Pyramid of Decision Approaches

1
Pyramid of Decision Approaches

• Chose the approach to decision making based on
  the importance of the decision.

2
The Pyramid

• Value analysis
• Importance
• weighting
• Rules
• Intuition

3
Intuition

• Advantages
• Quick and Easy
• Disadvantages
• Inconsistency and Distortion
• Used when
• Short time to make decision
• Key aspects of the problem cannot be quantified

4
Rules

• Advantages
• Quick way to approximate the optimal response
• Articulated and applied consistently
• Disadvantages
• Does not allow flexibility
• May miss some good alternatives

5
Rules continued..

• Used when
• Short time frame for the decision
• Many decisions to be made quickly
• Important to periodically review the rules.

6
Importance Weighting

• Advantages
• Allows for identifying decision criteria
• Allows for articulating which factors are most
  important and which are least important

7
Importance Weighting continued

• Disadvantages
• Assigning weights may be subjective
• It is time consuming
• Use when
• Decision criteria can be articulated
• Goals of the decision are clear
• There is ample time available

8
Value Analysis

• Advantages
• Goes beyond the key decision criteria, to
  understanding the values of the decision maker or
  the organization.
• Decisions are more likely to be aligned with
  goals and objectives.

9
Value Analysis

• Disadvantages
• Time consuming
• Costly, and may need outside expertise or
  consultants to perform the analysis
• Use when
• The decision is very important to the
  organization and strategic in nature.