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

Brian J. Galli
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Brian J. Galli: Assistant Professor and Graduate Program Director, Master of Science in Engineering Management Industrial Engineering, Hofstra University, USA

International Journal of System Dynamics Applications (IJSDA), 2019, vol. 8, issue 3, 1-14

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.

Date: 2019
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