Dr Valentina Ferretti

This course is available on the BSc in Management. This course is available as an outside option to students on other programmes where regulations permit and to General Course students.

This course is complementary to MG311 (Behavioural Decision Science for Management and Policy), which explains how unaided, intuitive decisions by individuals and groups are made, whereas this course explores how deliberation aided by quantitative models can improve the quality of decisions and develop shared understanding among the key players.

Elementary statistical and mathematical concepts and experience of standard computer software is assumed.

A major characteristic of all decisions in every organisation and policy making context is that they are taken to achieve objectives, both short-term and long-term. To do this well is a fundamental skill for managers at every level in the organisation, as well as for policy makers.   But decisions are often hard to make in the presence of multiple objectives, uncertainty about the future, and differences of opinion among key players.  For decisions that require large amounts of resources and commitments, the weight of responsibility felt by the decision maker can be heavy, especially when the consequences require to consider judgements about trade-offs between benefits, risks and costs.

In this course students will learn how to use Risk and Decision Analysis as a form of analytics that supports decision making in private, voluntary and public organisations.  The course shows how a consistent and realistic mix of data and judgement can help decision makers to better achieve their objectives. Based on sound theory underlying normative, descriptive and prescriptive decision-making research, the course emphasises the practical application of Risk and Decision Analysis for decision-making on any topic in any organisational setting.

The course is designed to enhance the students’ decision capabilities when confronted with strategic or operational choices, when searching for decision opportunities, and when designing strategies and policies.  It uses real-world Risk and Decision Analysis applications in organisations and public policy making, and employs several case-studies (supported by specialised decision software) to build students' skills in decision modelling and analysis. It covers modelling and supporting decisions involving multiple stakeholders and conflicting objectives (multi-criteria decision analysis) as well as uncertainty (decision trees, influence diagrams, and risk analysis).

The course is suitable for third-year undergraduates, who will attend the same lectures as postgraduate MSc students, but different seminars.  Past experience shows that both undergraduates and postgraduates benefit from asking questions and sharing their experiences in the interactive lectures.

20 hours of lectures and 13 hours and 30 minutes of classes in the LT.

Students on this course will have a reading week in Week 6, in line with departmental policy.

Two formative assignments:

1. Group project plan (i.e. personal decision context selected, due in week 7)
2. Individual technical report on classes 2, 3, 4 and 5 (due in week 8, these classes cover the additive tasks students will have to develop in their summative group project)

The topic of the project (i.e. a decision making problem to be modelled and analysed by means of Multicriteria Analysis) can be a personal decision (i.e. which job offer to accept when confronted with multiple ones, which master to apply for, etc.). Students will have to collect data, develop and apply a quantitative model, interpret the results and refer to the key scientific literature for the main steps in the development of the model. Students are allowed to work in groups of maximum 4 people. In the individual technical report of the group project, students will have to report on the developed process. This assignment will help students develop their operational problem solving skills by demonstrating their ability to apply a quantitative model to solve an operational problem, interpret its results, and develop sound recommendations.

Belton, V. and Stewart, T. (2002) Multiple Criteria Decision Analysis. London, Kluwer.

Bouyssou, D., Marchant, T., Pirlot, M., Tsoukias, A., and Vincke, P. (2006) Evaluation and Decision Models with Multiple Criteria. Stepping stones for the analyst. Springer, International Series in Operations Research & Management Science, Vol. 86.

Bouyssou, D., Marchant, T., Pirlot, M., Tsoukias, A., and Vincke, P. (2007) Evaluation and Decision Models with Multiple Criteria. A critical perspective. Springer, International Series in Operations Research & Management Science, Vol. 32.

Clemen, R.T. and Reilly, T. (2014) Making Hard Decisions. Pacific Grove: Duxbury.

Edwards W., Miles Jr R.F. and von Winterfeldt D. (eds). Advances in Decision Analysis: From Foundations to Applications. Cambridge University Press: New York.

Eisenführ, F., Weber, M. and Langer, T. (2010) Rational Decision Making, 1st ed. Berlin: Springer.

Goodwin, P. and G. Wright (2014). Decision analysis for management judgement. Chichester, Wiley.

Ishizaka, A. and Nemery, P. (2013) Multi-criteria Decision Analysis: Methods and Software. Wiley

Keeney, R.L. (1992) Value-Focused Thinking: A Path to Creative Decision-making. Cambridge: Harvard Univ. Press. HD30.23 K21 (Course Collection).

Keeney, R. L. and Raiffa, H. (1993) Decisions with Multiple Objectives: Preferences and Value Trade-offs. Cambridge: Cambridge University Press, 2nd ed.

Mcnamee, P. and Celona, J. (2007) Decision Analysis for the Professional. Menlo Park: Smart Org, 4th ed (e-book available in the library).

G.S. Parnell et al. (2013) Handbook of Decision Analysis. Hoboke, Wiley.

Von Winterfeldt, D. & Edwards, W. (1986) Decision Analysis and Behavioral Research. Cambridge: Cambridge University Press.

Presentation (40%) and other (60%).

The presentation is a group project due in Week 11 of Lent Term.

The other assessment is an individual technical report on the group project due in Week 1 of Summer Term.