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12 Introduction decision conferencing and problems involving the allocation of resources between competing areas of an organization. Major errors in decision making can arise because the original decision problem has been incorrectly framed. In particular, in strategic decision making the decision can be formulated in a way which fails to take into account fundamental changes that have occurred in the organization’s environment. The result can be overconfident decisions which are made on the basis of outdated assumptions. Framing problems and the cognitive inertia that can be associated with them are discussed in Chapter 14, while Chapter 15 shows how scenario planning, an alternative way of dealing with uncertainty, can help to alert decision makers to possible environmental changes. In Chapters 16 and 17 other alternative forms of decision support, such as the analytic hierarchy process, bootstrapping and expert systems are contrasted with the other decision-aiding methods we have covered in the book. Chapter 17 also looks at the key questions that a decision maker should consider in order to maximize the effectiveness of decision-aiding methods and concludes with a summary of the types of problems that the different methods are designed to address. References 1. Keeney, R. L. (1982) Decision Analysis: An Overview, Operations Research, 30, 803–838. 2. Phillips, L. D. (1989) Decision Analysis in the 1990’s, in A. Shahini and R. Stainton (eds) Tutorial Papers in Operational Research (1989), Operational Research Society, Birmingham. 3. For a wide-ranging survey of decision analysis applications see: Keefer, D. L., Kirkwood, C. W. and Corner, J. L. (2002) Decision Applications in the Operations Research Literature, 1990–2001. Department of Supply Chain Management, Arizona State <strong>University</strong>, Tempe, Arizona, and Keefer, D. L., Kirkwood, C. W. and Corner, J. L. (in press) Perspective on Decision Analysis Applications, Decision Analysis. 4. Krumm, F. V. and Rolle, C. F. (1992) Management and Application of Decision and Risk Analysis in Du Pont, Interfaces, 22, 84–93. 5. French, S., Kelly, N. and Morrey, M. (1992) Towards a Shared Understanding. How Decision Analysis Helped Structure Decision Problems in the International Chernobyl Project, OR Insight, 5(4), 23–27. 6. French, S. (1996) Multi-Attribute Decision Support in the Event of a Nuclear Accident, Journal of Multi-Criteria Decision Analysis, 5, 39–57. 7. Hess, S. W. (1993) Swinging on the Branch of a Tree: Project Selection Applications, Interfaces, 23, 5–12.
References 13 8. Walls, M. R., Morahan, G. T. and Dyer, J. S. (1995) Decision Analysis of Exploration Opportunities in the Onshore US at Phillips Petroleum Company, Interfaces, 25, 39–56. 9. Quaddus, M. A., Atkinson, D. J. and Levy, M. (1992) An Application of Decision Conferencing to Strategic Planning for a Voluntary Organization, Interfaces, 22, 61–71. 10. Buede, D. M. and Bresnick, T. A. (1992) Applications of Decision Analysis to the Military Systems Acquisition Process, Interfaces, 22, 110–125. 11. Belton, V. (1993) Project Planning and Prioritization in the Social Services – An OR Contribution, Journal of the Operational Research Society, 44, 115–124. 12. Marples, C. and Robertson, G. (1993) Option Review with HIVIEW, OR Insight, 6(3), 13–18. 13. Hämäläinen, R. and Leikola, O. (1996) Spontaneous Decision Conferencing with Top-Level Politicians, OR Insight, 9(1), 24–28. 14. Phillips, L. D. (1989) People-Centred Group Decision Support, in G. Doukidis, F. Land and G. Miller (eds) Knowledge Based Management Support Systems, Ellis Horwood, Chichester.
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Page 10 and 11: viii Contents Chapter 16 The analyt
Page 12 and 13: x Foreword real problems, and it is
Page 14 and 15: xii Preface accountancy, where rece
Page 17 and 18: 1 Introduction Complex decisions Im
Page 19 and 20: The role of decision analysis 3 you
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Page 27: Overview of the book 11 and profit.
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62 Decisions involving multiple obj
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72 Introduction to probability Beca
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74 Introduction to probability prac
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76 Introduction to probability we w
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78 Introduction to probability whet
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80 Introduction to probability give
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82 Introduction to probability prob
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84 Introduction to probability deci
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86 Introduction to probability that
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88 Introduction to probability inte
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90 Introduction to probability subj
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92 Introduction to probability (5)
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94 Introduction to probability (a)
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96 Decision making under uncertaint
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98 Decision making under uncertaint
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100 Decision making under uncertain
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6 Decision trees and influence diag
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Constructing a decision tree 145 be
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Determining the optimal policy 147
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Decision trees and utility 149 succ
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Decision trees involving continuous
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Practical applications of decision
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Assessment of decision structure 15
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Assessment of decision structure 15
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Eliciting decision tree representat
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Eliciting decision tree representat
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Summary 163 where the resulting dec
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Exercises 165 other elements of the
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Exercises 167 (b) Assuming that Wes
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Exercises 169 is not hired, given t
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Exercises 171 failing to meet the p
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Exercises 173 why it was rational f
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Exercises 175 (11) In the Eagle Mou
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References 177 ABC Chemicals are pl
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7 Applying simulation to decision p
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Monte Carlo simulation 181 Of cours
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Monte Carlo simulation 183 Table 7.
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Applying simulation to a decision p
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Applying simulation to investment d
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Summary 205 Hull 10 ), some of them
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Exercises 207 (c) Use your simulati
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Exercises 209 For each factor the f
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Exercises 211 (b) Suppose that your
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References 213 6 million Therefore
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216 Revising judgments in the light
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9 Biases in probability assessment
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Introduction 249 of people watching
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The availability heuristic 251 make
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The representativeness heuristic 25
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The anchoring and adjustment heuris
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The anchoring and adjustment heuris
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Other judgmental biases 263 Other j
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Is human probability judgment reall
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Exercises 271 Did you receive timel
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References 273 have been taken from
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References 275 18. Hamilton, D. L.
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10 Methods for eliciting probabilit
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Preparing for probability assessmen
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Consistency and coherence checks 28
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Assessment of the validity of proba
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Assessment of the validity of proba
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Assessing probabilities for very ra
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Exercises 293 Odds in favor of even
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References 295 13. Wright, G. and W
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298 Risk and uncertainty management
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310 Decisions involving groups of i
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330 Resource allocation and negotia
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14 Decision framing and cognitive i
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How people frame decisions 357 Figu
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Imposing imaginary constraints and
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Inertia in strategic decision makin
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Studies in the psychological labora
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Overcoming inertia? 369 it is diffi
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Discussion questions 373 frame anal
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References 375 References 1. Luchin
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15 Scenario planning: an alternativ
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Introduction 379 documented in Chap
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Scenario construction: the extreme-
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Using scenarios in decision making
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Using scenarios in decision making
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Scenario construction: the driving
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Case study of a scenario interventi
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Table 15.1 - The components of the
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Illustrative case study 403 (b) Att
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Illustrative case study 405 Stage 4
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Illustrative case study 407 importa
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Conclusion 409 combinations. Often
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References 411 2. Van der Heijden,
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414 The analytic hierarchy process
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17 Alternative decision-support sys
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Expert systems 429 generally agreed
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Expert systems 431 that knowledge e
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Expert systems 433 (1) That the sub
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Expert systems 435 information syst
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Expert systems 437 to focus on ‘t
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Expert systems 439 On the basis of
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Is there any intention/expectation
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Expert systems 443 described above
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Expert systems 445 body of knowledg
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Statistical models of judgment 447
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Comparisons 453 ‘broken leg’ cu
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Some final words of advice 455 Ques
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Some final words of advice 457 of t
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References 459 Table 17.1 - Summary
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References 461 20. Eisenhart, J. (1
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Chapter 3 Suggested answers to sele
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Suggested answers to selected quest
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472 Index Brown, C.E. 446 Brown, S.
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474 Index HIVIEW 58 Hodgkinson, G.P
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476 Index scenario intervention cas
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