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Decision Analysis – Set Objective, Criteria and Available Choices (Part 2)

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Step-1 State Objective

·         The goal is to understand the intended result of the decision.

·         Output: Brief statement about decision making goal.

·         State clear and specific purpose of decision. Such as:

o   Decide whether to “purchase Car-A or Car-B”, (or) “decide what type of city-car to purchase”.

o   It will be different if we have goals of selecting "Type of City-Car to purchase". Then the option won't be limited to only Car-A and Car-B.

·         Method:

o   Ask question of:  What are we trying to decide? (Select a car from wide-range of city-car options in the market).

o   Write a short and concise Purpose Statement that includes:

§  Choice word (decide, select, purchase)

§  End result of this decision (eq. acquire a new car)

§  Modifier (if any, eq.: 4-seater, city car, automatic transmission)

§  Example of purpose statement: Purchase a new city car; 4-seater, with automatic transmission.

Step-2 Set Criteria

·         The goal is to have Criteria which will be used to evaluate Alternatives,

·         During this step, keep ask questions of:

o   What requirements should the alternatives fulfil?

o   What resources are available?

o   What restriction do we face?

Substep-1: List-down All Possible Criteria

·         Output: List of all possible Criteria.

·         Method: Use Brainstorming.

o   Don’t do any filter to the criteria.

o   List all of them without restriction, no matter how absurd they are (if any of non-sense items somehow show up, write it down and keep it on the list - for now).

Substep-2: Categorize Criteria into Two Groups

·         Output: All criteria are classified into Must-Have (M) group, and Nice-to-Have (N) group.

·         Note on this step:

o   Not all criteria are created equal.

o   One or two criteria will be mandatory; while others might be extremely desirable (but not absolute necessary), and the rest just only nice to have.

o   If there are any criteria that deemed not realistic, write it off from the list.

·         Method:

o   Classify criteria into two groups:

§  Group of Must-Have (M).

§  Group of Nice-to-Have (N).

o   Each item on that categories can be separated by:

§  Must-Have should be having these criteria:

·         Mandatory - cannot proceed without it.

·         Quantifiable (can be measured).

§  Nice-To-Have should be having this criteria:

·         Desirable – but we can still proceed without this criterion.

·         Can be measured comparatively

o   While it is easy to classify Must-Have criteria, the things with Nice-to-Have criteria are not so simple. Items in these category will be having different degree of importance, some will be more important than others. Use the following guide to help the measurement:

§  Compare all Nice-To-Have (N) and start asking: "Which N is the most important to this decision?"

§  Assign importance of 10 to this most important N.

§  Compare the rest, each one of Ns, and assign importance value of 1-10 (10 of being the most important, and 1 of being the least important, note: comparative - not rank).

Step-3 Identify & Assess Choices

Substep-1: Identify All Possible Choices

·         The goal is to get a clear perspective about what Choices are available to fulfil all the criteria set previously.

·         Output: List of all possible Alternatives of Choices.

·         Method: Consider following items for listing all of Choices items:

o   Past experience.

o   Subject matter expert.

o   Available media.

o   Existing alternatives.

o   Develop new alternatives.

Substep-2: Assess Choices

·         The goal is to assess how well all identified alternatives meet criteria.

·         Output: Alternatives with a Score in each of them.

·         Method to assess Must-Have (M) Criteria:

o   Objective: Evaluate alternatives to the minimum requirement.

o   Ask: Do these alternatives satisfy Must-Have (M) criteria?

o   Compare this against each of M:

§  Record facts about Must-Have (M) of all alternatives.

§  Compare facts about M of each alternative.

§  If alternative meets each M criterion, mark it as "Pass".

§  If alternative doesn't meet any of the criteria, mark it as "Failed".

§  Drop all “Failed” alternatives.

·         Method to assess Nice-To-Have (N) Criteria:

o   Objective: Evaluate alternatives to N-Criteria.

o   Ask: If alternative above satisfy Must-Have criteria, how well is it when meeting each Nice-To-Have (N)?

o   Compare this against each of N-criteria.

§  Record facts about the Ns of all alternatives.

§  For each N, compare among the alternatives and assign Score of 10 to the best alternative.

§  Compare remaining alternatives to the “best alternative” above, assign Comparative Performance Score (we can call this importance rating or weight).

§  Multiply the Score with the importance (weight) of each N.

§  Calculate by sum-up the overall Score of each Alternative.

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