Engineering Economic Analysis

The Decision-Making Process 11

4. Identify Feasible Alternatives
   One must keep in mind that unless the best alternative is considered, the result will always
   be suboptimal.1 Two types of alternatives are sometimes ignored. First, in many situations
   a do-nothing alternative is fe3,$ible.This may be the "Let's keep doing what we are now
   doing," or the "Let's not spend any money on that problem" alternative. Second, there are
   often feasible (but unglamorous) alternatives, such as "Patch it up and keep it running for
   another year before replacing it."
   There is no way to ensure that the best alternativeisamong the alternatives being
   considered. One should try to be certain that all conventional alternatives have been listed
   and then make a serious effort to suggest innovative solutions. Sometimes a group of people
   considering alternatives in an innovative atmosphere-brainstorming--can be helpful.
   Even impractical alternatives may lead to a better possibility. The payoff from a new,
   innovative alternative can far exceed the value of carefully selecting between the existing
   alternatives.
   Any good listing of alternatives will produce both practical and impractical alternatives.
   It would be of little use, however,to seriously consider an alternativethat cannot be adopted.
   An alternative may be infeasible for a variety of reasons. For example, it might violate
   fundamental laws of science, require resources or materials that cannot be obtained, or it
   might not be available in time. Only the feasible alternatives are retained for further analysis.


5. Select the Criterion to Determine the Best Alternative
   The central task of decision making is choosing from among alternatives. How is the choice
   made? Logically, to choose the best alternative, we must define what we mean bybest.
   There must be a criterion, or set of criteria, to judge which alternative is best. Now, we
   recognize thatbestis a relative adjective on one end of the following relative subjective
   judgment:

Worst Good Better

relative subjective judgment spectrum

Since we are dealing inrelative terms,rather thanabsolute values,the selection will
be the alternative that is relatively the most desirable. Consider a driver found guilty of

speeding and given the alternatives of a $175 fine or 3 days in jail. In absolute terms, neither

alternative is good. But on a relative basis, one simply makes the best of a bad situation.

There may be an ~nlimited number of ways that one mightjudge the various alternatives.

Several possible criteria are:

. Create the least disturbance to the environment.
.Improve the distribution of wealth among people.

1A group of techniques called value analysis is sometimes used to examine past decisions. With the
goal of identifying a better solution and, hence, improving decision making, value analysis reexamines
the entire process that led to a decision viewed as somehow inadequate.