Engineering management report

Topics: Qualitative research, Decision making, Quantitative research Pages: 6 (1159 words) Published: November 5, 2013
Engineering Management Case Study

Section 9

Introduction
Glenn Foreman, the president of Oceanview Development Corporation is considering submitting a bid for a property to build a condominium. However the property is designated to be used for single-family residences only. He has a plan to send a referendum to change zoning of property and the permit for the construction of the condominium. He also plans to hire a researcher to find out the probability of the referendum being approved. Below are the important dates that play an important part in the decision making by Mr Foreman

Findings
The president of Oceanview Development Corporation decided to invest on a $15,000,000 property to build condominiums. He also has plans to send a referendum bid to change the zoning of property which requires him to pay 10% ($5,000,000x10%=$500,000) down payment from the cost of property. Cost of property - $5,000,000

Cost of construction - $8,000,000
If the bid is rejected, the deposit will be refunded. If the bid is approved but Mr Foreman failed to follow through within six months the deposit will be forfeited. Mr Foreman has plans to hire a market researcher in order to get a better estimation or prediction on whether his referendum will be approved or not. The cost of hiring a market researcher is $15,000.

Consider the flowchart presented in Figure 1.2. Note that it combines the first three steps of the decision-making process under the heading of “Structuring the Problem” and the latter two steps under the heading “Analyzing the Problem.” Let us now consider in greater detail how to carry out the set of activities that make up the decision-making process. Figure 1.3 shows that the analysis phase of the decision-making process may take two basic forms: qualitative and quantitative. Qualitative analysis is based primarily on the manager’s judgment and experience; it includes the manager’s intuitive “feel” for the problem and is more an art than a science. If the manager has had experience with similar 4 Chapter 1 Introduction

Starting Potential for Job
Alternative Salary Advancement Location
1. Rochester $48,500 Average Average
2. Dallas $46,000 Excellent Good
3. Greensboro $46,000 Good Excellent
4. Pittsburgh $47,000 Average Good
TABLE 1.1 DATA FOR THE JOB EVALUATION DECISION-MAKING PROBLEM problems or if the problem is relatively simple, heavy emphasis may be placed upon a qualitative analysis. However, if the manager has had little experience with similar problems, or if the problem is sufficiently complex, then a quantitative analysis of the problem can be an especially important consideration in the manager’s final decision. When using the quantitative approach, an analyst will concentrate on the quantitative facts or data associated with the problem and develop mathematical expressions that 1.2 Quantitative Analysis and Decision Making 5

Define
the
Problem
Identify
the
Alternatives
Determine
the
Criteria
Evaluate
the
Alternatives
Choose
an
Alternative
Implement
the
Decision
Evaluate
the
Results
Decision
Decision
Making
Problem
Solving
FIGURE 1.1 THE RELATIONSHIP BETWEEN PROBLEM SOLVING
AND DECISION MAKING
Structuring the Problem Analyzing the Problem
Choose
an
Alternative
Evaluate
the
Alternatives
Determine
the
Criteria
Identify
the
Alternatives
Define
the
Problem
FIGURE 1.2 AN ALTERNATE CLASSIFICATION OF THE DECISION-MAKING PROCESS describe the objectives, constraints, and other relationships that exist in the problem. Then, by using one or more quantitative methods, the analyst will make a recommendation based on the quantitative aspects of the problem.

Although skills in the qualitative approach are inherent in the manager and usually increase with experience, the skills of the quantitative approach can be...
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