The economic tools of managerial decision making are optimization, game theory, numerical analysis, statistical estimation and forecasting. Optimization is particularly important for managerial decision making.
Continue ReadingMathematical analysis is used for maximizing a company's objective in spite of certain constraints like capacity and cost during optimization. To find out the standard deviation of a product's price or its average or mean value, a simple form of statistical estimation can be used.
Forecasting becomes important when it comes to matters like output and sales. A regression equation can be used for producing a future forecast based on the previous cause and effect relationships among variables, such as customer confidence level.
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