Research And Application Of Entropy Theory In Management Decision Analysis

Entropy theory called by Einstein is the primary principle of science. It reflects the evoIution rule in the physicaI world. Entropy is the best measurement of uncertainty and information.Entropy theory has moved towards chemistry from the physics, entered the biosphere, and has been expanded to the other domains, such as the information science and the social economy for 150 years. It is more and more widely applied in many domains and has become "down-lead" of numerous subject development. Any other theories can't compare with it because of its profound connotation and strong penetrability in the science development history. Because of the similarity of the management system with the thermodynamics system, entropy theory which was born in the thermodynamics system is becoming one of the new theory foundations that the research of the management decision system is based on, and is forming a new direction that describes and analysizes the management decision in physical language. On the basis of analysis in entropy theory's extensive applications, this paper discusses further the applications of entropy theory in the management decision analysis and provides a new method of thought in the applications of entropy theory in the management decision analysis.On the research basis of entropy theory and the management decision analysis theory, firstly entropy thought in the management decision is deeply studied and analysized in this paper and its connotation is applied in the enterprise management. Secondly, entropy weighting double points method is produced by combining entropy weighting method and double points method. Detailed thoughts and computing process of this method are presented. And this method is applied in item investment layouts and control decisions in order to help investors make decisions. Lastly three-dimensions entropy measure criteria for risk is studied. This method is applied in actual management developing decisions. With the result of this analysis, this method can basically evaluate the profits and risk of the development. So this method can provide appropriate advices for investors.