Towards Decision-Making Under Conditions of Uncertainty

It is known that entrepreneurial activity leads to a clash of interests and the emergence of conflict situations, the resolution of which requires the choice of certain strategies on the part of entrepreneurs. It is noted that the choice of strategy and decision principle depends on uncertainty, which is directly related to a certain risk. It is shown that in a situation of uncertainty, the risk probability cannot be known, nor can it be logically deduced, calculated, or objectively assessed. In this regard, to quantitatively assess the degree of risk, it is necessary to know the risk parameters, which depend on the possible consequences of any action and the likelihood of the actions in each specific case. The authors consider a linear model of optimal management of free financial resources. The solution to the model is reduced to solving a linear programming problem (LPP). The authors analyzed the actions of an entrepreneur with free funds and a desire to invest them in a way that prevents their devaluation and ensures income. As is known, the degree of risk decreases directly in proportion to the degree of awareness. Because accurately describing a firm’s risk reduction activities is impossible, the paper proposes a linear mathematical model describing the work of the firm’s coordinating body. It is noted that solving the risk reduction problem based on the linear model provides approximate results. It is emphasized that more accurate values are possible in the nonlinear formulation, which, in turn, complicates the model. The advantage of the linear formulation is that the obtained solution enables the coordination of the situation so that the decision made is close to the calculated one. The presence of competition requires clarity and accuracy in predicting the outcome. It is emphasized that more precise results are possible in the nonlinear formulation. The model is implemented using a specific example. The solution is obtained using simplex tables. An analysis of the results is presented. The formulation and solution of this work can be used to make informed decisions regarding free resources.