Decision making cycle, Cost Accounting

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Decision Making Cycle

Steps in decision-making cycle are as:

a) Clearly define the objective that is to be the focus of the decision. This is significant in order that the decision makers contain a well-defined problem that has to be solved and not a vague idea that lacks clarity.

b) Consider the other strategies available to the satisfactory attainment of the objective. It is significant in order that the final decision agreed upon has taken account of all relevant possibilities.

c) Gather relevant information in order to compare other strategies in quantifiable terms. It may need considerable thought and effort in order to ensure about all relevant data are received.

d) Consider the qualitative factors that are likely to influence the decision. It is significant as an element in decision making. There may be non-quantifiable costs and benefits that lead to the final option of strategy being other than that providing the highest quantifiable return.

e) Compare the alternative strategies by utilizing both qualitative and quantitative data and then make a final decision.

f) Re-evaluate your decision; determine whether you are achieving the objectives and whether not, repeat the process.


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