"A good science and engineering decision is a good business decision."
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Decisions with Risk
What Every Executive Should Know about Risk and Economic Decision Analysis
working title of a planned, short book by John
Schuyler
(linked to this page from
www.decisionswithrisk.com)
Decision-makers are increasingly presented with probabilistic analyses supporting a recommended investment. The purpose of this book is to help executives understand the principles and methods of decision analysis. The decision-maker owns the decision and should be engaged in the analysis process.
People in the courses often say, "My boss should be hearing this."-particularly when we're discussing decision policy. We will be providing copies of this book for participants to take back to their bosses.
Tentative chapters include:
- What is decision analysis?
- The decision analysis process and the role of the decision-maker
- Framing the problem
- Decision policy elements, including risk policy
- Interpreting charts and numeric results of a decision
analysis
(Probabilities and probability distributions) - Additional probability concepts
- Decision tree analysis
- Monte Carlo simulation
- Delegating responsibility: the executive's role in
ensuring decision quality
(Drilling down into the analysis-some probing questions to ask)
Appendices - Business modeling of projects, portfolios and the enterprise
- Corporate social responsibility
- Determining your risk tolerance
- Sensitivity analysis
- Optimizing decision variables
- Judgments and biases
- Improving decisions: Value of information, flexibility and control
- Portfolio concepts and enterprise risk management