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Engineering Management (BES 01) Lesson 2 Part 2

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9 views14 pages

Engineering Management (BES 01) Lesson 2 Part 2

Uploaded by

mooneunha24
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Decision

Making
Presenter
Reymart A. Padre, RCE
Decision Making
Decision
Part 1 Making as a Quantitative
Management Models for
Responsibilit Decision
y Making
Part 2

What is
Decision
Making?
Decision Approaches
Making in Problem
Process Solving

Decision Making 2
Approaches in

Problem
Solving
Quantitative Evaluation
(Numerical Data)
• Identifying patterns and trends: Analyzing numerical
data helps uncover underlying patterns or trends that may be
contributing to the problem.

• Measuring performance: Quantifying project performance


metrics allows for objective assessment and comparison.

• Predicting outcomes: Using statistical models to forecast


potential outcomes of different solutions.

•Optimizing resource allocation: Determining the most


efficient use of resources based on numerical data.
Decision Making 4
Qualitative Evaluation (Reasons, Opinions,
and Motivations)
• Gaining insights: Exploring complex issues through in-
depth interviews, focus groups, or observations.

•Understanding perspectives: Gathering diverse


viewpoints to inform decision-making.

• Identifying root causes: Uncovering the underlying


reasons for a problem through qualitative data analysis.

• Evaluating impact: Assessing the impact of solutions on


stakeholders and the overall project.
Decision Making 5
Quantitative Models
for Decision-Making
1.Inventory models
2.Queuing theory
3.Network model
4.Regression analysis
5.Forecasting
6.Simulation
7.Linear Programming
8.Sampling Theory
9.Statistical decision theory

6
1. Economic order quantity model – Used to
calculate the number of items that should be ordered at one
time to minimize the total yearly cost of placing orders
and carrying the items in inventory

2. Production order quantity model - used to determine the


optimal production quantity for a product that is produced and
Invent consumed simultaneously. Unlike the Economic Order Quantity
ory (EOQ) model, which deals with purchasing items, the POQ model
is specifically for production environments.
Model 3. Back order inventory model – a strategy where a company
accepts orders for products even when they are currently out of
stock. The promise is to fulfill the order as soon as the product
becomes available.

4. Quantity discount model - an inventory management


technique that considers price reductions offered by suppliers
for purchasing larger quantities of a product. It involves
determining the optimal order quantity that minimizes total
costs, including purchasing, ordering, and holding costs while
taking advantage of available discounts.

Decision Making 7
Queuing Theory – Determine the number of service units that will
minimize both customer waiting time and cost of service. The queuing
theory is applicable to companies where waiting lines are a common
situation.
Network Model – where large and complex task were broken into
smaller segments.
1. Program Evaluation Review Technique (PERT) – a technique that
enables engineer managers to schedule, monitor, and control large
and complex projects by employing estimates for each activity.

2. Critical Path Method (CPM) – this is a network technique using only


one-time factor per activity that enables engineer managers to
schedule, monitor, and control large and complex projects

Difference between concepts


PERT is better suited for projects with high uncertainty, where activity
durations are difficult to predict accurately.
CPM is more effective for projects with well-defined activities and
predictable durations, where cost management is a primary concern.
8
In building construction, both PERT and CPM can
be used together to effectively manage the project. PERT
can be applied to activities with high uncertainty, while
CPM is suitable for activities with more predictable
durations. By combining these methods, construction
project managers can create an effective project
schedule that accounts for both uncertainties and
predictable tasks. 9
Forecasting – may be
defined as “the collection
of past and current
information to make
predictions about the
future”
Regression Analysis
– a forecasting method that
examines the association
between two or more
variables. It uses data from
the previous periods to
predict future events.

Simple Regression – one


independent variable is involved

Multiple Regression – two or


more variables are involved

Decision Making 10
Simulation – is a model constructed to represent
reality, on which conclusions about real-life problems
can be used. Simulation does not guarantee an
optimum solution, but it can evaluate the alternatives
fed into the process by the decision-maker.

Linear Programming – is a quantitative


technique that is used to produce an optimum
solution within the bounds imposed by constraints Click icon to add picture
upon the decision. Linear Programming is very useful
as a decision-making tool when supply and demand
limitations at plants, warehouses, or market areas are
constraints upon the system.

Sampling Theory – is a quantitative technique


where samples of populations are statistically
determined to be used for a number of processes,
such as quality control and marketing research. When
data gathering is expensive, sampling provides an
alternative.

Decision Making 11
Statistical Decision Theory
A theory refers to the rational way to
conceptualize, analyze, and solve problems in
situations involving limited, or partial
information about the decision environment.
Click icon to add picture
Bayesian Analysis – to revise and update the
initial assessments of the event probabilities
generated by the alternative solutions. This is
achieved by the use of additional information.

Decision Making 12
Activity No. 3

1. Give an illustrative example of how Bayesian


Analysis is used.

Decision Making 13
Thank
you…

RAPadre

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