8.5 Decision Making...Decision Making Steps 1. Establish the objectives. 2. Rank the objectives. 3....
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Dr. Tarek A. Tutunji Engineering Skills, Philadelphia University 8.5 Decision Making Dr. Tarek A. Tutunji Philadelphia University, Jordan
Transcript of 8.5 Decision Making...Decision Making Steps 1. Establish the objectives. 2. Rank the objectives. 3....
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
8.5 Decision MakingDr. Tarek A. Tutunji
Philadelphia University, Jordan
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Overview In the previous sequence, the importance of team
work and team building was discussed.
In this sequence, an important activity for successful managers, Decision Making, will be presented.
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Definition Decision making is a
thinking processes that results in selecting a course of action among several alternatives.
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
How to make a decision? Flip a coin.
Pray for guidance.
Let somebody else make the decision.
Accept the first (and obvious) option that might achieve the desired result.
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Decision Making Steps1. Establish the objectives.
2. Rank the objectives.
3. Search for information.
4. Develop alternative choices.
5. Evaluate all alternatives against the objectives.
6. Choose the alternative that provides best results.
7. Implement and control.
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Discussion of Steps1. Establish objectives
Outline goals and objectives.
Objectives must be measurable
See exactly what needs to be accomplished.
2. Rank the objectives Give a score of each objective according to its importance.
3. Search for information Gather data.
Establish evidence to reach solutions.
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Discussion of Steps4. Develop alternative choices
Brainstorm to develop alternatives.
Consider more than one solution.
5. Evaluate alternatives against the objectives List pros and cons of each alternative.
Eliminate solutions that have more cons than pros.
6. Choose Make the decision.
Pick the one that has many pros, and the one that everyone can agree with.
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Discussion of Steps7. Implement and Control
Immediately take action.
Control actions that are required to implement the decision.
Prevent possible adverse consequences.
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Keys to good decisions Have a broad perspective.
Commit.
Be rational
Be transparent.
Consult with team on decisions.
Think before you act, but don’t hesitate.
Make sound, timely decisions.
Be firm on your decisions.
Give clear directions.
Establish mechanism to correct mistakes.
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Decision Tables Decision tables are tabular form that presents a set of
alternatives (conditions) and their corresponding values (actions).
Make a list of values.
Make a list of alternatives.
Draw a table.
Compute total value.
Select the alternative with the highest total value.
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Reference: The three secrets of wise decision making by Barry Anderson
Courage, Creativity, and Balance
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
PrototypingKnowledge
30
PCBKnowledge
30
Project Management
Skills
40
Total
100
IndustrialEngineer
25 20 35 80
ElectricalEngineer
20 28 27 75
Assume a company is looking to hire an engineer to
manage a prototyping PCB center.
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Risk Management Risk management is the
identification and assessment of risks that help in making decisions that minimize impact of unfortunate events or maximize the realization of opportunities.
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Decision Tree Decision trees are decision support tools that use
tree-like graphs of decisions and their possible consequences. They often include chance event outcomes and probability calculations.
Decision trees help identify a strategy most likely to reach a goal.
Another use of decision trees is as a descriptive means for calculating conditional probabilities.
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Decision Tree Example A medical company manufactures tablets.
The company is expected its profit to be $50,000 if economy is good
$30,000 if economy is bad
A manager is considering installing a new system (at a cost of $70,000) to increase production. In this scenario, the profit is expected to be $150,000 if the economy improves
$80,000 if economy remains unchanged
Chances for a good economy is 20% , bad economy is 80%
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Buy New System
Cost : $70,000
Do Not Buy
Cost: 0
Good Economy
20%
Bad Economy
80%
Good Economy
20%
Bad Economy
80%
Profit $150,000
Profit $80,000
Profit $50,000
Profit $30,000
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Buy New System
Cost : $70,000
Do Not Buy
Cost: 0
Good Economy, 20%
Bad Economy, 80%
Good Economy, 20%
Bad Economy, 80%
Profit $150,000
Profit $80,000
Profit $50,000
Profit $30,000
Expected Profit (with new system) = (0.20 x $150,000 + 0.80 x $80,000) - $70,000
=$24,000
Expected Profit (without new system) = 0.20 x $50,000 + 0.80 x $30,000
=$34,000
Since $34,000 is the larger number Decision is Not to buy new system
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Techniques for identifying risks Documentation Review
A review of relevant project documents associated with current and previous projects. If a plan is inconsistent with requirements, it can be a source potential risks.
Information Gathering Techniques
Brainstorming, researching, interviewing, and SWOT analysis.
Assumption Analysis
Identify risks by reviewing inconsistencies or inaccuracies in project assumptions.
Diagramming Techniques
Flow charts, cause and affect diagrams, and event chain diagrams.
Other
Duration and cost of activities, Lags between tasks, Resource allocation, Calendars, Work breakdown structures
Dr. Tarek A. TutunjiEngineering Skills, Philadelphia University
Conclusions In this sequence, Decision Making was presented.
7 steps for sound decision making were discussed.
Simple examples of Decision Tables and Decision Trees were provided.
