Abstract
This chapter provides project management practitioners with some basic methods for decision making by using a sample case-study. First, decision analysis and decision trees are presented as practical methods to evaluate options with regard to situations where the outcome can be known. To this end, basics of decision and utility theory are highlighted, as well as the notion of risk premium.
Then, if the result of the decision is highly uncertain, Monte Carlo simulations are introduced as a help in the task of making the choice.
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References and Additional Resources About Decision Making
Bedford T, Cooke R (2001) Probabilistic risk analysis: foundations and methods. Cambridge University Press, Cambridge
Chapman CB (2002) Managing project risk uncertainty: a constructively simple approach to decision making. Wiley, Hoboken, NJ
de Neufville R (1990) Applied systems analysis. McGraw-Hill, New York, NY
Flanagan R, Norman G (1993) Risk management and construction. Wiley-Blackwell, Hoboken, NJ
Haimes YY (2004) Risk modeling, management, and assessment. Wiley, Hoboken, NJ
Lifson MW, Shaifer EF (1982) Decision and risk analysis for construction management. Wiley, Hoboken, NJ
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© 2011 Springer-Verlag Berlin Heidelberg
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De Marco, A. (2011). Decision Making. In: Project Management for Facility Constructions. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-17092-8_12
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DOI: https://doi.org/10.1007/978-3-642-17092-8_12
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Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-17091-1
Online ISBN: 978-3-642-17092-8
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