All entries for Sunday 22 April 2012

April 22, 2012

How successful SMART is with two alternatives…

SMART is a good technique for multi criteria decision analysis as it can objectively qualtify even the qualitative factors and make comparisons among them. However, if there are two alternatives just to choose from, I dont think SMART can work really efficiently. It is because it requires to give how well the alternatives work in respect to the criteria or factors that are responsible for making the decision. So, here the worst choice gets zero and the best gets 100. So, if there are only two alternatives, one has to get a 0 and other has to get a 100, no matter how closely they are in terms of performance for that particular factor. Thats why, there could be a case here where there is a lot of biasedness where even though one choice maybe a little worse than the others is some and lot better than the other in the others. That may lead us to take the wrong decision. That is why I feel is that if there are just two alternatives and even though thee is a multi-criteria decision to take, SMART would not be a very robust option, and thus, I feel AHP would work better in these cases.

Making a mistake in decision making is so easy…

Well I have realized one thing from the module, from the mini-project and the classes we had, that it is very easy to go onto the wrong path when you are making decisions. There are just so many places where you could potentially do a wrong thing and the decision outcome you choose would not then be based on a completely rational process and there is a good chance of it being wrong. Starting from choosing the decision tool you would want to use for coming out with a decsion. There are just so many tools and techniques avilable, each having their fair share of crtiticism and strenghts. So, in order to come out with a decsion, the first potential place where you could go wrong is in choosing the right decision tool itelf. After that it is so important to understand the tool and apply it in the right manner. Application of the tool in iself a complex task especially of tools such as AHP. Then there is a chance that you would go wrong because of the hueristics and biases that arise from them. So in applying the decision tool, the presence of biases can make you apply it wrong and as I had previously blogged, I feel a decision tool is as good as the decision maker makes it. There is a fair amount of chance that in ranking the alternatives or in giving weights to the various factors as is required by the major decision making tools, you may not consult the literature available on it, or the toal information on it. You may use the knowledge or the perception you have about the topic and rank them according to those. Even in such a scenario there is a good chance that the decsion you take will not be rational. Then there is a consideration of taking the most robust decision. Sometimes the most robust decision is not the most obvious one, and due to the various biases we have, we may still be bent towards our intuition and use the decision tool in such a way, knowingly or unknowingly, so as the final decision comes out to be the one you want it to be. Also, then if you are taking a decision in a group, all sort of problems conjure up and you need to be careful of so many things specially the Groupthink problem. Thus, I feel that there are just so many places or chances for a decision maker to go wrong in his journey of taking a decision, I do not expect people to ever take a 100% rational decision. The probabilty of going wrong in the process is just so high.

April 2012

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