The research objective of this EArly Concept Grant for Exploratory Research (EAGER) award is to derive a multidisciplinary theory of normative decision making for design and manufacturing organizations. The theory will provide new axioms for normative decision making for two types of enterprises: profit maximizing firms (such as John Deere) and federal/governmental design enterprises (such as NASA Langley Research Center). The theory will translate the axioms into mathematical formulations for consistent decision making for the ultimate purpose of improving the design and manufacturing decisions within the United States. For a profit maximizing firm, a fundamental axiom will be investigated: that there be no division within an organization that will accept a project if another division within the same organization, and with the same information and resources, would reject. This axiom will translate into the necessity of a corporate utility function: divisions within the same organization will operate with the same risk attitude when making design decisions. The research will illustrate how to assess a corporate utility function and will explore the decision making behavior that results from common incentive structures within design firms. The work will also derive unique incentive structures that align incentivized behavior with expected utility maximizing behavior. Behavioral experiments will be conducted to verify whether the incentive structures are feasible and match the desired expected utility framework. Verification of the results will also be achieved through industry collaborators. A new Bayesian framework for demand estimation will also be explored and will be used in maximizing the expected utility of profit. The research will include a significant educational component with NASA Langley, John Deere, and the engineering design community.
If successful, the research will advance the theory and practice of engineering design by introducing several new theoretical foundations for normative decision making within the design process. The theory will (i) align design requirements with the value function for the firm, (ii) align incentive structures with expected utility maximizing behavior, (iii) provide axioms needed for consistent decision making within a design firm. The high risk elements within this award include verifying the new methods with the industry partners and NASA, as well as identifying the transition mechanism to incorporate the decision framework within the current design organizations. Improving the decision making within design enterprises is a cornerstone of the U.S. economy. By appropriately identifying the processes needed for consistent decision making, individuals, design engineers, and various business enterprises will produce better products. Besides the theoretical and experimental work, this award will enable the PI to conduct two workshops in collaboration with NASA Langley, John Deere and other members of the design and manufacturing community: the first will be on "Setting Value-Based Requirements for Engineering Design" and the second will be on 'Aligning Incentive Structures with Expected Utility Maximization'. The research will be disseminated broadly and the award will enable the PI to continue a joint collaboration the Champaign County Juvenile Detention Center (JDC) spreading decision skills to troubled teens.
