The knowledge gradient as reasonable decision-making tool in planning

Abstract

This paper aims to focus on identification and selection of the decision-making tools by planner using the ratio between known and unknown in sophisticated planning process. Decision situations in planning are multiplex (company objectives extrapolated through modelling in the future and mixed with uncertainty and risks), dynamic (dependent and independent events amalgamated in space and time and reflected in advanced analytics applications) and requires subjective thinking abilities from planner in the conditions of vague information, unvalidated data and tough deadlines. The objective of the research is to find the most appropriate tool in decision making for different planning situations through evaluating knowledge gradient for identified situation. Specific hypothesis of the study is usage of the knowledge gradient during decision-making under uncertainty that helps planner to easier the plan creation. The closest fields of application are planning in manufacturing transportation, logistics, delivery, supply chain management, organizational management.