1. Decision Maker Profile Determination and
Decision Modeling to Project Most Likely
Decision Outcomes
April 15, 2011
Matt Shields
Joe Hartman advising

2. 2
Introduction
• Have you ever made a bad first impression at a business
meeting?
• Did you say something that the customer took completely
out of context?
• Did you glance over the topic that the customer found
most important?
How can you avoid this mistake the next time…?

3. 3
Purpose
• The purpose of this project is to
– Develop a methodology to determine decision profiles
– Develop a simulation model to forecast decision
outcomes using decision profile elements
– Interpret results to understand decision tendencies and
improve decision-making

4. 4
Project Overview
• Most decision support tools determine how a decision-
maker should decide -- this project seeks to determine how
a decision-maker will decide
• By determining a person’s decision profile and modeling
the decision calculus, one may be able to forecast decision
outcomes by a person, a group of people, or an
organization

5. 6
Key Tasks
• Develop methodology to determine a person’s decision
profile using biographical, cultural, and behavioral
information.
• Assign decision element values for information types as
probabilities for simulation and modeling.
• Develop an ARENA Monte Carlo simulation that
generates decision element values based upon a decision
profile and forecasts outcomes by comparing decision
element values to constraints from a decision scenario.
• Interpret the results to determine decision-making
tendencies and recommendations.

6. Methodology
• Capability – Capable of making a rational decision?
• Method – How does entity make decisions?
• Bias – Does the entity make rational decisions?

7. Methodology
Capability - Are you able to make rational decisions?
Capacity Responsibility Achievement Power Status
Intelligence Dependability Proven success Reward
Verbal faculty Initiative Productivity Coercive
Originality Persistence Work ethic Expert
Self Confidence Aggressiveness Charismatic
Judgment Self Confidence Legitimate Authority
Cognition Desire to Excel

8. Methodology
Method - How do you make decisions?
Risk Aversion Efficiency Deliberation Term Participation
Involvement
Uncertainty
Avoidance
Satisficing Reactivity Favor Near
Term
Active
Risk shift for
group decision
Prioritization Fully researched Favor Long
Term
Sociable
Stability Decentralize Adaptor
Security Cooperation
Conflict
avoidance
Need for
consensus

9. Methodology
Biases - Do you make rational decisions?
Conflict
Reaction
Values Disposition Personality Emotional
Intelligence
Perceptions
Judgments
Avoiding Moral Affectivity Extroversion Experience Race
Accommodating Political Pragmatism Tolerance Historical
perspective
Sex
Competing Religious Intuition Conscientious Neuroticism Lifestyles
Compromising Philosophy Power needs Openness to
experience
Tension National
origin
Collaborating Self interest Cognition Security
Stability
Age
Ethical Self Confidence Framing

10. 11
Decision Element Assignment
• Derive values for the decision elements to determine how
that information group performs in that decision element
relative to the general populous
• More “art” than “science”
• Based upon research on information groups
– Myers Briggs Type Analysis
– Hofstede’s Dimensional Analysis
– Sex
– Age
– Achievement (Education and Work Status)

11. 12
Decision Element Assignment
Personality
MBTI ISTJ ISFJ ESTJ ESFJ ISTP ISFP ESTP ESFP INFJ INFP ENFJ ENFP INTJ INTP ENTJ ENTP
Capability
Capacity 0.43 0.43 0.55 0.55 0.33 0.33 0.53 0.53 0.60 0.35 0.60 0.55 0.68 0.55 0.68 0.63
Intelligence
Verbal faculty 0.30 0.30 0.70 0.70 0.30 0.20 0.80 0.80 0.50 0.30 0.80 0.60 0.20 0.70 0.40 0.80
Originality 0.20 0.20 0.20 0.20 0.40 0.50 0.50 0.50 0.80 0.50 0.60 0.80 0.80 0.70 0.80 0.80
Self Confidence 0.40 0.40 0.50 0.50 0.40 0.40 0.60 0.60 0.30 0.40 0.40 0.60 0.90 0.50 0.70 0.70
Judgement 0.80 0.80 0.80 0.80 0.20 0.20 0.20 0.20 0.80 0.20 0.60 0.20 0.80 0.30 0.80 0.20
Cognition
Responsibility 0.52 0.50 0.55 0.58 0.40 0.22 0.63 0.40 0.50 0.63 0.55 0.65 0.68 0.53 0.68 0.58
Dependability 0.90 0.80 0.70 0.70 0.30 0.10 0.30 0.20 0.60 0.70 0.70 0.40 0.70 0.50 0.70 0.50
Initiative 0.40 0.50 0.50 0.60 0.50 0.20 0.80 0.50 0.60 0.70 0.60 0.80 0.40 0.50 0.50 0.50
Persistence 0.70 0.60 0.60 0.60 0.40 0.20 0.70 0.30 0.40 0.80 0.50 0.60 0.70 0.60 0.70 0.60
Aggressiveness 0.30 0.20 0.60 0.60 0.30 0.20 0.80 0.40 0.40 0.50 0.40 0.80 0.70 0.50 0.80 0.60
Self Confidence 0.40 0.40 0.50 0.50 0.40 0.40 0.60 0.60 0.30 0.40 0.40 0.60 0.90 0.50 0.70 0.70
Desire to Excel 0.40 0.50 0.40 0.50 0.50 0.20 0.60 0.40 0.70 0.70 0.70 0.70 0.70 0.60 0.70 0.60
Achievement 0.60 0.53 0.57 0.63 0.40 0.20 0.57 0.33 0.50 0.60 0.57 0.53 0.70 0.57 0.67 0.53
Proven success 0.40 0.40 0.60 0.60 0.40 0.20 0.70 0.40 0.50 0.40 0.60 0.60 0.60 0.50 0.70 0.60
Productivity 0.70 0.60 0.50 0.70 0.40 0.20 0.30 0.30 0.60 0.60 0.60 0.40 0.80 0.60 0.60 0.40
Work ethic 0.70 0.60 0.60 0.60 0.40 0.20 0.70 0.30 0.40 0.80 0.50 0.60 0.70 0.60 0.70 0.60
Power
Status 0.44 0.40 0.64 0.48 0.38 0.20 0.64 0.60 0.46 0.40 0.58 0.64 0.44 0.38 0.58 0.54
Reward 0.50 0.60 0.50 0.50 0.30 0.20 0.60 0.80 0.80 0.60 0.80 0.60 0.20 0.20 0.20 0.20
Coercive 0.50 0.20 0.60 0.20 0.30 0.20 0.80 0.50 0.20 0.40 0.20 0.60 0.50 0.50 0.80 0.50
Expert 0.60 0.70 0.50 0.30 0.80 0.20 0.30 0.30 0.50 0.50 0.50 0.50 0.80 0.80 0.50 0.60
Charasmatic 0.20 0.20 0.80 0.80 0.20 0.20 0.90 0.90 0.50 0.30 0.80 0.80 0.20 0.20 0.60 0.80
Legitimate
Authority 0.40 0.30 0.80 0.60 0.30 0.20 0.60 0.50 0.30 0.20 0.60 0.70 0.50 0.20 0.80 0.60

12. 13
Decision Element Assignment
Culture
• Hofstede compiled large database of cultural information
and determined patterns in five dimensions
– Uncertainty avoidance
– Power Distance
– Collectivism
– Masculinity / femininity
– Short or long term
• Many decision elements relate directly to these dimensions
• Hofstede’s dimension analysis on scale of 0 – 100
– Divide by 100 to obtain value as a probability

13. 14
Decision Element Assignment
Gender / Age / Achievement
• Little “uncontested” research on gender, but most agree
that, in general
– Men make decisions more efficiently than women
– Women are more risk averse and involve more people in decisions
– 0.4 or 0.6
• Age – As age goes up, so does experience, deliberation,
risk aversion and term orientation
• Achievement – Education level and work force position
relate directly to levels of capacity, responsibility,
achievement and power status

14. The Problem
You have learned of an opportunity to manufacture two new products, a pressure
sensor and a dual pressure / temperature sensor. The market for each product is
known if the products can be successfully developed. However, there is some
possibility that your R&D department will not be able to successfully develop
them. Production profit of $600,000 would be realized from selling the dual
sensor and of $400,000 from selling the pressure sensor. A production profit of
$800,000 would be realized from selling both (full profits not realized due to
capacity constraints). All profits account for production cost but do not include
development cost. If development is unsuccessful for a product, then there will be
no sales, and the development cost will be totally lost. Development cost would
be $300,000 for the dual sensor and $100,000 for the pressure sensor. You are the
production manager and must decide whether to develop the pressure sensor, the
dual sensor, both or neither. The probability of development success is somewhat
uncertain, although pressure sensor development success is at least 50%. Dual
sensor development relies on successful development of the pressure sensor and is
at least 50% of the development success of the pressure sensor. 15

15. Decision Tree
16
-$400K
-$300K
-$100K
$0
Alt 4 – Neither. E(x) = $0$0
Success ($800K) P >25%
Failure ($0)
Success ($600K) P >25%
Failure ($0)
Success ($300K) P >50%
Failure ($0)
$400K
-$400K
$300K
-$300K
$200K
-$100K
Alt 1 – Both. E(x) > -$100K
Alt 2 – Dual. E(x) > -$150K
Alt 3 – Pressure. E(x)>$100K
Figure 1 – Decision Tree

16. Scenario 1 (Routine Decision)
• You are the production manager for a profitable plant that is doing better
than its competitors.
• It is uncertain if your plant has a sustainable competitive advantage to
continue this trend in the long term.
• This development opportunity will be available for the next several
months. (Time availability is not a factor).
• The future market for these products is unknown.
• Your production team recommends manufacturing both products since
they are both profitable. (Decision point for participation)
• Your previous development decisions have all been profitable.
• Your plant manufactures 100’s of products – you make these types of
decisions on a weekly basis.
17

17. Scenario 2 (Important decision)
• You are the production manager for a profitable plant that is lagging
its competitors.
• It is uncertain if your plant has a sustainable competitive advantage.
• This development opportunity will be available for the next several
months. (Time availability is not a factor).
• The development cycle is one year, and you will not realize these
profits until next year. However, the profits should be sustainable for
several years.
• Your production team recommends manufacturing both products since
they are both profitable. (Decision point for participation)
• Your previous development decisions have all been profitable.
• Your plant manufactures 100’s of products – you make these types of
decisions on a weekly basis. 18

18. Scenario 3 (Important decision)
• You are the production manager for a profitable plant that is lagging
its competitors.
• It is uncertain if your plant has a sustainable competitive advantage.
• This development opportunity is only available if you make the
decision today.
• The future market for these products is unknown.
• Your production team recommends manufacturing both products since
they are both profitable. (Decision point for participation)
• This is your first production decision.
19

19. Scenario 1 (Routine Decision)
20
Maker
Enter Decision
Profile
Assign Decision
Tr ue
False
De c is io n ?
DM Ca p a b le o f Ra tio n a lTr ue
False
De c is io n ?
DM Ne e d to M a k e Tr ue
False
d e c is io n ?
Do e s DM m a k e
sensor
Record Pressure
Dispose Pressure
Tr ue
False
Gro u p De c is io n ?
do nothing
Record delay or Dispose Nothing
Tr ue
False
Gro u p De c is io n ? ? Tr ue
False
d e c is io n ? ?
Do e s DM m a k e
Record both Dispose both
d e c is io n ?
DM wa n t to m a k e Tr ue
False
Tr ue
False
d e c is io n s ? ? ?
Do e s DM m a k e Record dual Dispose dualTr ue
False
Is h e re a lly th is du m b ?
Tr ue
False
Ra n d o m c h o ic e
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

20. Scenario 2 (Important decision)
21
M a k e r
En te r De c i s i o n
Pro fi l e
As s i g n De c i s i o n Tr ue
False
De c i s io n ?
DM Ca p ab le of Ra ti o n al Tr ue
False
Do e s DM m a k e de c i s io n ?
s e n s o r
Re c o rd Pre s s u re
Di s p o s e Pre s s u re
Tr ue
False
Gro u p De c is i on ?
n o th i n g
Re c o rd d e l a y o r d o Di s p o s e No th i n g
Tr ue
False
Grou p De c i s io n ?? Tr ue
False
d e c is io n? ?
Do e s DM m a k e
Re c o rd b o th Di s p o s e b o t h
Tr ue
False
de c i s io n? ? ?
Do e s DM m a k e
Re c o rd d u a l Di s p o s e d u a l
Tr ue
False
Lo n g te rm ?
M id te rm ?
Tr ue
False
Tr ue
False
de c i s i on ?
Do es DM _ m id m ak e
Tr ue
False
de c i s i on ?
Do e s DM _ s h ort m a k e
Tr ue
False
Lo ng te rm ? ?
M id te rm ? ?
Tr ue
False
Tr ue
False
d e c i s io n ??
Do e s DM _ m id m a k e
d e c i s io n ??
Do e s DM _ s ho rt m a k eTr ue
False
Is he re al ly th is d u m b?
Tr ue
False
Tr ue
False
Ra n d o m s e le c tio n
Lo ng Te rm ? ? ?
Tr ue
False
Tr ue
False
M id Te rm ? ? ? Tr ue
False
d e c is io n? ? ?
Doe s DM _ m id m a k e
Tr ue
False
d e c is io n? ? ?
Do e s DM _ s h o rt m ak e
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

21. Scenario 3 (Important decision)
22
M a k e r
En te r De c is io n
Pro file
As s ig n De c is io n
Tr ue
False
Dec is ion?
DM Capable of RationalTr ue
False
dec is ion?
DM Tim e to m ake Tr ue
False
dec is ion?
Does DM m ak e
s e n s o r
Re c o rd Pre s s u re
Dis p o s e Pre s s u re
Tr ue
False
Group Dec is ion?
d o n o th in g
Re c o rd d e la y o r Dis p o s e No th in g
Tr ue
False
Group Dec is ion?? Tr ue
False
dec is ion??
Does DM m ak e
Re c o rd b o th Dis p o s e b o th
Is he really this dum b?
Tr ue
False
Tr ue
False
dec is ions ???
Does DM m ak e
Re c o rd d u a l Dis p o s e d u a l
Tr ue
False
Random choic e
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

22. Results
23
Attributes
The Field
Marshall
The Free
Spirit
Chinese
Field
Marshall
Female
Field
Marshall
Young Field
Marshall
Personality ENTJ ISFP ENTJ ENTJ ENTJ
Culture USA USA China USA USA
Gender Male Male Male Female Male
Age 40 40 40 40 18
Education MBA MBA MBA MBA HS
Scenario 1
Both 30.3% 13.9% 26.5% 47.3% 33.4%
Dual Sensor 0.2% 0.5% 0.3% 0.1% 1.6%
Pressure Sensor 45.2% 7.8% 55.8% 28.8% 20.1%
Delay or do nothing 24.3% 77.8% 17.4% 23.8% 45.0%
Scenario 2
Both 43.0% 50.7% 34.5% 60.8% 54.1%
Dual Sensor 0.5% 9.4% 0.6% 0.3% 6.2%
Pressure Sensor 55.6% 38.6% 64.8% 36.5% 39.3%
Delay or do nothing 0.8% 1.4% 0.0% 2.4% 0.4%
Scenario 3
Both 73.6% 72.5% 64.0% 86.7% 77.3%
Dual Sensor 0.3% 5.5% 0.4% 0.1% 3.2%
Pressure Sensor 25.7% 21.9% 35.5% 11.8% 19.5%
Delay or do nothing 0.3% 0.1% 0.1% 1.4% 0.1%

23. Key Findings
• For routine decisions, proposals should emphasize why the manager has a
fiduciary responsibility to continue process improvement since the
manager may be reluctant to make a decision.
• For important, but routine decisions, the manager is more likely to choose
the rational outcome. Proposals should emphasize why that rational
outcome is the best outcome based upon analysis.
• For urgent decisions, managers are more likely to side with the group.
Proposals to the production manager should discredit the group logic (if
wrong), then provide analysis for the optimal outcome.
• For less rational managers, proposals need to be tailored to discredit the
group logic (if wrong) and why the manager should continue process
improvement using qualitative (less technical) reasoning.
24

24. Conclusion
• This project provides an initial framework to determine
decision profiles and forecast outcomes.
• The results of the simulation runs are useful and can be
interpreted to influence senior leader decision.
• More detailed analysis is needed to relate cognitive and
behavioral tendencies within the information groups to
discrete decision elements for decision profile determination.
• No simulation model fits all – an operations researcher must
analyze each decision scenario to tailor the model to the
decision space.
25

25. Backups
26

26. Methodology
27
Arrival
Entity arrives with
decision profile
•MBTI
•Hofstede’s Dimension
•Sex
•Age
•Achievement
DP1
Decision Point 1
Is entity capable of
making any rational
decisions?
No
Yes DP2
Decision Point 2
Is entity capable of
making a rational
decision given the
decision space?
No
Yes DP3
Decision Point 3
Will entity make a
rational decision given
problem dynamics and
decision profile?
No
Yes
Strong
bias?
Yes
No
Rational
Outcome
Biased
Outcome
Alternate
Outcome
Alternate
Outcome
P=.25 P=.25 P=.25 P=.25

27. 28
Applicable Theories
• Hofstede’s Dimensional Analysis
• Myers Briggs Type Indicators
• Utility Theory
• Decision Trees
• Probabilistic Risk Analysis
• Monte Carlo Simulation

28. 29
Challenges
• Translating subjective decision-making processes into
measureable operations research.
– Marketing research and Hofstede’s dimensional analysis
– Additional criteria for the individual are harder to measure
(personality / achievement)
• Decision calculus database creation and validation
– 12,800 individual profiles
– City-sized (Houston) distribution needed to validate

29. 30
Timeline
• January 9-10, 2010: Presentation of proposal and
plan; Written project proposal and plan due to
advisor
• February 15, 2010: Progress Report #1 due to
advisor
• March 15, 2010: Progress Report #2 due to
advisor
• April 17-18, 2010: Written final project report
due; Final project presentation