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Engineering Decision Making and Risk Management

Book Description

Emphasizes practical issues and examples of decision making with applications in engineering design and management

Featuring a blend of theoretical and analytical aspects, Engineering Decision Making and Risk Management presents multiple perspectives on decision making to better understand and improve risk management processes and decision-making systems.

Engineering Decision Making and Risk Management uniquely presents and discusses three perspectives on decision making: problem solving, the decision-making process, and decision-making systems. The author highlights formal techniques for group decision making and game theory and includes numerical examples to compare and contrast different quantitative techniques. The importance of initially selecting the most appropriate decision-making process is emphasized through practical examples and applications that illustrate a variety of useful processes. Presenting an approach for modeling and improving decision-making systems, Engineering Decision Making and Risk Management also features:

  • Theoretically sound and practical tools for decision making under uncertainty, multi-criteria decision making, group decision making, the value of information, and risk management

  • Practical examples from both historical and current events that illustrate both good and bad decision making and risk management processes

  • End-of-chapter exercises for readers to apply specific learning objectives and practice relevant skills

  • A supplementary website with instructional support material, including worked solutions to the exercises, lesson plans, in-class activities, slides, and spreadsheets

  • An excellent textbook for upper-undergraduate and graduate students, Engineering Decision Making and Risk Management is appropriate for courses on decision analysis, decision making, and risk management within the fields of engineering design, operations research, business and management science, and industrial and systems engineering. The book is also an ideal reference for academics and practitioners in business and management science, operations research, engineering design, systems engineering, applied mathematics, and statistics.

    Note: The ebook version does not provide access to the companion files.

    Table of Contents

    1. Cover
    2. Title Page
    3. Copyright
    4. Dedication
    5. Preface
    6. Chapter 1: Introduction to Engineering Decision Making
      1. 1.1 Introduction
      2. 1.2 Decision Making in Engineering Practice
      3. 1.3 Decision Making and Optimization
      4. 1.4 Decision Making and Problem Solving
      5. 1.5 Decision Making and Risk Management
      6. 1.6 Problems in Decision Making
      7. 1.7 The Value of Improving Decision Making
      8. 1.8 Perspectives on Decision Making
      9. Exercises
      10. References
    7. Chapter 2: Decision-Making Fundamentals
      1. 2.1 Decision Characteristics
      2. 2.2 Objectives in Decision Making
      3. 2.3 Influence Diagrams
      4. 2.4 Rationality
      5. 2.5 Dominance
      6. 2.6 Choice Strategies
      7. 2.7 Making Tradeoffs
      8. 2.8 Reframing the Decision
      9. 2.9 Risk Acceptance
      10. 2.10 Measurement Scales
      11. Exercises
      12. References
    8. Chapter 3: Multicriteria Decision Making
      1. 3.1 Pugh Concept Selection Method
      2. 3.2 Analytic Hierarchy Process
      3. 3.3 Multiattribute Utility Theory
      4. 3.4 Conjoint Analysis
      5. 3.5 Value of A Statistical Life
      6. 3.6 Compensation
      7. 3.7 The Impact of Changing Weights
      8. Exercises
      9. References
    9. Chapter 4: Group Decision Making
      1. 4.1 Ranking
      2. 4.2 Scoring and Majority Judgment
      3. 4.3 Arrow's Impossibility Theorem
      4. Exercises
      5. References
    10. Chapter 5: Decision Making Under Uncertainty
      1. 5.1 Types of Uncertainties
      2. 5.2 Assessing a Subjective Probability
      3. 5.3 Imprecise Probabilities
      4. 5.4 Cumulative Risk Profile and Dominance
      5. 5.5 Decision Trees: Modeling
      6. 5.6 Decision Trees: Determining Expected Values
      7. 5.7 Sequential Decision Making
      8. 5.8 Modeling Risk Aversion
      9. 5.9 Robustness
      10. 5.10 Uncertainty Propagation: Sensitivity Analysis
      11. 5.11 Uncertainty Propagation: Method of Moments
      12. 5.12 Uncertainty Propagation: Monte Carlo Simulation
      13. Exercises
      14. References
    11. Chapter 6: Game Theory
      1. 6.1 Game Theory Basics
      2. 6.2 Zero-Sum Games
      3. 6.3 Optimal Mixed Strategies for Zero-Sum Games
      4. 6.4 The Minimax Theorem
      5. 6.5 Resource Allocation Games
      6. 6.6 Mixed Motive Games
      7. 6.7 Bidding
      8. 6.8 Stackelberg Games
      9. Exercises
      10. References
    12. Chapter 7: Decision-Making Processes
      1. 7.1 Decision-Making Contexts
      2. 7.2 Technical Knowledge and Problem Consensus
      3. 7.3 Optimization: Search and Evaluation
      4. 7.4 Diagnosing Risk Decision Situations
      5. 7.5 Values and Ethics
      6. 7.6 Systematic Decision-Making Processes
      7. 7.7 The Decision-Making Cycle
      8. 7.8 The Analytic-Deliberative Process
      9. 7.9 Concept Selection
      10. 7.10 Decision Calculus
      11. 7.11 Recognition-Primed Decision Making
      12. 7.12 Heuristics
      13. 7.13 Unconscious Decision Making
      14. 7.14 Search
      15. 7.15 Types of Search in Practice
      16. 7.16 Secretary Problem
      17. 7.17 Composite Decisions
      18. 7.18 Separation
      19. 7.19 Product Development Processes
      20. Exercises
      21. References
    13. Chapter 8: The Value of Information
      1. 8.1 The Expected Value of Perfect Information
      2. 8.2 The Expected Value of Imperfect Information
      3. 8.3 Experimentation to Reduce Ambiguity
      4. 8.4 Experimentation to Compare Alternatives
      5. 8.5 Experimentation to Compare Alternatives with Multiple Attributes
      6. Exercises
      7. References
    14. Chapter 9: Risk Management
      1. 9.1 Risk Management Process
      2. 9.2 Potential Problem Analysis
      3. 9.3 Risk Management Guide for DOD Acquisition
      4. 9.4 Risk Management at NASA
      5. 9.5 Precursors
      6. 9.6 Warnings
      7. 9.7 Risk Communication
      8. 9.8 Managing The Risk of A Bad Decision
      9. 9.9 Learning From Failures
      10. 9.10 Transforming Failure Information
      11. Exercises
      12. References
    15. Chapter 10: Decision-Making Systems
      1. 10.1 Introduction to Decision-Making Systems
      2. 10.2 Mechanisms of Organization Influence
      3. 10.3 Roles in Decision-Making Systems
      4. 10.4 Information Flow
      5. 10.5 The Structure of Decision-Making Systems
      6. 10.6 Product Development Organizations
      7. 10.7 Information Flow in Product Development
      8. 10.8 The Design Factory
      9. Exercises
      10. References
    16. Chapter 11: Modeling and Improving Decision-Making Systems
      1. 11.1 Modeling Decision-Making Systems
      2. 11.2 Rich Pictures
      3. 11.3 Swimlanes
      4. 11.4 Root Definitions
      5. 11.5 Conceptual Models
      6. 11.6 Models of Product Development Organizations
      7. 11.7 Improving Decision-Making Systems
      8. 11.8 An Integrative Strategy
      9. Exercises
      10. References
    17. Index
    18. End User License Agreement