Value-Added Decision Making for Managers

Developed from the authors' longstanding course on decision and risk analysis, Value-Added Decision Making for Managers explores the important interaction between decisions and management action and clarifies the barriers to rational decision making. The authors analyze strengths and weaknesses of the best alternatives, enabling decision makers to improve on these alternatives by adding value and reducing risk. The core of the text addresses decisions that involve selecting the best alternative from diverse choices. The decisions include buying a car, picking a supplier or home contractor, selecting a technology, picking a location for a manufacturing plant or sports stadium, hiring an employee or selecting among job offers, deciding on the size of a sales force, making a late design change, and sourcing to emerging markets. The book also covers more complex decisions arising in negotiations, strategy, and ethics that involve multiple dimensions simultaneously. Numerous activities interspersed throughout the text highlight real-world situations, helping readers see how the concepts presented can be used in their own work environment or personal life. Each chapter also includes discussion questions and references. Web ResourceThe book's website at http://ise.wayne.edu/research/decision.php offers tutorials of Logical Decisions software for multi-objective decisions and Precision Tree software for probabilistic decisions. Directions for downloading student versions of the DecisionTools Suite and Logical Decisions software can be found in the appendices. Password-protected PowerPoint presentations for each chapter and solutions to all of the numeric examples are available for instructors.

Kenneth Chelst is a professor of operations research and director of engineering management programs in the Department of Industrial and Systems Engineering at Wayne State University. An Edelman Award finalist, he is also co-principal investigator of the NSF-funded Project MINDSET and a senior consultant for the International City and County Management Association. He earned a Ph.D. in operations research from MIT. His research interests include engineering management, emergency service management, global engineering, and the use of operations research to enhance K-12 mathematics education. Yavuz Burak Canbolat is a senior manager in the Decision Support Group at Abbott Laboratories. He was previously an associate manager in decision analysis for Merck & Co., Inc., and an instructor in the Industrial Engineering Department at Qafqaz University. He earned a Ph.D. in industrial engineering from Wayne State University. His research interests include decision analysis and operations research techniques in R&D portfolio evaluation and management, strategic planning, financial and economic analysis, global operations and logistics, risk analysis, and capacity planning.

STRUCTURING HARD DECISIONS: The Case for a Structured Analytic Decision Process. Framing Decisions with Influence Diagrams. Common Decision Templates. DECISIONS WITH MULTIPLE OBJECTIVES: Structure Decisions with Multiple Objectives. Structured Trade-Offs for Multiple Objective Decisions: Multi-Attribute Utility Theory. Value and Risk Management for Multi-Objective Decisions. Multiple Objective Decisions with Limited Data: Analytical Hierarchy Process. DECISIONS AND MANAGEMENT UNDER UNCERTAINTY: Value-Added Risk-Management Framework and Strategies. Spreadsheet Simulation for Decisions with Uncertainty. Decisions with Uncertainty: Decision Trees. Structured Risk Management and the Value of Information and Delay. Risk Attitude and Utility Theory. CHALLENGES TO "RATIONAL" DECISIONS: Forecast Bias and Expert Interviews. Decision Bias. DECISIONS WITH MULTIPLE PERSPECTIVES: Value-Added Negotiations. Ethical Decisions. Strategic Direction, Planning, and Decision Making. Appendices. Index.