Engineering Management

Decision Making

MARK JOCENT “PAPERTS” ALIPIO

JOHN MARK “PAPYCHOLO” MANDACAYAN
EUGENE “HADLOK KAY GF” CERIO A.K.A BULAG RA JAPUN
BSME-5A
What is Engineering Management?
 Is a specialized form of management that is concerned with the
application of engineering principles to business practice.

 Is a career that brings together the technological problem-solving

savvy of engineering and the organizational, administrative, and
planning abilities of management in order to oversee complex
enterprises from conception to completion.
What is Decision Making ?

 It may be define as the “process of

identifying and choosing
alternative courses of action in a
manner appropriate to the
demands of the situation”.

 It also define as “the heart of all

management functions”
Decision Making as a
Management Responsibility:
 Decision making is a
responsibility of the engineer
manager. It is understandable
for managers to make wrong
decisions at a time. The wise
manager will correct them as
soon as they are identified. The
bigger issue is the manager who
cannot or do not want to make
decisions.
Decision Making as a
Management Responsibility:
 Management must strive to
choose a decision option as
correctly as possible. Since they
have that power, they are
responsible for whatever outcome
their decisions bring. The higher
the management level is, the
bigger and the more complicated
decision-making becomes.
 The Decision-Making Process
Diagnose Problem

Analyze Environment

Develop viable Alternatives

Evaluate Alternatives

Make a choice

Implement decision

Evaluate and adapt decision

results
The Decision Making Process

 Diagnose problem – if a manager wants to make an intelligent

decision, his first move must to identify the problem. If the manager
fails in this aspect, it is almost impossible to succeed in the
subsequent steps.

 Analyze the environment– the environment where the organization

is situated plays a very significant role in the success or failure of
such an organization. It is therefore, very important that an analysis
of the environment be undertaken.
 Components of the Environment. The environment consists of two major
concerns: the internal and external
The Decision Making Process

 Develop viable alternatives– often times, problems may be solved

by any of the solutions offered. The best among the alternative
solutions must be considered by management. This is made possible
by using a procedure with the following steps:
 Prepare , Determine , and Revise

 Evaluate the alternatives– after determining the viability of the

alternatives and a revised list has been made, an evaluation of the
remaining alternatives is necessary.
The Decision Making Process

 Make a choice– This is the point where he/she must be convinced

that all the previous steps were correctly undertaken. To make the
selection process easier, the alternatives can be ranked from best to
worst on the basis of some factors like benefit, cost, or risk.
 Implement decision– refers to carrying out the decision so that the
objectives sought will be achieved. To make implementation
effective, a plan must be devised.
 Evaluate and Adapt Decision Results- The results expected may or
may not happen. It is important to use control and feedback
mechanisms to ensure results and to provide information for future
decisions.
Approaches in Solving Problems
 Qualitative evaluation – refers to evaluation of
alternatives using intuition and subjective judgment.
 The problem is fairly simple.
 The problem is similar.
 The costs involved are not great.
 Immediate decisions are needed.
 Quantitative evaluation – refers to the alternatives
using any technique in a group classified as rational and
analytical.
Quantitative Models for Decision-Making

 Inventory Models – consists of several types all designed to help

the engineer manager make decisions regarding inventory. They
are as follows:
 Economic order quantity model
 Production order quantity model
 Back order inventory model
 Quantity discount model
 Queuing Theory– is one that describes how to determine the
number of service units that will minimize both customer waiting time
and cost of service.
Quantitative Models for Decision-Making

 Network Models – these are models where large complex tasks

are broken into smaller segments that can be managed
independently.
 The program evaluation review technique
 The critical path method
 Queuing Theory– is one that describes how to determine the
number of service units that will minimize both customer waiting time
and cost of service.
 Forecasting– there are instances when engineer managers make
decisions will have implications in the future.
Quantitative Models for Decision-Making

 Regression analysis – is a forecasting method that examines the

association between two or more variables. It uses date from
previous period to predict future events.
 Simulation– is a model constructed to represent reality, on which
conclusions about real-life problems can be used.
 Linear programming– is a quantitative technique that is used to
produced an optimum solution within the bounds imposed by
constraints upon the decision.
 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.
Quantitative Models for Decision-Making

 Statistical Decision-theory – refers to the “rational way to

conceptualize, analyze, and solve problems in situations involving
limited, or partial information about the decision environment”.
REFERENCES:

 https://www.academia.edu/6802670/Decision_Making_in_Engineeri
ng_Management
 https://www. kevinpaulbelarmino/decision-making