Applying Savage criterion to decision making in production management

Abstract

In circumstances of unemployed industrial capacities by current contracts and a lengthy production cycle the production management is mainly grounded on assumptions and predictions. The paper analyzes the possibility of applying the game theory and Savage criterion to production planning under conditions of uncertainty in business operations. Considering the intensity and rate of changes in the state of production system and relevant impact on the production program trends, the aim of the paper is to demonstrate a quantifiable basis for strategic decision making in production management.