Preface

Our Handbook of Decision Analysis is written for the decision professional. The target audience is the decision analysis practitioner who wants to increase the breadth and depth of his or her technical skills (concepts and mathematics) and soft skills (personal and interpersonal) required for success in our field. We assume the reader has a technical (engineering, science, mathematics, or operations research) or business degree; a course in probability and statistics (Appendix A provides a probability review); and, perhaps, some introduction to single or multiple objective decision analysis in a college course or a professional short course. The book is not designed to introduce new decision analysis mathematics, but rather to make the most common mathematics and best practices available to the practitioner.

The handbook is designed to be supplemental reading for professional decision analysis training courses, a reference for beginning and experienced practitioners, and a supplemental text for an undergraduate or graduate course in decision analysis. Decision analysts work in many industries and government agencies; many work in oil and gas firms, pharmaceutical firms, and military/intelligence agencies. The book should be useful to both domestic and international practitioners.

Our handbook describes the philosophy, technical concepts, mathematics, and art of decision analysis for the decision professional. The handbook includes chapters on the following topics: decision-making challenges; mathematical foundations of decision analysis; decision analysis soft skills; selecting the decision making process for interacting with decision makers and stakeholders; framing the decision; crafting decision objectives; designing creative alternatives to create value; performing deterministic modeling and analysis of alternatives; assessing uncertainty; performing probabilistic modeling and analysis; portfolio decision analysis; communicating with senior decision makers; and implementing decisions.

Figure P.1 provides the organizational structure of the book. Chapter 1 provides an introduction to decision analysis. Chapters 2–4 provide the foundational knowledge required for decision analysis success. Chapters 5–14 provide the decision analysis best practices to create value as sequential, iterative steps. However, the order of the steps should be tailored to the application, and some steps may not apply. For example, if the decision is a choice of the best alternative, the portfolio decision analysis chapter would not apply. Also, some steps can be combined. For example, the decision framing and crafting of the decision objectives may be done at the same time. Chapter 15 provides a summary of the major themes of the book. The chapters that provide the mathematics of decision analysis are outlined with dotted lines.

FIGURE P.1. Chapter organization of the Handbook Decision of Analysis.

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The book also includes key insights from decision analysis applications and behavioral decision analysis research. The handbook references decision analysis textbooks, technical books, and research papers for detailed mathematical proofs, advanced topics, and further professional reading.

The handbook has five unique features:

1. The book provides a balanced presentation of technical skills (decision analysis concepts, mathematics, and modeling) and soft skills (strategic thinking, leading teams, managing teams, researching, interviewing individuals, facilitating groups, and communicating).
2. The book integrates the techniques of single and multiple objective decision analysis instead of presenting them in separate sections of the book. Chapter 3 provides our framework.
3. The book uses three substantive illustrative examples (Roughneck North American Strategy, Geneptin Personalized Medicine, and Data Center) to illustrate the key decision analysis concepts and techniques, show the diversity of applications, and demonstrate how the techniques are tailored to different decision problems.
4. The book presents multiple qualitative and quantitative techniques for each key decision analysis task as opposed to presenting one technique for all problems. After describing the techniques, we discuss their advantages and disadvantages.
5. Supplementary material for this book can be found by entering ISBN 9781118173138 at booksupport.wiley.com. This website will contain information on the book and the Microsoft® Office Excel® files used for the three illustrative examples.

We, the coauthors, became decision analysts and strive to be decision professionals because we believe in the power of decision analysis to create value for organizations and enterprises. The art and science of decision analysis has changed our professional and personal decision making.

Writing the handbook has been a great opportunity for us to reflect on what we have learned and to describe the best practices that we use. In addition to our mentors and colleagues, we have also learned a lot from each other in the process of writing (and rewriting) this book! We look forward to hearing your comments on the handbook, and we hope that the material helps your development as a decision professional.

GREGORY S. PARNELL
TERRY A. BRESNICK
STEVEN N. TANI
ERIC R. JOHNSON

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