Complex Decision Making for Engineering and Management
About Lesson

This lecture introduces the fundamental concepts of complex decision making, explaining that a decision is a commitment to a particular course of action that involves allocating limited resources, while decision making is a deliberate process of identifying, evaluating, and selecting the most appropriate alternative. Complex decisions commonly involve uncertainty, multiple alternatives and interdependent criteria, incomplete information, limited resources, and conflicting objectives, as illustrated by investment planning, business expansion, and group decision making. The lecture distinguishes three approaches to decision making: descriptive, which explains how people actually make decisions; normative, which describes how perfectly rational decisions should be made; and prescriptive, which combines both approaches through structured procedures and analytical tools to support better decisions in real-world situations. The prescriptive approach is particularly relevant because actual decision makers face limitations in information, time, and cognitive capacity. Furthermore, decision analysis, according to Howard (1988), consists of three main phases: formulation, evaluation, and appraisal.

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