Program and Design Decisions in an Uncertain and Dynamic Market: Making Engineering Choices Matter 2005-01-3433
The success of a modern, complex engineering program is inherently a dynamic economic exercise. Because of this it is not possible to fully grasp what decisions are important to the success of a program using only the typical static or “frozen” design methods and processes. This paper attempts to provide a basic understanding of these design processes and illustrate what they leave to be desired when used in a true market environment. Further, this paper illustrates a dynamic method using tools from engineering, management, and finance to overcome these weaknesses. The dynamic environment allows decision parameters and metrics to change, along with the potential for true competition. Furthermore, it allows the engineer to determine which design choices matter most to the creation of a successful program and how to make the most appropriate choices in the face of uncertainty. Finally, this paper provides a simple example application using regulatory uncertainty to demonstrate the value of the method.