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Thoughts of Using Economic Decision-Making to Systems Engineering and Systems Thinking: An Exploratory Study

Thoughts of Using Economic Decision-Making to Systems Engineering and Systems Thinking: An Exploratory Study

Brian J. Galli
Copyright: © 2019 |Volume: 8 |Issue: 3 |Pages: 14
ISSN: 2160-9772|EISSN: 2160-9799|EISBN13: 9781522568049|DOI: 10.4018/IJSDA.2019070101
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MLA

Galli, Brian J. "Thoughts of Using Economic Decision-Making to Systems Engineering and Systems Thinking: An Exploratory Study." IJSDA vol.8, no.3 2019: pp.1-14. http://doi.org/10.4018/IJSDA.2019070101

APA

Galli, B. J. (2019). Thoughts of Using Economic Decision-Making to Systems Engineering and Systems Thinking: An Exploratory Study. International Journal of System Dynamics Applications (IJSDA), 8(3), 1-14. http://doi.org/10.4018/IJSDA.2019070101

Chicago

Galli, Brian J. "Thoughts of Using Economic Decision-Making to Systems Engineering and Systems Thinking: An Exploratory Study," International Journal of System Dynamics Applications (IJSDA) 8, no.3: 1-14. http://doi.org/10.4018/IJSDA.2019070101

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Abstract

System engineering is an art that tries to capture the requirements that are imposed by stakeholders. Economic decision-making is an essential tool for systems engineers to accomplish that goal. However, a decision as a whole in systems engineering can be summed up in the following three element process: utility analysis by 17 evaluation criteria, human behavioral analysis by 6 evaluation criteria, the calculation of Net Present Value, IRR, and other economic decision-making indicators. The author will further discuss the NPV and IRR methods to discover some hidden pitfalls. Also, this article will discuss some newer methods/techniques that avoid these pitfalls in economic decision-making by accounting for the risk associated with these methodologies.

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