Engineering Department
Baribag, Sorsogon City
S.Y. 2022 – 2023
Title of the Report:
Decision-making in
Engineering Management
Submitted by:
AGNIS, Mary Joanna
CALINGACION, Ian
ERGINA, Emerie
BSCE 2A
Submitted to:
Engr. Noel D. Heroy
Instructor
WHAT IS DECISION-MAKING?
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Decision-making is the process of making choices by recognizing the problem, gathering
relevant information on the feasible solutions, and assessing the best alternative.
Making decisions to solve a certain problem can be carried out through an intuitive process
or logical process, or a combination of the two.
➢ Intuitive process uses gut feeling.
➢ Logical process uses facts and figures to make scientifically sounding decisions.
DECISION-MAKING – Why is it important?
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It is an essential part of planning; making an informed, sounding, and collaborative decisions
can help in building solid organizational direction and have a favorable impact.
A step-by-step decision-making process helps in making more deliberate and thoughtful
decisions by organizing relevant information and defining alternatives.
Types of Decision-making in Engineering Management
(a) Programmed Decision – those of which the manager has encountered and made in the past.
(b) Unprogrammed Decision – scenarios which are new and for which there are no proven
answers to use as a guide.
Categories of Decision-making
(a) Decision-making under certainty – implies certainty of the future state of nature.
(b) Decision-making under risk – assumes that there exists a number of possible future states
of the nature.
(c) Decision-making under uncertainty – awareness of various possible states of nature but
has insufficient information to assign any probabilities of occurrence.
DECISION-MAKING – Step-by-step Process:
(1) Diagnose problem. Identify first the problem. This includes clarifying the objectives of the
problem and a rough idea of the direction to follow.
(2) Gather relevant information. Involves analyzing the environment; both internal and external
environment.
➢ Internal Environment refers to organizational activities within the firm that surrounds
decision making.
➢ External Environment refers to the variables outside the organization.
(3) Develop viable alternatives. Pick the best solution by using a procedure with the following:
a. Prepare a list of viable solutions.
b. Determine the viability of each solution.
c. Revise the list by striking out those that are not viable.
(4) Evaluate alternatives. Each alternative must be analyzed and evaluated in terms of its value,
cost, and risk characteristics. Evaluate, as well, whether the need (problem to be solved)
identified would be met or resolved.
(5) Make a choice. This refers to the process of selecting the best alternative representing the
potential solution to the problem.
(6) Implement decision. Implementation refers to carrying out the decision so that the objectives
sought will be achieved.
(7) Evaluate and adapt decision results. In implementing the decision, the results may or may
not happen. It is therefore important for the engineer manager to use control and feedback
mechanisms to ensure results and to provide information for future decisions.
DECISION-MAKING – Techniques and Tools:
(1) Marginal Analysis – allows organizations to allocate resources to increase profitability and
benefits, and reduce costs.
(2) SWOT Diagram – helps study a situation in four quadrants:
a. Strengths: Where does the organization excel compared to its competition? Consider
internal and external strengths.
b. Weaknesses: What could the organization improve?
c. Opportunities: How can the organization leverage its strengths to create new avenues
for success? How could addressing a specific weakness provide a unique opportunity?
d. Threats: Determine what obstacles prevent the organization from achieving its goals.
(3) Decision Matrix – provide clarity when dealing with different choices and variables.
(4) Pareto Analysis – helps identify changes that will be the most effective for an organization.
DECISION-MAKING – Pitfalls:
(1) Consultation ambiguity – it is important for a manager to solicit feedback but to make sure
that contributors understand it is the manager’s final decision.
(2) Avoiding discomfort – sound management decision-making requires leaders who do not
confuse their need for comfort with making the best decision.
(3) Appearing indecisive – being too rigorous in evaluating every possible angle can draw out
the process and open the risk of appearing indecisive.
(4) Blind spots – people have particular perspectives and ways of thinking that can create blind
spots.
(5) Groupthink – occurs when a group’s members want to minimize conflict and reach
comfortable decision at the expense of a critical evaluation of other ideas and viewpoints.