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The Decision Analysis and Resolution (DAR) Process Terry Bahill Systems and Industrial Engineering University of Arizona ©, 2005-09,

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1 The Decision Analysis and Resolution (DAR) Process Terry Bahill Systems and Industrial Engineering University of Arizona ©, , Bahill This file is located at

2 Bahill2 CMMI  The CMMI model is a collection of best practices from diverse engineering companies.  Improvements to our organization will come from process improvements, not from people improvements or technology improvements.  CMMI provides guidance for improving an organization’s processes.  One of the CMMI process areas is Decision Analysis and Resolution, DAR.

3 Bahill3 DAR  Programs and Functions select the decision problems that require DAR and incorporate them in their program plans (e.g. SEMPs ).  DAR is a BAE SYSTEMS common process. Common processes are tools that the user gets, customizes and uses.  DAR is invoked throughout the whole program lifecycle whenever a critical decision is to be made.  DAR is invoked by IPT leads on programs, financial analysts, program core teams, etc.  Invoke the DAR Process in Webster work instructions, in gate reviews, in phase reviews or with other triggers, which can be used anytime in the system life cycle.

4 Bahill4 Webster BAE’s common processes are established by SP

5 Bahill5 Typical decisions  Decision problems that may require a formal decision process  Trade studies (eng_cat.shtml#GU0238)  Bid/no-bid  Make-reuse-buy (PW A017.html)  Fagan inspection versus checklist inspection (FM xls)  Tool selection  Vendor selection  Cost estimating

6 Bahill6 Purpose “In all decisions you gain something and lose something. Know what they are and do it deliberately.”

7 Bahill7 A Simple Model for Human Decision Making, Called Image Theory

8 Bahill8 References  The following description of image theory is based on Beach and Connolly (2005) and Bruce Gissing’s Roadmap to Business Excellence.  L. R. Beach and T. Connolly, The Psychology of Decision Making: People in Organizations, Sage Publications, Thousand Oaks, CA,  B. Gissing, The Roadmap to Business Excellence, g/RoadMap.ppt,  A. T. Bahill and B. Gissing, Re-evaluating systems engineering concepts using systems thinking, IEEE Transactions on Systems, Man, and Cybernetics, Part C: Applications and Reviews, SMC-28(4): , 1998.

9 Bahill9 Image theory *  Decision Makers (DMs) code their knowledge into three images.  The value image contains principles of behavior.  The trajectory image is the agenda of goals.  The strategic image contains the plans for implementing the goals.

10 Bahill10 The value image consists of the DM’s vision, mission, values, morals, ethics, beliefs, evaluation criteria and standards for how things should be and how people ought to behave.  Collectively these are called principles.  They limit  the goals that are worthy of pursuit and  acceptable ways of pursuing these goals.  Potential goals and actions that contradict the principles will be unacceptable.  It is called the value image because it represents the DM’s vision about the state of events that conforms most closely to his or her principles.

11 Bahill11 The trajectory image is the agenda of goals the DM wants to achieve.  The goals are dictated by the problem statement, principles, opportunities, desires, competitive issues and gaps encountered in the environment.  The goals are fed back to the value image.  The DM’s goal agenda is called the trajectory image, because it is his or her vision about how the future should unfold.

12 Bahill12 The strategic image contains the plans for implementing the goals.  Each plan has two aspects:  tactics are the concrete behavioral aspects that deal with local environment conditions,  forecasts are the anticipation of the future that describe what might result if the tactics are successful.  The plans are also fed back to the value image.  The collection of plans is called the strategic image, because it represents the DM’s vision of what he or she is trying to do to achieve the goals on the trajectory image.

13 Bahill13 Framing * means embedding observed events in a context that gives them meaning.  The DM uses contextual information to probe his or her memory to find image constituents that are relevant to the decision at hand.  This provides information about the goals and plans that were previously pursued in this context.  If a similar goal is being pursued this time, then the plan that was used before may be reused.

14 Bahill14 Two types of decisions  Adoption decisions determine whether to add new goals to the trajectory image or new plans to the strategic image.  Progress decisions determine whether a plan is making progress toward achieving a goal.

15 Bahill15 Adoption decisions  A new goal or plan can be added if it is compatible with the DM’s relevant principles, does not introduce unacceptable risk and does not interfere with existing goals or ongoing plans.  Adoption decisions are accomplished by  screening potential goals and plans one by one in light of relevant principles, existing goals and ongoing plans. If only one option passes screening, it is adopted.  If two or more options pass the screen, then a tradeoff study determines the best option from among the survivors.  Screening is the more common of these decision mechanism.

16 Bahill16 Progress decisions use the plan to forecast the future.  If that future includes achieving a goal, then the plan is retained.  If the forecast does not include achieving the goal, then the plan is rejected and a new plan is adopted in its place.

17 Bahill17 Two decision mechanisms  The incompatibility test screens options based on how well they fit the DM’s images.  The profitability test focuses on the quality of the outcomes associated with the options.

18 Bahill18 The incompatibility test screens options (plans and goals) based on their incompatibility with constituents* defined in the three images.  Each option’s incompatibility increases as a function of the weighted sum of the number of violations.**  Violations are defined as negations, contradictions, preventions, retardations or any other form of interference with the realization one of the images’ constituents.  If the weighted sum of the violations exceeds some rejection threshold, then the option is rejected, otherwise it is adopted.

19 Bahill19 Profitability test  When more than one option survives the incompatibility screen, the DM chooses the best using a profitability test.  The profitability test is not a single decision mechanism.  It is a repertory of strategies such as maximizing subjective expected utility, satisficing and performing tradeoff studies.  The selected strategy depends on  characteristics of the choice,  characteristics of the environment,  characteristics of the DM.

20 Bahill20 Image theory for organizations *  Decisions in organizations are made by individual DMs, often forming a consensus.  So for organizational decisions, we can use the individual decision making model that we have just developed.  The only major addition is the need for a case for change.

21 Bahill21 The need for change *  People do not make good decisions.  A careful tradeoff study will help you overcome human ineptitude and thereby make better decisions.

22 Bahill22 Rational decisions *  One goal  Perfect information  The optimal course of action can be described  This course maximizes expected value  This is a prescriptive model. We tell people that, in an ideal world, this is how they should make decisions.

23 Bahill23 Satisficing *  When making decisions there is always uncertainty, too little time and insufficient resources to explore the whole problem space.  Therefore, people cannot make rational decisions.  The term satisficing was coined by Noble Laureate Herb Simon in  Simon proposed that people do not attempt to find an optimal solution. Instead, they search for alternatives that are good enough, alternatives that satisfice.

24 Bahill24 Humans are not rational * 1  Mark Twain said,  “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”  Humans are often very certain of knowledge that is false.  What American city is directly north of Santiago Chile?  If you travel from Los Angeles to Reno Nevada, in what direction would you travel?  Most humans think that there are more words that start with the letter r, than there are with r as the third letter.

25 Bahill25 Illusions *  We call these cognitive illusions.  We believe them with as much certainty as we believe optical illusions.

26 Bahill26 The Müller-Lyer Illusion *

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29 Bahill29 Humans judge probabilities poorly *

30 Bahill30 Monty Hall Paradox 1 *

31 Bahill31 Monty Hall Paradox 2 *

32 Bahill32 Monty Hall Paradox 3 *

33 Bahill33 Monty Hall Paradox 4 *

34 Bahill34 Monty Hall Paradox 5 *  Now here is your problem.  Are you better off sticking to your original choice or switching?  A lot of people say it makes no difference.  There are two boxes and one contains a ten- dollar bill.  Therefore, your chances of winning are 50/50.  However, the laws of probability say that you should switch.

35 Bahill35 Monty Hall Paradox 6 *  The box you originally chose has, and always will have, a one-third probability of containing the ten- dollar bill.  The other two, combined, have a two-thirds probability of containing the ten-dollar bill.  But at the moment when I open the empty box, then the other one alone will have a two-thirds probability of containing the ten-dollar bill.  Therefore, your best strategy is to always switch!

36 Bahill36 Utility  We have just discussed the right column, subjective probability.  Now we will discuss the bottom row, utility

37 Bahill37 Utility  Utility is a measure of the happiness, satisfaction or reward a person gains (or loses) from receiving a good or service.  Utilities are numbers that express relative preferences using a particular set of assumptions and methods.  Utilities include both subjectively judged value and the assessor's attitude toward risk.

38 Bahill38 Risk  Systems engineers use risk to evaluate and manage bad things that could happen, hazards. Risk is measured with the frequency (or probability) of occurrence times the severity of the consequences.  However, in economics and in the psychology of decision making, risk is defined as the variance of the expected value, uncertainty.* p1p1 x1x1 p2p2 x2x2 Risk, uncertainty A1.0$10 $0none B0.5$50.5$15$10$5medium C0.5$10.5$19$10$9high

39 Bahill39 Ambiguity, uncertainty and hazards*  Hazard: Would you prefer my forest picked mushrooms or portabella mushrooms from the grocery store?  Uncertainty: Would you prefer one of my wines or a Kendall-Jackson merlot?  Ambiguity: Would you prefer my saffron and oyster sauce or marinara sauce?

40 Bahill40 Humans are not rational  Even if they had the knowledge and resources, people would not make rational decisions, because they do not evaluate utility rationally.  Most people would be more concerned with a large potential loss than with a large potential gain. Losses are felt more strongly than equal gains.  Which of these wagers would you prefer to take?* $2 with probability of 0.5 and $0 with probability 0.5 $1 with probability of 0.99 and $1,000,000 with probability $3 with probability of and -$1,999,997 with probability  They all have an expected value of $1

41 Bahill41 Gains and losses are not valued equally *

42 Bahill42 Subjective expected utility combines two subjective concepts: utility and probability.  Utility is a measure of the happiness or satisfaction a person gains from receiving a good or service.  Subjective probability is the person’s assessment of the frequency or likelihood of the event occurring.  The subjective expected utility is the product of the utility times the probability.

43 Bahill43 Subjective expected utility theory models human decision making as maximizing subjective expected utility  maximizing, because people choose the set of alternatives with the highest total utility,  subjective, because the choice depends on the decision maker’s values and preferences, not on reality (e.g. advertising improves subjective perceptions of a product without improving the product), and  expected, because the expected value is used.  This is a first-order model for human decision making.  Sometimes it is called Prospect Theory*.

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45 Bahill45 Why teach tradeoff studies?  Because emotions, cognitive illusions, biases, fallacies, fear of regret and use of heuristics make humans far from ideal decision makers.  Using tradeoff studies judiciously can help you make rational decisions.  We would like to help you move your decisions from the normal human decision-making lower- right quadrant to the ideal decision-making upper- left quadrant.

46 Bahill46 The Decision Analysis and Resolution Proces (DAR)

47 Bahill47 Specific goals (SG) A specific goal applies to a process area and addresses the unique characteristics that describe what must be implemented to satisfy the process area. The specific goal for the DAR process area is SG 1Evaluate Alternatives.

48 Bahill48 Specific practices (SP)  A specific practice is an activity that is considered important in achieving the associated specific goal.  Practices are the major building blocks in establishing the process maturity of an organization.

49 Bahill49 Specific Practice Number DAR Specific Practice Name Example 1.1Decide if formal evaluation process is warranted When to do a trade study 1.2 Establish Evaluation Criteria What is in a good trade study 1.3Identify Alternative Solutions 1.4Select Evaluation Methods 1.5Evaluate Alternatives 1.6Select Preferred Solutions

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51 Bahill51 When creating a process  the most important facets are  illustrating tasks that can be done in parallel  suggesting feedback loops  including a process to improve the process  configuration management

52 Bahill52 A simple tradeoff study

53 Bahill53 Decisions  Humans make four types of decisions:  Allocating resources among competing projects*  Making plans, which includes scheduling  Negotiating agreements  Choosing amongst alternatives  Alternatives can be examined in series or parallel.  When examined in series it is called sequential search  When examined in parallel it is called a tradeoff or a trade study  “Tradeoff studies address a range of problems from selecting high-level system architecture to selecting a specific piece of commercial off the shelf hardware or software. Tradeoff studies are typical outputs of formal evaluation processes.”*

54 Bahill54 History Ben Franklin’s letter* to Joseph Priestly outlined one of the first descriptions of a tradeoff study.

55 Bahill55 Tradeoff Study Process * These tasks are drawn serially, but they are not performed in a serial manner. Rather, it is an iterative process with many feedback loops, which are not shown. Decide if Formal Evaluation is Needed Decide if Formal Evaluation is Needed Problem Statement Problem Statement Select Evaluation Methods Select Evaluation Methods Establish Evaluation Criteria Establish Evaluation Criteria Identify Alternative Solutions Identify Alternative Solutions Proposed Alternatives Proposed Alternatives Evaluation Criteria Evaluation Criteria Evaluate Alternatives Evaluate Alternatives Select Preferred Solutions Select Preferred Solutions Formal Evaluations Formal Evaluations Perform Expert Review Perform Expert Review Preferred Solutions Preferred Solutions Present Results Present Results Put In PPAL Put In PPAL ∑

56 Bahill56 Decide if Formal Evaluation is Needed Decide if Formal Evaluation is Needed Problem Statement Problem Statement Select Evaluation Methods Select Evaluation Methods Establish Evaluation Criteria Establish Evaluation Criteria Identify Alternative Solutions Identify Alternative Solutions Proposed Alternatives Proposed Alternatives Evaluation Criteria Evaluation Criteria Evaluate Alternatives Evaluate Alternatives Select Preferred Solutions Select Preferred Solutions Formal Evaluations Formal Evaluations Perform Expert Review Perform Expert Review Preferred Solutions Preferred Solutions Present Results Present Results Put In PPAL Put In PPAL

57 Bahill57 Is formal evaluation needed? SP 1.1 Companies should have polices for when to do formal decision analysis. Criteria include  When the decision is related to a moderate or high- risk issue  When the decision affects work products under configuration management  When the result of the decision could cause significant schedule delays  When the result of the decision could cause significant cost overruns  On material procurement of the 20 percent of the parts that constitute 80 percent of the total material costs

58 Bahill58 Guidelines for formal evaluation, SP 1.1  When the decision is selecting one or a few alternatives from a list  When a decision is related to major changes in work products that have been baselined  When a decision affects the ability to achieve project objectives  When the cost of the formal evaluation is reasonable when compared to the decision’s impact  On design-implementation decisions when technical performance failure may cause a catastrophic failure  On decisions with the potential to significantly reduce design risk, engineering changes, cycle time or production costs

59 Bahill59 Establish Evaluation Criteria Decide if Formal Evaluation is Needed Decide if Formal Evaluation is Needed Problem Statement Problem Statement Select Evaluation Methods Select Evaluation Methods EstablishEvaluationCriteria Identify Alternative Solutions Identify Alternative Solutions Proposed Alternatives Proposed Alternatives Evaluation Criteria Evaluation Criteria Evaluate Alternatives Evaluate Alternatives Select Preferred Solutions Select Preferred Solutions Formal Evaluations Formal Evaluations Perform Expert Review Perform Expert Review Preferred Solutions Preferred Solutions Present Results Present Results Put In PPAL Put In PPAL

60 Bahill60 Establish evaluation criteria * SP 1.2  Establish and maintain criteria for evaluating alternatives  Each criterion must have a weight of importance  Each criterion should link to a tradeoff requirement, i.e. a requirement whose acceptable value can be more or less depending on quantitative values of other requirements.  Criteria must be arranged hierarchically. The top-level may be performance, cost, schedule and risk.  Program Management should prioritize these four criteria at the beginning of the project and make sure everyone knows the priorities.  All companies should have a repository of generic evaluation criteria.

61 Bahill61 What will you eat for lunch today?  In class exercise.  Write some evaluation criteria that will, help you decide.*

62 Bahill62 Killer trades  Evaluating alternatives is expensive.  Therefore, early in tradeoff study, identify very important requirements* that can eliminate many alternatives.  These requirements produce killer criteria.**  Subsequent killer trades can often eliminate 90% of the possible alternatives.

63 Bahill63 Identify Alternative Solutions Decide if Formal Evaluation is Needed Decide if Formal Evaluation is Needed Problem Statement Problem Statement Select Evaluation Methods Select Evaluation Methods Establish Evaluation Criteria Establish Evaluation Criteria IdentifyAlternativeSolutions Proposed Alternatives Proposed Alternatives Evaluation Criteria Evaluation Criteria Evaluate Alternatives Evaluate Alternatives Select Preferred Solutions Select Preferred Solutions Formal Evaluations Formal Evaluations Perform Expert Review Perform Expert Review Preferred Solutions Preferred Solutions Present Results Present Results Put In PPAL Put In PPAL

64 Bahill64 Identify alternative solutions, SP 1.3  Identify alternative solutions for the problem statement  Consider unusual alternatives in order to test the system requirements*  Do not list alternatives that do not satisfy all mandatory requirements**  Consider use of commercial off the shelf and in- house entities***

65 Bahill65 What will you eat for lunch today?  In class exercise.  List some alternatives for today’s lunch.*

66 Bahill66 Select Evaluation Methods Decide if Formal Evaluation is Needed Decide if Formal Evaluation is Needed Problem Statement Problem StatementSelectEvaluationMethods Establish Evaluation Criteria Establish Evaluation Criteria Identify Alternative Solutions Identify Alternative Solutions Proposed Alternatives Proposed Alternatives Evaluation Criteria Evaluation Criteria Evaluate Alternatives Evaluate Alternatives Select Preferred Solutions Select Preferred Solutions Formal Evaluations Formal Evaluations Perform Expert Review Perform Expert Review Preferred Solutions Preferred Solutions Present Results Present Results Put In PPAL Put In PPAL

67 Bahill67 Select evaluation methods, SP 1.4  Select the source of the evaluation data and the method for evaluating the data  Typical sources for evaluation data include approximations, product literature, analysis, models, simulations, experiments and prototypes*  Methods for combining data and evaluating alternatives include Multi-Attribute Utility Technique (MAUT), Ideal Point, Search Beam, Fuzzy Databases, Decision Trees, Expected Utility, Pair- wise Comparisons, Analytic Hierarchy Process (AHP), Financial Analysis, Simulation, Monte Carlo, Linear Programming, Design of Experiments, Group Techniques, Quality Function Deployment (QFD), radar charts, forming a consensus and Tradeoff Studies

68 Bahill68 Collect evaluation data  Using the appropriate source (approximations, product literature, analysis, models, simulations, experiments or prototypes) collect data for evaluating each alternative.

69 Bahill69 Evaluate Alternatives Decide if Formal Evaluation is Needed Decide if Formal Evaluation is Needed Problem Statement Problem Statement Select Evaluation Methods Select Evaluation Methods Establish Evaluation Criteria Establish Evaluation Criteria Identify Alternative Solutions Identify Alternative Solutions Proposed Alternatives Proposed Alternatives Evaluation Criteria Evaluation Criteria EvaluateAlternatives Select Preferred Solutions Select Preferred Solutions Formal Evaluations Formal Evaluations Perform Expert Review Perform Expert Review Preferred Solutions Preferred Solutions Present Results Present Results Put In PPAL Put In PPAL

70 Bahill70 Evaluate alternatives, SP 1.5  Evaluate alternative solutions using the evaluation criteria, weights of importance, evaluation data, scoring functions and combining functions.  Evaluating alternative solutions involves analysis, discussion and review. Iterative cycles of analysis are sometimes necessary. Supporting analyses, experimentation, prototyping, or simulations may be needed to substantiate scoring and conclusions.

71 Bahill71 Select Preferred Solutions Decide if Formal Evaluation is Needed Decide if Formal Evaluation is Needed Problem Statement Problem Statement Select Evaluation Methods Select Evaluation Methods Establish Evaluation Criteria Establish Evaluation Criteria Identify Alternative Solutions Identify Alternative Solutions Proposed Alternatives Proposed Alternatives Evaluation Criteria Evaluation Criteria Evaluate Alternatives Evaluate AlternativesSelectPreferredSolutions Formal Evaluations Formal Evaluations Perform Expert Review Perform Expert Review PreferredSolutions Present Results Present Results Put In PPAL Put In PPAL

72 Bahill72 Select preferred solutions, SP 1.6  Select preferred solutions from the alternatives based on evaluation criteria.  Selecting preferred alternatives involves weighing and combining the results from the evaluation of alternatives. Many combining methods are available.  The true value of a formal decision process might not be listing the preferred alternatives. More important outputs are stimulating thought processes and documenting their outcomes.  A sensitivity analysis will help validate your recommendations.

73 Bahill73 Perform Expert Review Decide if Formal Evaluation is Needed Decide if Formal Evaluation is Needed Problem Statement Problem Statement Select Evaluation Methods Select Evaluation Methods Establish Evaluation Criteria Establish Evaluation Criteria Identify Alternative Solutions Identify Alternative Solutions Proposed Alternatives Proposed Alternatives Evaluation Criteria Evaluation Criteria Evaluate Alternatives Evaluate Alternatives Select Preferred Solutions Select Preferred Solutions Formal Evaluations Formal Evaluations Perform Expert Review Perform Expert Review Preferred Solutions Preferred Solutions Present Results Present Results Put In PPAL Put In PPAL ∑

74 Bahill74 Perform expert review 1  Formal evaluations should be reviewed* at regular gate reviews such as SRR, PDR and CDR or by special expert reviews  Technical reviews started about the same time as Systems Engineering, in The concept was formalized with MIL-STD-1521 in  Technical reviews are still around, because there is evidence that they help produce better systems at less cost.  The Perform Expert Review process is located at PS0303

75 Bahill75 Perform expert review 2  Technical reviews evaluate the product of an IPT*  They are conducted by a knowledgeable board of specialists including supplier and customer representatives  The number of board members should be less than the number of IPT members  But board expertise should be greater than the IPT’s experience base

76 Bahill76 Who should come to the review?  Program Manager  Chief Systems Engineer  Review Inspector  Lead Systems Engineer  Domain Experts  IPT Lead  Facilitator  Stakeholders for this decision  Builder  Customer  Designer  Tester  PC Server  Depending on the decision, the Lead Hardware Engineer and the Lead Software Engineer

77 Bahill77 Present results Present the results* of the formal evaluation to the original decision maker and other relevant stakeholders.

78 Bahill78 Put in the PAL  Formal evaluations reviewed by experts should be put in the organizational Process Asset Library (PAL) or the Project Process Asset Library (PPAL) (e.g. GDE 11 for M601)  Evaluation data for tradeoff studies come from approximations, analysis, models, simulations, experiments and prototypes. Each time better data is obtained the PAL should be updated.  Formal evaluations should be designed with reuse in mind.

79 Bahill79 Manage the DAR process  The DAR Process Owner shall manage and improve the DAR process.  The DAR Process Owner will establish a change control board and review the DAR Common Process on a regular basis. This is a high-level review of the DAR Common Process. This review must evaluate the activities, status and results of the DAR process. For instance, it might address use of and training for the many methods of performing DAR.

80 Bahill80 Closed Book Quiz, 5 minutes Fill in the empty boxes Problem Statement Problem Statement Proposed Alternatives Proposed Alternatives Evaluation Criteria Evaluation Criteria Formal Evaluations Formal Evaluations Preferred Solutions Preferred Solutions ∑

81 Bahill81 Tradeoff Study Example

82 Bahill82 Example: What method should we use for evaluating alternatives? *  Is formal evaluation needed? SP 1.1  Check the Guidance for Formal Evaluations  We find that many of its criteria are satisfied including “On decisions with the potential to significantly reduce design risk … cycle time...”  Establish evaluation criteria, SP 1.2  Ease of Use  Familiarity  Killer criterion  Engineers must think that use of the technique is intuitive.

83 Bahill83 Example (continued) 1  Identify alternative solutions, SP 1.3  Linear addition of weight times scores, Multiattribute Utility Theory (MAUT).* This method is often called a “trade study.” It is often implemented with an Excel spreadsheet.  Analytic Hierarchy Process (AHP)**

84 Bahill84 Example (continued) 2  Select evaluation methods, SP 1.4  The evaluation data will come from expert opinion  Common methods for combining data and evaluating alternatives include:  Multi-Attribute Utility Technique (MAUT), Decision Trees, Analytic Hierarchy Process (AHP), Pair-wise Comparisons, Ideal Point, Search Beam, etc.  In the following slides we will use two methods: linear addition of weight times scores (MAUT) and the Analytic Hierarchy Process (AHP)*

85 Bahill85 Example (continued) 3  Evaluate alternatives, SP 1.5  Let the weights and evaluation data be integers between 1 and 10, with 10 being the best. The computer can normalize the weights if necessary.

86 Bahill86 Multi-Attribute Utility Technique (MAUT) 1 Assess evaluation data* row by row

87 Bahill87 Multi-Attribute Utility Technique (MAUT) 2

88 Bahill88 Analytic Hierarchy Process (AHP)

89 Bahill89 AHP, make comparisons Create a matrix with the criteria on the diagonal and make pair-wise comparisons*

90 Bahill90 AHP, compute weights  Create a matrix  Square the matrix  Add the rows  Normalize*

91 Bahill91 In-class exercise  Use these criteria to help select your lunch today.  Closeness, distance to the venue. Is it in the same building, the next building or do you have to get in a car and drive?  Tastiness, including gustatory delightfulness, healthiness, novelty and savoriness.  Price, total purchase price including tax and tip.

92 Bahill92 To help select lunch today 1  closeness is ??? more important than tastiness,  closeness is ??? more important than price,  tastiness is ??? more important than price. ClosenessTastinessPrice Closeness Tastiness Price

93 Bahill93 To help select lunch today 2  closeness is strongly more important (5) than tastiness,  closeness is very strongly more important (7) than price,  tastiness is moderately more important (3) than price. ClosenessTastinessPrice Closeness157 Tastiness13 Price1

94 Bahill94 To help select lunch today 3 ClosenessTastinessPriceWeight of Importance Closeness Tastiness1/ Price1/71/310.08

95 Bahill95 AHP, get scores Compare each alternative on the first criterion

96 Bahill96 AHP, get scores 2 Compare each alternative on the second criterion

97 Bahill97 AHP, form comparison matrix ** Combine with linear addition*

98 Bahill98 Example (continued) 4  Select Preferred Solutions, SP 1.6  Linear addition of weight times scores (MAUT) was the preferred alternative  Now consider new criteria, such as Repeatability of Result, Consistency*, Time to Compute  Do a sensitivity analysis

99 Bahill99 Sensitivity analysis, simple In terms of Familiarity, MAUT was strongly preferred (5) over the AHP. Now change this 5 to a 3 and to a 7. •Changing the scores for Familiarity does not change the recommended alternative. •This is good. •It means the Tradeoff study is robust with respect to these scores.

100 Bahill100 Sensitivity analysis, analytic Compute the six semirelative-sensitivity functions, which are defined as which reads, the semirelative-sensitivity function of the performance index F with respect to the parameter  is the partial derivative of F with respect to  times  with everything evaluated at the normal operating point (NOP).

101 Bahill101 Sensitivity analysis 2 For the performance index use the alternative rating for MAUT minus the alternative rating for AHP* F = F 1 - F 2 = Wt 1 ×S 11 + Wt 2 ×S 21 – Wt 1 ×S 12 –Wt 2 ×S 22

102 Bahill102 Sensitivity analysis 3 The semirelative-sensitivity functions* S 11 is the most important parameter. So go back and reevaluate it.

103 Bahill103 Sensitivity analysis 4  The most important parameter is the score for MAUT on the criterion Ease of Use  We should go back and re-evaluate the derivation of that score

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105 Bahill105 Example (continued) 5  Perform expert review of the tradeoff study.  Present results to original decision maker.  Put tradeoff study in PAL.  Improve the DAR process.  Add some other techniques, such as AHP, to the DAR web course  Fix the utility curves document  Add image theory to the DAR process  Change linkages in the documentation system  Create a course, Decision Making and Tradeoff Studies

106 Bahill106 Quintessential example A Tradeoff Study of Tradeoff Study Tools is available at StudyOfTradeoffStudyTools.doc

107 Bahill107 Generic goals (GG)  Achievement of a generic goal in a process area signifies improved control in planning and implementing the processes associated with that process area.  Generic goals are called “generic” because the same goal statement appears in (almost) all process areas.  Each process area has only one generic goal for each maturity level.  And the generic goal is different for each maturity level.

108 Bahill108 Maturity level 2 generic goal  GG 2: The DAR process is institutionalized as a managed process.  A managed process is a performed process that is planned and executed in accordance with policy; employs skilled people having adequate resources to produce controlled outputs; involves relevant stakeholders; is monitored, controlled, and reviewed; and is evaluated for adherence to its process description.

109 Bahill109 Maturity level 3 generic goal  GG 3 The DAR process is institutionalized as a defined process.  A defined process is establish by tailoring the selected process according to the organization’s tailoring guidelines to meet the needs of a project or organizational function. With a defined process, variability in how the process is performed across the organization is reduced and process assets, data, and learning can be effectively shared.

110 Bahill110 Generic practices (GP)  Generic practices contribute to the achievement of the generic goal when applied to a particular process area.  Generic practices are activities that ensure that the processes associated with the process area will be effective, repeatable, and lasting.

111 Bahill111 Generic practices 1  GP 2.1: Establish an Organizational Policy, Establish and maintain an organizational policy for planning and performing the DAR process.  The BAE solution  SP Organizational Business Practices  OM A001 Perform Decision Analysis and Resolution  RW A004 Perform Formal Evaluation  RF 1 Quantitative Methods for Tradeoff Analyses.doc  …  RF 12 Manage and Improve the DAR Process.doc These documents are located at Users at Bluelnk\Bludfs001\Shared\Users\Bahill_AT\Draft DAR Process Docs And O:\ENGR_LIB\SysPCRDocs\Reference Docs

112 Bahill112 Generic practices 2  GP 3.1 Establish and maintain the description of a defined decision analysis and resolution process.  BAE company compliance documents  SP Organizational Business Practices  OM A001 Perform Decision Analysis and Resolution  RW A004 Perform Formal Evaluation  BAE program implementation evidence  Tailoring reports, program plans and trade studies with evidence of use of SP 1.2 to 1.6.

113 Bahill113 Generic practices 3  GP 2.2: Plan the Process, Establish and maintain the plan for performing the DAR process.

114 Bahill114 Generic practices 4  GP 2.3: Provide Resources, Provide adequate resources for performing the DAR process, developing the work products, and providing the services of the process.  GP 2.4: Assign Responsibility, Assign responsibility and authority for performing the process, developing the work products, and providing the services of the DAR process.  GP 2.5: Train People, Train the people performing or supporting the DAR process as needed.

115 Bahill115 Generic practices 5  GP 2.6: Manage Configurations, Place designated work products of the DAR process under appropriate levels of configuration management.  GP 2.7: Identify and Involve Relevant Stakeholders, Identify and involve the relevant stakeholders of the DAR process as planned.  GP 2.8: Monitor and Control the Process, Monitor and control the DAR process against the plan for performing the process and take appropriate corrective action.

116 Bahill116 Generic practices 6  GP 3.2Collect Improvement Information such as work products, measures, measurement results, and improvement information derived from planning and performing the decision analysis and resolution process to support the future use and improvement of the organization’s processes and process assets.

117 Bahill117 Generic practices 7  GP 2.9: Objectively Evaluate Adherence, Objectively evaluate adherence of the DAR process against its process description, standards, and procedures, and address noncompliance.  GP 2.10: Review Status with Higher Level Management, Review the activities, status, and results of the DAR process with higher level management and resolve issues.

118 Bahill118 Example Examples of trade studies are given in O:\ENGR_LIB\DAR\DAR Training\Web-based DAR Course\dar_index.html

119 Bahill119 Webster Tradeoff Study References  Utility Curves (Trade-off Study) FM  Evaluate Design Solutions RW A010  Trade-off Study Matrix (template) FM

120 Bahill120 Webster DAR References  Organizational Business Practices SP  Perform Decision Analysis and Resolution OM A001  Perform Formal Evaluation RW A004  RF.QM Tradeoff Analyses  RF.Decide Formal Evaluation  RF.Guide Formal Evaluations  RF.Other DAR Methods  RF.Establish Evaluation Criteria  RF.ID Alternative Solutions  RF.Select Evaluation Methods  RF.Evaluate Alternatives  RF.Select Preferred Solutions  RF.Expert Review of Trade off Studies  RF.Retention Formal Decisions  RF.Manage Improve DAR

121 Bahill121

122 Bahill122 How to print  To print this file, do this one time.  View  Color/grayscale  Grayscale  Settings  Light grayscale  Close grayscale view


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