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Frontiers of Engineering: Reports on Leading-Edge by National Academy of Engineering

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By National Academy of Engineering

Papers from the 7th Annual Symposium on Frontiers of Engineering. Softcover.

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Journal of Management in Engineering 11(5):24–32. Improbable Is Not Impossible: Decision Making Under Uncertainty LINDA K. NOZICK School of Civil and Environmental Engineering Cornell University Ithaca, New York INTRODUCTION Risk is the result of chance and negative outcome. An earthquake strikes. A bomb planted by a terrorist explodes on a crowded street. A recession hits. Risk is inherent in every aspect of our lives. Personal decisions, such as which job to take or which investments to make, involve risk, as do decisions by corporations and governments.

At first glance, this change should facilitate the construction process. However, it may take time for workers to learn how to operate the new equipment, or it may be difficult to coordinate use of the new equipment with subsequent processes. If the “fix” reduces productivity and increases coordination problems, changing equipment can actually increase the delay in the construction schedule. These feedbacks must be identified and analyzed before a change is made. Once major feedbacks have been identified, construction processes can be simulated more realistically before actual resources are committed.

Therefore, in the analysis here, the estimates of E[Yi] and Var[Yi] are propagated using discrete intervals. These calculations are embedded in a labelcorrecting algorithm along with the concept of partial stochastic dominance discussed above. This allows us to efficiently search for “good” paths. For more information on the algorithm, see Chang et al. (2001a, 2001b). A key decision in this case is determining the best path through the New York City area. One option is to pass through the city.

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