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Engineering Economics: Huma Fawad Hitec, Taxila SEPTEMBER 2021-JANUARY 2022
Engineering Economics: Huma Fawad Hitec, Taxila SEPTEMBER 2021-JANUARY 2022
HITEC , TAXILA
SEPTEMBER 2021–JANUARY 2022
ENGINEERING ECONOMICS
LECTURE 2
1
What is Decision Making?
2
Decision Making
1. What is
Decision Making? 2. Barriers to Good
Decision Making
3. Decision
Making Process
4. Decision Making
Tools
What is Decision Making?
2. Gather Information Successful decision makers explore all of the possible choices of
the situation.
3. Analyze Situation In fact many of the less obvious choices turn out to be the most
4. Develop Options effective ones.
In many cases, we may lack sufficient information to make an
informed decision.
6. Select the preferred Synthesize all what you learned in previous steps and make a
conclusion that you believe to be your “best” choice.
alternatives
7. Act on decision and Once you have selected your best choice, you need to develop
and implement a specific and concrete plan of action.
monitor the results,
As you begin taking the steps in your plan, you will discover that
making necessary adjustments need to be made.
adjustments.
Decision Making Tools
• Orienting SWOTs to An Objective - If SWOT analysis does not start with defining a
desired end state or objective, it runs the risk of being useless.
• If a clear objective has been identified, SWOT analysis can be used to help in the
pursuit of that objective. In this case, SWOTs are:
Strengths Weaknesses
Attributes of the organization Attributes of the
that are helpful to achieving the organization that are harmful
objective. to achieving the objective.
Opportunities Threats
External conditions that are External conditions that are
helpful to achieving the harmful to achieving the
objective. objective.
SWOT Analysis – Creative Use
Opportunities Threats
How can we Exploit each How can we Defend against
Opportunity? each Threat?
Source: http://en.wikipedia.org/wiki/SWOT_Analysis
SWOT Analysis – Internal and External
Factors
• The aim of any SWOT analysis is to identify the key
internal and external factors that are important to
achieving the objective. SWOT analysis groups key pieces
of information into two main categories:
Strengths
Internal
Internal Factors
Factors
Organization
Organization
Weaknesses
Opportunities
External
External Factors
Factors
External
External Environment
Environment
Threats
SWOT Analysis – Errors to Be Avoided
• Force Field Analysis is best carried out in small group of about six to eight people
using flip chart paper or overhead transparencies so that everyone can see what is
going on.
• The first step is to agree the area of change to be discussed. This might be written
as a desired policy goal or objective.
• All the forces in support of the change are then listed in a column to the left
(driving the change forward) while all forces working against the change are listed
in a column to the right (holding it back).
• The driving and restraining forces should be sorted around common themes and
should then be scored according to their 'magnitude', ranging from one (weak) to
five (strong).
• The score may well not balance on either side.
Force field analysis
Ishikawa Diagram (fishbone)
Six Thinking Hats
Adversarial Thinking
A B
Parallel Thinking
A
B
Six Thinking Hats
Parallel Thinking
Spear
Snake
A wise man was passing by and he saw this. He stopped and asked
them, "What is the matter?" They said, "We cannot agree to what
the elephant is like.“
The wise man calmly explained to them, "All of you are right. The
reason every one of you is telling it differently is because each one
of you touched a different part of the elephant. So, actually the
elephant has all those features.“
"Oh!" everyone said. There was no more fight. They felt happy
that they were all right.
Six Thinking Hats
Parallel Thinking
White Hat
Blue Hat
Red Hat
Yellow Hat
Six Thinking Hats
The WHITE Hat = Facts and Data
Because the Red Hat signals feelings, they can come into
the discussion without pretending to be anything else.
Six Thinking Hats
The BLACK Hat = Issues / Concerns
• Blue Hat: Controls the thinking process. The blue hat is concerned
with control and the organization of the thinking process.
Six Thinking Hats
White Hat: Red Hat:
Information
Information we Feelings, Intuition,
know Emotions
Information we Permission to express
would like to know feelings
Information we No need to justify
need Represents feelings right
Information that is now
missing Keep it short
How are we going to A key ingredient in decision
get that information
making
Includes hard facts
to doubtful
information
Six Thinking Hats