Alexandra Prokhorenko

Faculty: Economy

Speciality: Economy of enterprise

Theme of master's work:

"The formation of economic decisions in a market economy"

Scientific adviser: Doctor of Economics, Professor Valentina Hobta  

SUMMARY OF RESEARCH AND DEVELOPMENTS

INTRODUCTION

Relevance of the topic. Nowadays Ukraine's economy is at the stage of instability, the country is not an attractive investment, and its products are not competitive, there has been an increase in unprofitable enterprises. Ukrainian economy indicates the low efficiency of management at the enterprise level - not a sufficient justification for business decisions and the need for improved tools. The persistence of such trends in the future could lead to the final disposal of the country from among the economically developed. The existence and solution of these problems are essentially related to the quality of economic decisions, because the problem of formation of economic decisions is important.
Various global literary publications offer readers a wide variety of studies and periodicals devoted to the theory and practice of decision-making. Theory study of economic decisions within the sphere of scientific interests of authors such as: Albert M., Bespalov B.A., M.A. Eddous, Meskon M.H., Stensfild R., Troyanovsky V.M., Hedouri F. Hobta B. M., Sharapov O.D. etc. In spite of the different modern approaches, there is a unity of views on the importance of decision support in a market economy. At the same time, financial and economic state of enterprises in Ukraine shows that both theory and practice study of economic decisions needs to be developed.

The purpose and objectives of the study. The aim of this work is to develop theoretical foundations and practical tools for improvement regarding the formation and justification of economic decisions. To achieve the goal it was decided to study these tasks:
- revealed the socio - economic significance of business decisions;
- identified a place and role of the decision in the management;  
- analyzed definition of economic decisions among different scientists;
- proposed list of criteria for decisions taken at the stages of diagnosing problems and develop alternative solutions;
- justified a set of methods necessary for making economic decisions;
- generated and analyzed a list of requirements for the quality of economic decisions;
- developed advice on constructing a model of linear programming to optimize the size of the production costs.

The object of study. The object of research master's work is the process of preparing decisions.

Subject of study. Are subject to the basic principles and methods of formation economic decisions.

Research methods. In the process of applied scientific methods: abstraction, classification of species, comparison, systematic approach, the logical - analytical estimation of parameters modeling the economy, analogy, expert evaluation, qualitative and quantitative analysis, traditional methods and techniques of economic analysis.

The practical significance of the results. The development of theoretical concepts and recommendations proposed in the masters research, raise the level of validity of economic decisions regarding the optimal use of production costs. They can be used by different economic agents in forming their own algorithm for management decision-making, evaluation of combinations of interchangeable resources in the production process Developed recommendations will be used in the company of CJSC " Enakievsky gormolzavod."

MAIN CONTENT OF MASTER'S WORK

At the present stage of development of Ukraine's economy is characterized by instability, lack of sound macroeconomic projections, the lack of statistical information and its definition unreliable, which complicates the development of economic decisions on a separate company. On the quality of economic decision-making depends primarily on whether the profitable activities of the company. In Ukraine, there are a significant number of unprofitable enterprises, particularly in agriculture [1].

Ukraine has considerable potential for development of the agricultural sector and its transformation into a highly efficient economic sphere. In market conditions for farming enterprises of the agrarian sector of Ukraine's economy one of the main problems is the attraction of investments and the introduction of new technologies. Need for effective modern solutions with respect to streamlining and improving the efficiency of enterprises. In this case, the performance of the agricultural sector of Ukraine, according to experts, has huge potential.
According to the 2010 exports of dairy products is much higher than imports. On the basis of statistical data for 2010, the quality of Ukrainian milk increases. At the same time, overseas prices for dairy products are rising. At the time of the global food crisis and the associated total price increase import of dairy products become unprofitable. Therefore, the Ministry plans to focus on domestic production and support of Ukrainian dairy producers [3]
Under the conditions of growth financing the production of dairy products in Ukraine managers must be focused on innovative production technologies and modern approaches to conducting such business. Given the limited productive resources becoming increasingly relevant question of optimization of their size and efficiency of their use. Assessment and analysis of alternative ways of using material resources is central to the enterprise management. The basic problem of any enterprise is reduced to ineffective management and poor quality of economic decisions, which require detailed examination and study.
The concept of a "solution" in the scientific literature is treated differently. Most often it is characterized as a process, as an act of choice or as a result of choice. [4] The decision process is characterized by the fact that occurs in time, carried out in several stages (preparation, development, adoption and implementation). Decision as a result of choice is an order-to-action (work plans, draft). In general, the administrative decision is complex.
A business decision should be optimal, efficient and effective. Its optimality - the ability to be the best according to the criterion (of criteria) for optimality. [5] Efficient solution can be called the realization of which leads to increased profitability.
Formation of economic decisions - is primarily a process, the working process of managers and all staff employees of the company, aimed at improving the efficiency of business, development and rational use of resources, increase production, reduce costs and improve profitability, increase revenues and profits, etc. .
Identify two major technology decision-making: intuitive and rational. The simplest technology decision-making is intuitive, the advantage of intuitive technology is the speed of decision making, but the main drawback - a large error probability.
Improved and augmented rational technology decision-making is represented in the work of the master. In practice, this process allows for parallel execution of certain procedures that can significantly reduce the time of decision making.
Use of the mechanism provides the correct diagnosis of the problem, according to the model chosen decided to develop alternatives that are evaluated according to criteria the optimal solution. This stage is considered the most important and crucial moment in the process of decision. Next best option is elected and the plan for implementing the decision. At this stage the important role played by monitoring implementation of the decision. Formation of the information base to address the problem in the future will predict the development of events when a similar situation.
For each individual enterprises should be developed mechanism of formation and economic decision-making. The concept of solutions is central to the management process. The concept of solutions is central to the process of enterprise performance management, because the subject of housekeeping should ensure continuous improvement of the mechanism of formation of the latter. To improve the efficiency of enterprises need to develop theoretical propositions justify business decisions
Improvement of economic decision-making mechanism in the agricultural sector becomes an important component of the reform of agricultural enterprises. Strategic approach to solving this problem is to develop an appropriate categorical system, technologies, methods, principles, and the selection and justification of design models and tools for making business decisions. This will enable the transfer processes of economic decision-making, which today are largely intuitive in nature, science driven and economically sound process that will help improve the overall economy.
During the development of economic solutions to the most accurate result can be achieved by applying mathematical methods based on the formalization of the task, although this route and complex. It is very difficult to accurately build a model of the object along the chosen criteria, even the exact mathematical solution of the job can not ignore the possible consequences of optimal solutions: the social, environmental, ergonomic, etc. nature. Methods of the formation economic decision, usually used in complex.
Impossibility of quantifying the credibility and competence of an expert who will make a decision necessitate in the master's work will be further described only quantitative methods as well as qualitative methods are subjective.
Mathematical Methods for increasing the quality of economic analysis, facilitate the fullest possible accounting impact of various factors on the results of operations, accuracy of calculations. Since the mathematical methods can not be directly applied to an object, is it necessary to construct an adequate mathematical model of the object. General model formulation of the mathematical programming problem is as follows:

      (1)

Linear programming is one of the most developed branches of mathematical programming and optimization theory. The result of making rational decisions on resource management is to improve the performance of resource use and, in general, the effectiveness of the company. Linear programming problem in many cases, it is aimed at finding the most beneficial way to allocate limited resources.
There are many methods for optimization of production resources. The most important among them are solutions "resource-product", "resource-a resource" "product-resource", "Product-product." Very important is also a solution that answers the question "how much to produce?. With the saturation of the market in agricultural products this decision becomes one of the key and requires taking into account not only economic factors but also the fact that under such circumstances is complicated by the problem of marketing.
Of all the mathematical programming methods are the most common methods for linear programming. Methods of mathematical programming in agriculture make it possible to practically easily find reserves of savings. Their application allows you to most accurately and fully utilize available resources in the agricultural sector and on this basis to increase with minimal production of various kinds of agricultural products.
Central to the solution of "resource-resource" is a matter of definition is technically and economically feasible combination of input resources. To find the answer to this simple, at first glance, the question must apply the methodology for calculating and analyzing such an index as the marginal rate of substitution.
The essence of the economic dimension of the solution "resource-resource" is to choose such a relationship (a combination) of input resources to produce a given output, in which the costs of these resources would be minimal. To find such a combination, you need to know the price of input resources.
Based on the prices of substitutable resources can determine the total cost of all technically acceptable combinations. For further calculations it is necessary to calculate such a figure as the prices of substitutable resources.
Price ratio shows how many pounds the company can "exchange" of 1 kg of one resource to another. Not to 'resource-resource "has been fully economically justified, it is necessary to compare the technical and market options for replacement resources. The lowest cost interchangeable resources are achieved when the magnitude of the marginal rate of substitution exceeds the ratio of prices to the lowest possible value.
It should also be noted that the company, there are many restrictions regarding the purchase of resources from suppliers. To get an effective solution to ensure its feasibility. That is, it should not contradict the capabilities of the enterprise. Effective method for making economic decisions with respect to cost optimization is linear programming.
Also, such optimization problems can be solved using linear programming. In general form the model of tasks of linear programming is as follows:

            (4)
provided
      (5)
i = 1,2.,n;
  Xj ≥ 0, j = 1,2,...,n.

In accordance with this task - as the optimality criterion will be the amount of expenses. Restrictions would relate to the minimum and maximum size of resources in general and for each type separately, purchase order or other form and conditions of its storage limits should be perfectly understood and calculated, on the quality and quantity depends on the quality level of the decision.
After obtaining the optimal solution of linear programming is often a need to identify the sensitivity of the solutions to certain changes in the parameters of the original model. Lack of methods that will help reveal the impact of possible changes in model parameters on the optimal solution can lead to what the solution will become obsolete even before its implementation.
Therefore, knowing and skilful use of decision rule "resource-based resource, managers can provide a more economical use of resources and thereby contribute to getting the company more profits. Need to take into account also the fact that the amount of savings in proportion to increases with the difference in the prices of substitutable resources. Data derived from a sensitivity analysis of linear programming model and performance of GEO CCs and allow the enterprise to improve the quality of management decisions in a market economy.

CONCLUSIONS:

The current stage of development of Ukrainian economy is characterized by unstable factors in the external environment and the increasing complexity of economic decision-making, which are formed in high-risk conditions and multivariate mechanism for their implementation. Formation of economic decisions - an integral part of business and an indispensable element of the management process that requires improvement.
The effectiveness of economic solutions provide comprehensive and objective justification for it. Thus, the development of theoretical concepts and classifications, criteria for effective decision making, development of recommendations concerning the application of linear programming methods to improve the quality formation mechanism of economic decisions. And as a result of qualitative decision-making - to improve the efficiency of the enterprise as a whole.

REFERENCES:

Note

At the moment of writing this abstract master's qualification work is not completed yet. Final completion is scheduled for December 2011. Full text of the work and materials on the subject of the work can be obtained from the author or his / her supervisor after this date.