From the Preface

This book presents methods for strategically making decisions using quantitative, spreadsheet-based, decision analysis methods. The intended audience is anyone responsible for decision making in an organizational setting, and the book provides a framework for thinking about decisions strategically, as well as practical tools that the reader can immediately apply. The book is suitable for use in classes on decision making, as well as for self-study.

Rules of thumb, intuition, tradition, and simple finantial analysis are often no longer sufficient for addressing such common decisions as make-versus-buy, facility site selection, and process redesign. In general, the forces of competition are imposing a need for more effective decision making at all levels in organizations. The ongoing restructuring of businesses and other organizations increases the usefulness of the material in this book for a wide range of managers, analysts, and engineers. Traditionally, strategic decisions involving multiple competing objectives and significant uncertainties have been considered primarily the concern of top executives. However, with the current emphasis on downsizing and flattening organizations, individuals at lower levels in organizations must be concerned with such tradeoffs as cost versus quality, cost versus timeliness, or market share versus short-term return on investment.

The methods in this book have been applied for over twenty-five years, and they have a demonstrated capability to improve decision making. The methods have traditionally been considered advanced, in part because early presentations were framed in a mathematical terminology that is not familiar to many managers, and in part because early implementations of the methods required specialized software. This book brings the methods to a breader audience by explaining the intuitive basis for the methods, as well as how to implement them using spreadsheets.

Contents

1. Making Decisions Strategically

2. Structuring Objectives

3. Developing Alternatives

4. Multiobjective Value Analysis

5. Thinking about Uncertainty

6. Decisions with Uncertainty

7. Multiple Objectives and Uncertainty

8. Resource Allocation

9. Multiattribute Preference Theory

Appendices

A. Case: Computer Networking Strategy

B. Scenario Planning for Decision Making

C. Probability Elicitation Interview

D. Interdependent Uncertainties