Multi-Objective Decision Analysis: Managing Trade-Offs and Uncertainty

• Activity Number: 191
• Type: Contributed
• Date/Time: Monday, July 30, 2012 : 10:30 AM to 12:20 PM
• Sponsor: Section on Statistical Consulting
• Author(s): Clinton Brownley*+
• Keywords: Decision analysis ; Business decisions ; Strategic decisions ; Objectives ; Uncertainty ; Trade-offs

Abstract

In today's complex, uncertain business environment, people can find it very challenging to structure their decisions to make trade-offs among conflicting objectives, deal with uncertainties, and clearly communicate with others. A structured decision making process for multi-objective decisions under uncertainty addresses all of these challenges by providing a framework. This framework helps decision makers model their decision problem, focus information search, assess the impact of value trade-offs, risk preferences, and uncertainties on the preferred alternative, and generate consensus and group commitment to action. I developed a set of spreadsheet templates using Excel, an inexpensive, generally-available resource, to guide businesses and individuals through a simple yet powerful decision analysis process for making multi-objective decisions under uncertainty. By using this process to structure their decision making, businesses and individuals are able to measure their objectives, articulate and weigh their values, incorporate and use probabilities, and perform sensitivity analyses to ensure the decisions they make are consistent with their objectives and values.