ABSTRACT
Decisions are made throughout the life cycle of every product program. Decisions are made whenever alternatives exist and the most desired alternative needs to be selected. The selected alternative should result in reducing risks and increasing benefits. This chapter describes several decision-making approaches and models and also provides an understanding of issues related to risks and methods to analyze the risks. The decision-making models covered in this chapter include (a) decision matrix involving combinations of alternatives and outcomes with decision-making principles such as maximizing expected value, achieving an aspiration level, most probable principle, Laplace principle, Maximin principle, Maxmax principle, and Hurwicz principle; (b) analytical hierarchical method to obtain weights of alternatives; and (c) Pugh diagram with weighted multiple product attributes to compare and select a product concept with other benchmarked products. The chapter also provides examples on types of risks such as technical risks, schedule risks and financial risks, methods to assess risks, e.g., risk matrix, and trade-offs between product attributes considered during product development.
