Overview 

In the course of engineering design, project management, and other functions, engineers have to make decisions, almost always under time and budget constraints. Managing risk requires making decisions in the presence of uncertainty. In this course students will develop two critical skills: choosing the right alternative and executing the right decision-making process. These skills will help students improve decision making and reduce risk in their engineering activities and organizations. This course will cover material on individual decision making, decision-making processes, and risk management. The course will present techniques for making better decisions, for understanding how decisions are made, and for managing risk. Improving decision making requires identifying the most appropriate decision-making processes and learning how and when to use formal techniques. The course covers a variety of useful decision-making models that can screen alternatives and identify the best ones. In addition, the conversations and negotiations that are required to construct a model can enlighten decision-makers.

The course is designed for engineers and professionals who are comfortable with logical reasoning, calculation, probability, mathematics, and optimization, but it does not require advanced theoretical mathematics.

What you will learn

At the completion of this course, students will be able to do the following:

• Identify and organize the objectives relevant to a decision in order to frame the decision appropriately and uncover more alternatives 
• Use theoretically sound and practical approaches for evaluating and selecting alternatives in decisions with multiple objectives and uncertainty 
• Use techniques for group decision making and game theory that are useful in decisions that involve multiple people 
• Select a decision-making process that is appropriate for the context in order to avoid the problems that results from inappropriate processes 
• Evaluate the value of information and determine when gathering more information is actually useful to making a better a decision 
• Describe risk management processes and the options available for mitigating risk 
• Identify decision-making failures and the process for learning from failures 

Course content

Specific topics covered include:

Decision-making fundamentals 

• Contexts for decision making  
• Fundamental and means objectives  
• Measurement scales (nominal, ordinal, interval, and ratio) 

• Analytic Hierarchy Process  
• Multiattribute utility theory  
• Swing weighting  
• SGroup decision making  
• Borda count  
• Kemeny-Young method  
• Majority judgement  

• Aleatory and epistemic uncertainty  
• Assessing subjective probabilities  

• Stochastic dominance  
• Decision trees  
• Modeling risk aversion  
• Expected utility  

• Two-player zero-sum games  
• Mixed strategies for a zero-sum game  
• Mixed motive games  

• The incremental decision-making process  
• The contingency decision-making framework  
• Search  
• The secretary problem 

• Expected value of perfect information  
• Expected value of imperfect information  

• Risk treatment strategies  
• Potential problem analysis  
• Precursors, warnings  
• Receiver operating characteristic (ROC) curves  
• Risk communication 

• Types of failures  
• Transforming failure information into knowledge sensitivity analysis