Chapters 8 and 9 . Fundamentals of Decision Making & Planning and Decision Aids. OVERVIEW CHAPTER 8 . What is Decision Making Conditions that affect decision making The Differences between decision types Understanding how goals relate to decision making
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Fundamentals of Decision Making
Planning and Decision Aids
The condition under which individuals are fully informed about a problem, alternative solutions are obvious, and the possible results of each solution are clear.
The condition under which an individual does not have the necessary information to assign probabilities to the outcome of alternative solutions.Certainty vs. Uncertainty
Determines the likelihood that a specific outcome will occur based on hard facts and numbers.
Example: examining past records
Determines the likelihood that a specific outcome will occur, based on personal judgments and beliefs
This varies between individuals based on expertise, intuition, etc.Objective vs Subjective Probability
An individual’s tendency…
1) Listening to the media.
2) Assuming things are going to return to the way they used to be.
4) Tunnel Vision
STEP 1: Questionnaire is sent to a group of experts.
STEP 2: Summary of the first round is prepared.
STEP 3: Summary of the second round is prepared.
Adapted from Figure 9.1
*process, strategies, products, and
Planning: goals, what to change, how to know
Check: look at results
Act: implement and perform
* Continuously repeated for improvement
Source: Adapted from E. S. Fine. Pareto diagrams get to the root of process problems. Quality, October 1996, available at www.qualitymag.com/1096ql (January 16, 1998).
Mon Tue Mon Wed Thu Wed Tue Fri Thu Fri
1 2 2 1 1 2 1 1 2 2
Adapted from Figure 9.6
Program Evaluation and Review Technique
- Method of sequencing activities and estimating cost and time for project completion
First use: 1958 – Polaris missile
* “most likely time”
* “optimistic time”
* “pessimistic time”
* “expected time”
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