0

Full Content is available to subscribers

Subscribe/Learn More  >

Toward Considering Risk Attitudes in Engineering Organizations Using Utility Theory

[+] Author Affiliations
Douglas Van Bossuyt, Chris Hoyle, Irem Y. Tumer, Toni Doolen

Oregon State University, Corvallis, OR

Andy Dong

University of Sydney, Sydney, NSW, Australia

Richard Malak

Texas A&M University, College Station, TX

Paper No. DETC2012-70399, pp. 693-704; 12 pages
doi:10.1115/DETC2012-70399
From:
  • ASME 2012 International Design Engineering Technical Conferences and Computers and Information in Engineering Conference
  • Volume 7: 9th International Conference on Design Education; 24th International Conference on Design Theory and Methodology
  • Chicago, Illinois, USA, August 12–15, 2012
  • Conference Sponsors: Design Engineering Division, Computers and Information in Engineering Division
  • ISBN: 978-0-7918-4506-6
  • Copyright © 2012 by ASME

abstract

Design projects within large engineering organizations involve numerous uncertainties that can lead to unacceptably high levels of risk. Practicing designers recognize the existence of risk and commonly are aware of events that raise risk levels. However, a disconnect exists between past project performance and current project execution that limits decision-making. This disconnect is primarily due to a lack of quantitative models that can be used for rational decision-making. Methods and tools used to make decisions in risk-informed design generally use an expected value approach. Research in the psychology domain has shown that decision-makers and stakeholders have domain-specific risk attitudes that often have variations between individuals and between companies. Risk methods used in engineering such as Failure Modes and Effects Analysis (FMEA), Fault Tree Analysis (FTA), and others are often ill-equipped to help stakeholders make decisions based upon risk-tolerant or risk-averse decision-making conditions. This paper focuses on the specific issue of helping stakeholders make decisions under risk-tolerant or risk-averse decision-making conditions and presents a novel method of translating engineering risk data from the domain of expected value into a domain corrected for risk attitude. This is done by using risk utility functions derived from the Engineering-Domain-Specific Risk-Taking (E-DOSPERT) test. This method allows decisions to be made based upon data that is risk attitude corrected. Further, the method uses an aspirational measure of risk attitude as opposed to existing lottery methods of generating utility functions that are based upon past performance. An illustrative test case using a simplified space mission designed in a collaborative design center environment is included. The method is shown to change risk-informed decisions in certain situations where a risk-tolerant or risk-averse decision-maker would likely choose differently than the dictates of the expected value approach.

Copyright © 2012 by ASME
Topics: Risk

Figures

Tables

Interactive Graphics

Video

Country-Specific Mortality and Growth Failure in Infancy and Yound Children and Association With Material Stature

Use interactive graphics and maps to view and sort country-specific infant and early dhildhood mortality and growth failure data and their association with maternal

NOTE:
Citing articles are presented as examples only. In non-demo SCM6 implementation, integration with CrossRef’s "Cited By" API will populate this tab (http://www.crossref.org/citedby.html).

Some tools below are only available to our subscribers or users with an online account.

Related Content

Customize your page view by dragging and repositioning the boxes below.

Related eBook Content
Topic Collections

Sorry! You do not have access to this content. For assistance or to subscribe, please contact us:

  • TELEPHONE: 1-800-843-2763 (Toll-free in the USA)
  • EMAIL: asmedigitalcollection@asme.org
Sign In