for D2) and Rs. 21,000 (for D3). What is the decision making model followed by the (a) corporate headquarters, and (b) the divisional managers? Explain

Reference no: EM132727795

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