Decisions

Question 1

What is a decision?

Answer 1

Irrevocable allocation of resources

Question 2

When does a company/government actually makes a decision?

Answer 2

Not when they think about the procurement of a product or a service, but when they sign a legally binding contract which obligates them to provide the ressources to the supplier of the product or service

Question 3

Can companies change their mind after a decision?

Answer 3

Of course, but they usually have a consequence (contract cancellation fees)

Question 4

Who makes decisions?

Answer 4

People vested with the authority and responsibility to make decisions for a company or organization. Typically the stakeholders who have to bear the future consequences of the decision.

Question 5

Easy vs hard decisions

Answer 5

Easy: few stakeholders, clear values, good alternatives readily identifiable and few uncertainties
Hard: complex alternatives, significant uncertainties, large consequences

Question 6

What are the concerns for engineers in the context of decision making?

Answer 6

Decisions they make are of high consequences to themsleves, their employer and society

Question 7

Explain in more details the high consequences of decisions for engineers.

Answer 7

Themselves: decisions will affect their job security, income and opportunity for advancement
Employers: Decisions will affect their employers’ profitability and performance
Society: affect the environment and health and safety of society

Question 8

2 broad categories of decisions for engineers

Answer 8

1. What should the design be: size, shape, structure, manufacturing process and components. What function to fulfill, requirements to satisfy… the design itself
2. How it should be done: Management decision controlling the progress of a design process. Activities happening, their sequence and who does it

Question 9

What is decision analysis?

Answer 9

According to prof Howard of Stanford Univ, it is a body of knowledge and professional practices for the logical illumination of decision problems
Or, philosophy and social-technical process to create value for decision makers and stakeholders facing difficult decisions involving multiple stakeholders, multiple (possibly conflicting) objective, complex alternatives, important uncertainties and significant consequences

Question 10

Good decision VS good outcome

Answer 10

Good decision: decision logically consistent with our preferences for the potential outcomes, our alternatives and our assessment of uncertainties
Good outcome: occurrence of a favorable event (one liked). repeated good decisions will lead to more good outcomes than otherwise

Question 11

Can luck affect outcomes

Answer 11

Yes, since there is uncertainty, bad decision can lead to good outcomes and good decisions may lead to bad outcomes

Question 12

What does an effective decision analyst must do?

Answer 12

understand the challenges of decision making in organizations, the mathematical foundations of decision analysis and the soft skills required to work with decision makers, stakeholders, and experts to perform a decision analysis

Question 13

What is a decision analyst?

Answer 13

An individual who uses the technical and soft skill of decision analysis

Question 14

What is a decision professional?

Answer 14

an individual who wants to learn and apply the decision analysis technical and soft skill that have been proven to help senior leader create value for their organizations

Question 15

What is a decision maker?

Answer 15

Leader vested with the responsibility and authority to make organizational decisions

Question 16

What is probability?

Answer 16

A mathematical theory of uncertainty based on 3 axioms

Question 17

What is a stakeholder?

Answer 17

Individual or party with a significant interest in a decision under consideration

Question 18

What is risk?

Answer 18

The potential outcome of an event, which is not known with certainty

Question 19

What is value?

Answer 19

A fair return or equivalent in goods, services, or money for something exchanged

Question 20

What are false assumptions that decision analysis practitioners sometimes make?

Answer 20

1. That people have little difficulty in making decisions.
2. thinking about alternatives, preferences and uncertainty comes naturally to those we are trying to help
3. Rational thought is the norm.
   while the reality is that regardless of how many well documented methodologies with proven theorems are provided, human decision makers are inconsistent

Question 21

Roy Gulick, a decision analyst coined the term “anatomical decision making” to describe the answers he gathered from decision makers to the question “ how do you make your decisions?”, what does it mean?

Answer 21

The response he received, usually, all had to do with every part of the body aside from the brain. Such as: top of my head, knee-jerk reaction, gut feeling…

Question 22

Humans are…? regarding decision making challenges

Answer 22

Inconsistent, irrational and subject to cognitive biases

Question 23

Reasons for poor decision making from human decision makers?

Answer 23

• Select inappropriate or irrelevant objectives
• Select wrong process
• Generate few, too many or useless alternatives
• evaluate alternatives using outdated/incomplete/incorrect info
• Select inferior alternatives, implement the chose one poorly
• Fail to learn from these mistakes

Question 24

Improvements to make better decisions?

Answer 24

• More relevant objectives
• Better alternatives
• More appropriate measures for evaluating alternatives
• More logical techniques for combining these values into a measure that better reflects the decision makers values and preferences

Question 25

What helps to achieve effective decision making? What impedes it?

Answer 25

• Bringing rational decision makers together with high quality info about alternatives an uncertainties
• Objective info based on data
• not always as rational as hoped
• quality info not always possible, erroneous and biased data may occur
• Best we can have is opinion advice and conjecture
• Ambiguous and conflicting objectives
• Additional constraints (time)

Question 26

What is the content complexity aspect of a decision problem?

Answer 26

ranges from few scenarios with little data and relatively stable setting to too many scenarios, many enterprises involved, and dynamic decision making setting

Question 27

What is the analytical complexity of decision making problems?

Answer 27

Range form deterministic problems with little uncertainty and few fundamental and means objective to problems with high degree of uncertainty, many alternatives and complicated hierarchy with many dependency

Question 28

What is the organizational complexity of a decision problem?

Answer 28

ranges from a single decision maker with a homogenous set of stakeholders to multiple decision makers requiring consensus and a diverse set f stakeholders with conflicting perspectives