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

Copyright: © 2019 |Pages: 14
DOI: 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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Introduction

Background to the Topic

Economic decision-making is essential when trying to get the biggest bang for your buck. This process is done to maximize your benefits and, at the same time, minimize your costs. There are three elements to consider when using decision-making in systems engineering & systems thinking: utility analysis (Essig et al., 2015); human behavior analysis (Samson, 2014); and Economic Analysis (Essig et al., 2015).

In most cases, researchers have not fully realized system engineering, as it remains misinterpreted and not clearly defined. As a result, the components of SE are examined for research on the best aspects to be applied to project management. System engineering is known for aiding in the completion of projects, as it has many techniques and tools (Essig et al., 2015). Also, some hierarchies are comprised of smaller systems to be applied to large projects, such as engineering. SE features many skills and tools that focus on the general notions (functions, requirements, etc.), which are believed to enforce project management techniques, as well as conventional engineering settings (Samson, 2014). The theoretical aspect still features problems, as critics say that the analysis is not in-depth enough to see project progress (Samson, 2014)

Applying SE into economic decision-making should be valued for its ability to improve project efficiency by integrating the two domains. Before addressing the problem of combining the two fields, we study their differences. Since the program depends on the customer, the product should have a market, control requirement, or business that will put the right metrics in place. Customer requirements should be a priority during the development of general project requirements. Thus, an engineer in SE makes sure to identify the product requirement is not only verified but is also validated (Samson, 2014).

In SE, to verify a product requirement is to accomplish as enlisted, but validation entails customer satisfaction. A project manager aims to fulfill what is required for the product and project while considering resources, cost, and time. The International Council on Systems Engineering claims that project management shares the same objective with system engineering, so project management gives the definition and SE delivers.

Multiple organizations have taken on system engineering to help with completing difficult projects, such as telecoms industries, defense, and transportations. Implementing system engineering into project management eases the transition of tasks for those involved, which reduces anxiety and increases quality (Essig et al., 2015).

Primarily, this study aims to use guides, preceding research, and other studies to demonstrate how system engineering relates to economic decision-making. This study considers preliminary stages of engineering environment, techniques in commercial research and development, and the measures on SE activities in decision-making performance. This is done to demonstrate how systems engineering affects development efforts while focusing on particular areas like SE Tools.

Research Gap

Even though there is a research gap in the pre-existing literature, it is exemplified how these variables, concepts, and models are vital facets of operations and project management. This research gap lies within the limited literature addressing the way in which these variables, theories, and models help operations in project management to progress at a steady pace. However, these knowledge gaps are at the root of this study, as it will address how these variables, concepts, and models operate in operations and project management. Also, this study will focus on the elements and applications within them. Knowing how these variables, concepts, and models are both alike and different will help researchers to comprehend better how they all relate.

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