Principles of Principles of

Engineering System DesignEngineering System Design

Dr T Asokan

asok@iitm.ac.in

Decision Making in System Design

• Columbia’s 28th mission was originally scheduled for launch in January 2001.

• Technical problems led to number of postponements (about 18) and finally set for 16th Jan. 2003.

• Some of the insulation tiles had come loose in the previous launches and many engineers felt that the launch should be postponed till it was rectified.

• Top level management took the decision to go ahead.• During the launch few tiles ripped off and possibly damaged

the wings. • Management decided to go ahead and not to interrupt the

mission.• With wing temperatures over 1500 and speed exceeding

mach 24, Columbia disintegrated while entering the atmosphere.

Columbia Disaster

Decision making in Systems Design Many important decisions are made during the development

process

Most of the decisions are not made via a rational, explicit

process

Many uncertainties are to be tackled while making decisions

An important point in decision making is that decisions have

to be made with the best information available at the time,

realizing that the outcomes associated with the decision

remain uncertain when the decision is made.

Level of detail needed to make decisions in the engineering of

a system and the level of detail needed to ensure proper

implementation of the system’s components and CIs need to

be understood clearly.

• Creative generation of alternatives

• Identification and quantification of multiple conflicting criteria

• Assessment and analysis of uncertainty associated with the what is known and what is unknown about the decision situation.

Elements of decision problems

Two approaches

• Lateral Thinking

• Vertical Thinking

Decision Making by Search Process

Axioms of Decision Analysis

• Probability: A common approach in engineering

• Order rule: Our preferences are well defined that any possible list of outcomes associated with the alternatives can be ordered from least preferred to most preferred on each objective in the fundamental objectives hierarchy. The ordered list must be transitive.

• Substitution rule: Willing to substitute any combination of outcomes if we are indifferent between them.

Example: Lottery

Pick six numbers out of 49.

Assume Rs 10,000,000 as prize money

Influence Diagrams and Decision Tree

Decision Trees

Should we have the function in SAC or OAT?Dry

wet

Regret

SAC

OAT

Relieved

Perfect

Disaster

Dry

wet

Expected Utility (SAC)= 0.7x0.65 +0.3x .75= 0.68

0

0.9

0.75

0.65

0.7

0.3

0.3

0.7

Expected Utility (OAT)= 0.7x0.9 +0.3x 0= 0.63

Example: 2

• A company is trying to decide whether to build a conventional or automated plant to produce a new product with an expected life of 10 yrs. The decision must be based on the size of the market for the product.

• Demand is expected to be any of the following 3 cases. – High during the first two years and if found unsatisfactory by the

users, low thereafter– High over the next 10 yrs– Low over the 10 years

INFLUENCE DIAGRAMS

• A graph-theoretic representation of a decision.• Four Nodes: Decision, chance, value and

deterministic• Directed arcs between the nodes• A marginal or conditional probability distribution

defined at each chance node, value node and deterministic node.

• Decision nodes as square boxes, Chance nodes as Oval, value nodes as square with rounded corners

Requirements allocation decision for elevator system

Hitech control

Hi Tech Power

Low risk

Cost Requirements

Performance requirements

Availability Requirements

Cost

Performance

Availability

Fundamental objectives

Power technology

Controller Technology

Risk Management

• Strategies– Avoidance, Transference, Management, Analysis

Risk Avoidance: Selection of low risk alternative

Risk Transference: Options that transfer the risk to others

Risk Management: Use of fall back options in case a riskier option fails

Risk Analysis: Addresses risk explicitly when decisions are made in uncertain situations.

Risk= Exposure to the chance of loss

Risk: The combination of the probability of an event occurring and the significance of the consequences of the event occurring.

Dealing with Risk: Activity of managing the risks through various processes

Risk Analysis

• Utility or Risk Preference Function

Win

.5

Loose

.5

$1000

$-10

Win

.1

Loose

.9

$100,000

$-10000

Certain Equivalent: The value the decision maker is willing to accept

EV (1)=490; EV (2)= 1000

• Risk Premium xp of an event is the difference between the expected value and the certain equivalent.

• Risk-Averse decision: xp > 0

~

XXX p

• Decision making under uncertainty is commonly encountered in various stages of system design

• Identification and quantification of conflicting criteria is very important.

• Various tools are available to help the designer in arriving at a decision

THANK YOU THANK YOU