This book provides a blend of quantitative and qualitative approaches to decision making, while also bridging the gap between the theory of how to make good decisions versus how people actually make decisions. The authors present the tools and techniques of decision analysis to learn how to become a FOCCUSSED decision maker:
- Identify and properly Frame the decision or problem at hand
- Specify the goals, Objectives, and values that you are trying to achieve
- Develop creative, meaningful Choices from among which you can choose
- Evaluate the Consequences of selecting each alternative using your goals, objectives, and values
- Think about the key Uncertainties that could impact the decision
- Understand the Swaps and trade-offs that you are willing to make
- Develop an approach for implementing your Solution
- Elicit the data you’ll need from a variety of sources
- and Disseminate and communicate your decisions to others.
The authors define a decision as the choice among alternatives, based on how we value and trade-off their pros and cons, made in the face of uncertainty about what will actually happen. The decision-making process is presented as having three pillars to support the decision maker: Preferences–what we prefer, what meets our goals and objectives, and the recognition that preferences are personal to the one making the decision; Alternatives–the choices, options, or courses of action that we have, and over which we have some degree of control; and Information–what we know about the situation, what we don’t know, how we connect choices to outcomes, and how we deal with uncertainty. Key components of good decision-making include how to define your goals and objectives, how to incorporate uncertainties that we all face, and how to develop better alternatives, all of which are discussed. Sophisticated techniques are presented in a way that is accessible to the average decision maker. Probability theory is utilized to improve decisions, and uncertainties are captured in decision trees. Risk avoidance, risk transfer, and risk mitigation are also discussed. Readers will gain a clear understanding of how to articulate the goals and objectives that should be the focal point of any decision.
Author(s): Terry Bresnick, Omar Periu
Series: Synthesis Lectures on Operations Research and Applications
Publisher: Springer
Year: 2022
Language: English
Pages: 158
City: Cham
Preface
Acknowledgments
Contents
About the Authors
1 Introduction
1.1 What is a Decision?
1.2 Defining a Good Decision
1.3 Post-Script from Omar
1.4 We are Not Very Good at Making Decisions
1.5 FOCCUSSED Decision-Making
1.6 The Intended Audience for this Book
2 Framing the Decision
2.1 Problem Analysis
2.2 Case Study: Mike and Maddie Rose—Framing the Problem
2.3 Case Study: The Frequent Flier—Framing the Problem
2.4 Articulating the Vision
2.5 Identifying Key Issues and Stakeholders
2.6 The Decision Hierarchy
2.7 Rapid Recap: Framing the Decision
3 Understanding Objectives and Values
3.1 Value-Focused Thinking: Understanding Objectives and Values
3.2 Screening Criteria
3.3 How Can We Identify Objectives?
3.4 Case Study: Strategic Planner Wendi Lee–Identifying Objectives
3.4.1 Maximize Effective Computing Capability
3.4.2 Minimize Life-Cycle Costs
3.5 Case Study: Buying a House—Developing Objectives
3.6 Case Study: Mike and Maddie—Developing Objectives
3.6.1 Maximize Long-Term Wealth from Franchise Ownership
3.6.2 Maximize the Enjoyment of the Franchisee Experience
3.6.3 Provide an Economically Viable Business Opportunity
3.7 Rapid Recap: Understanding Objectives and Values
4 Creating Choices
4.1 Developing Better Choices
4.2 The Strategy Table
4.3 Case Study: Insurance Professional Aliza Leiter—Developing the Strategy Table
4.4 Barriers to the Creative Process
4.5 Case Study: Mike and Maddie—Developing the Strategy Table
4.6 Post-Script from Omar on Choices—Omar and Indie
4.7 Rapid Recap: Creating Choices
5 Identifying Consequences
5.1 Identifying Consequences and Measuring Values
5.2 Case Study: Wendi Lee—Comparing Choices
5.3 Developing Scoring Scales
5.4 Case Study: Wendi Lee—Developing Value Scales
5.5 Case Study: Mike and Maddie—Developing Value Scales
5.6 Rapid Recap: Identifying Consequences
6 Incorporating Uncertainty
6.1 How Good Are You at Thinking About Probability?
6.2 A Short Course in Thinking Probabilistically
6.3 Using Probability Theory to Improve Decisions
6.4 Case Study: Whiplash! Go to Court Versus Settle—Andrea Merle, the Attorney
6.5 Andrea’s Decision Tree
6.6 Estimating Probabilities
6.7 Case Study: Flip or Flop—Michele Michaels, the Real Estate Investor
6.8 Michele’s Decision Tree
6.9 Case Study: Mike and Maddie—Capturing Uncertainty in a Decision Tree
6.10 Mike and Maddie Use a Decision Tree to Refine Their Choice
6.11 Incorporating Risk into the Decision
6.12 Rapid Recap: Dealing with Uncertainty
7 Making Swaps and Trade-Offs
7.1 Case Study: Wendi Lee—Developing Weights for Trade-Offs
7.2 Techniques for Developing Swing Weights
7.3 Case Study: Mike and Maddie—Developing Swing Weights and Exploring Swaps
7.4 Franchising Post Script from Omar
7.5 Rapid Recap: Swaps and Trade-Offs
8 Selecting Solutions
8.1 Decisions as Socio-Technical Processes
8.2 Generating Better Solutions Than the Apparent “Best Solution”
8.3 Knowing When to Stop Analyzing and to Start Implementing
8.4 Case Study: Mike and Maddie–a Re-Look Leads to a Better Decision
8.5 Rapid Recap: Selecting Solutions
9 Eliciting Data: Making Your Decision-Making Processes More Productive
9.1 Structured Data Gathering Techniques
9.2 Characteristics of a Good Facilitator
9.3 Omar’s Tips for Better Meetings
9.4 Rapid Recap: Eliciting Data—Making Your Decision-Making Processes More Meaningful and Productive
10 Disseminating and Communicating Your Decisions
10.1 What Determines Good Communication?
10.2 Developing Communications Strategies
10.3 Rapid Recap: Communicating Your Decisions to Others
11 FOCCUSSED Decision Making Wrap-Up
Appendix A: Solutions for Math Nerds to the Chapter 6 Probability Problems
Appendix B: Omar’s Deal Flip Template
Appendix C: Our Favorite Commercial Off-the-Shelf Decision Analysis Software Packages
Endnotes
References
Index
