Slide1: How to Make A Decision: Applications to Engineering Trade Studies Dr. Steve Walter Department of Engineering October 23, 2006 ^ Really Good


Table of Contents: Table of Contents Attributes of a good decision Decision making process Requirements and goals Importance of stakeholders Defining alternatives Ranking goals Figure of merits Quantifying risk Comparison of alternatives Making the choice Documenting it. Summary


Attributes of a Good Decision: Attributes of a Good Decision Rely on well-defined stakeholder preferences Based on objective information Consider all alternatives Quantitative Balanced against risk Transparent Documented


The Route to a Good Decision: The Route to a Good Decision


Requirements and Goals: Requirements and Goals Requirements are needs or “musts” Good requirements are: Clear Concise Attainable Verifiable Terminology: Requirements use “shall” Usually defined with inequalities Goals are “desirements” or “wants” Good goals are: Clear Concise Not impossible Verifiable Terminology: Goals use “should.” Usually defined with inequalities Requirements determines who races, Goals determines who come in first.


An Example: Choosing a Family Sedan: An Example: Choosing a Family Sedan Needs and Wants for a Family Car The car must be a sedan The car must not be too expensive It must have four doors It must get good gas mileage It must have cruise control It must have a in-dash navigation system It must have leather seats It must be safe It must have a large trunk It must be comfortable Good Requirements and Goals for a Family Car Pick and quantify the requirements It shall be a sedan The price shall be less than $30,000 It shall have four doors It shall have cruise control Pick and quantify the goals The in-city gas mileage should be > 25 mph It should have a in-dash navigation system It should have leather seats It should have frontal and side impact NHTSA five star rating It should have a trunk that is > 14 cu. ft. It should have five-axis seat adjustments


Information Gathering is Key: Information Gathering is Key


Stakeholders Determine Requirements and Goals: Stakeholders Determine Requirements and Goals Developers Manufacturing Users


Engineering Requirements and Goals: Engineering Requirements and Goals


Develop Alternatives: Choosing a Space Antenna: Develop Alternatives: Choosing a Space Antenna Three types of antennas meet the requirements for a future space mission Deployable Cassegrain Fixed Cassegrain Off-axis Parabola Large Aperture Lightweight Moderate Sidelobes Low Cost No Development Risk No Deployment Risk Excellent Sidelobes Moderate Cost No Deployment Risk


Ranking Goals: Ranking Goals Assessing goal importance and assigning weights are the next step The Kepner and Tregoe ranking system 1-10 scale Pick the most important goal and rank it a “10.” Then compare the next most important set of goals and see if they deserve a “10,” if not give them a “9” or less. Work through all goals until each of them have a ranking Pie chart Create a pie chart and assign a goal to each wedge Adjust the size of each wedge until the area of each wedge is consistent with the goal’s importance The Size of each wedge is the weighting Key stakeholders use a consensus process to establish goal weights


Goal Rankings: Goal Rankings Antenna Goals The effective aperture should be greater than 90 sq ft. The sidelobes should be less than -30 db The deployment risk should be low The cost of development should be less than $ 15M The antenna should weigh less than 40 lbs The list of goals are distributed to the customer and system engineering team to determine their ranking


Quantifying How Well an Alternative Meets a Goal: Quantifying How Well an Alternative Meets a Goal Figure of merit translates measurable attributes into a number Ranges from 1 to 10 Requires clear and verifiable goals Spans from the requirement to (or through) the goal Yes/no choices: Yes = 1 and No = 0


Risk 101: Risk 101 Risk: The “cumulative effect of uncertain occurrences that may negatively or positively affect objectives Uncertainty: An indefinite or indeterminate quantity “Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns -- the ones we don't know we don't know.” – Donald Rumsfeld Risk management deals with “known unknown”


Risk Examples – 102: Risk Examples – 102 Examples of Risk Events Technical Piston rings do not hold specified pressure Power supply has wrong connector Deployable antenna doesn’t open Organizational Key people are not available to work on project Planned test or mfg equipment is not available External Customer cancels contract due to convenience Lightning strike (i.e., Verizon) or Earthquake Government safety standards change Printer breaks when you need to print the final report Purchases Vendor does not deliver a product on time Subcontractor key staff quits or goes out on strike (Government assigns 20% - 40% weight to past performance.) Galileo’s antenna did not deploy limiting data return


Quantifying Risk 103: Quantifying Risk 103 Risk has three components Description of the risk event Probability of occurrence or likelihood Severity or impact Can be scored on a five-point scale Quantified in dollars, days of delay, units of performance, etc. Likelihood “1” ≤ 5% 5% 10% overrun Power Severity “1” ~ No impact “2” ≤ 2% HP 2% HP 6% HP


Risk 104: Risk 104 Computer Risks Disk drive crash Likelihood: 2, Severity: 5 Product: 10, Normalized: 6 Existing software can’t read the file format Likelihood: 3, Severity: 2 Product 6, Normalized: 7.6 Network connection goes down Likelihood: 4, Severity: 3 Product 12 Normalized: 5.2 Computer crash causes loss of active files Likelihood: 2, Severity: 2 Product: 4, Normalized: 8.4 Flight attendant spills a drink into your laptop ‘frying’ the keyboard Likelihood: 1, Severity: 5 Product: 5, Normalized: 8 Likelihood Severity 1 2 3 4 5 1 2 3 4 5


Caveats – Risk 105: Caveats – Risk 105 Risk Responses Lessen Severity and Likelihood Mitigate Identify a contingency that will reduce severity or likelihood Transfer Make the severity or likelihood someone else’s problem Avoid Recast solution space to eliminate the problem Accept Risk Tolerance is Determined by Stakeholders


Determining the Figure of Merit: Choosing a Space Antenna: Determining the Figure of Merit: Choosing a Space Antenna Total Figure of Merit + + + +


Space Antenna Options Comparison: Space Antenna Options Comparison Total Figures of Merit


Adverse Consequences: Adverse Consequences If risk has been explicitly included in the determining the figure of merit it needs to be incorporated after the comparison Removing Risk from the equation we get: Risk Tolerance is determined by stakeholders After considering adverse consequences a choice can be made


Documentation: Documentation Documented items Date of decision Decision maker Problem or decision statement Requirements and goals Considered alternatives Goal weights and rankings Comparison Risks Choice The decision that has not been documented is not a decision A documented problem/decision statement complete with a description of alternatives


Summary: Attributes of a Good Decision: Summary: Attributes of a Good Decision Rely on well-defined stakeholder preferences Based on objective information Consider all alternatives Quantitative Balanced against risk Transparent Documented


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