Decision-making, economic

COMPUTERS IN DEVELOPMENT DECISION MAKING, ECONOMICS, AND MARKET ANALYSIS... 

Keywords economic model, shareholder s profit, project cashflow, gross revenue, discounted cashflow, opex, capex, technical cost, tax, royalty, oil price, marker crude, capital allowance, discount rate, profitability indicators, net present value, rate of return, screening, ranking, expected monetary value, exploration decision making. 

A new facihty should be located ia an area that is economically suitable (see Plant location). At the same time, the social, environmental, and aesthetic effects must be considered. These decisions are part of land-use pohcies. As of this writing (1996), there is no national land-use program. However, there are certain laws that cover portions of this decision-making process and some states have such programs. 

Sometimes the expected consequences of an accident alone may provide you with sufficient information for decision-making purposes. Conventionally, the form of these estimates will be dictated by the purpose (concern) of the study (safety, economics, etc.). Absolute consequence estimates are best estimates of the impacts of an accident and, like frequency estimates, may have considerable uncertainty. Table 4 contains examples of typical consequence estimates obtained from QRA. These examples point to the difficulty in comparing various safety and economic results on a common basis—there is no common denominator. 

The object of a process control system is to make economic and sound decisions about the actions affecting the process. Data concerning the variations in process performance are collected and analyzed and decisions taken as to whether action on the process is or is not necessary to maintain production of conforming product (see Figure 9.1). However, process control and process capability are not one and the same, as illustrated in Figure 9.5. 

Secondly, accidents of the second type liave a catastrophic effect on production. Not only will tlie entire facility be demolished (in all likelihood), but a large fraction of the pool of trained personnel will be lost all at once. Who will train replacement persomiel if everyone is lost in tlie disaster Similar concerns make disruption in Uie community much greater for accidents of the second type. Some of these considerations can be factored into decision making as direct economic losses tliat increase the burden to both Uie company and Uie community for accidents of the second type. 

Bayesian networks for multivariate reasoning about cause and effect within R D with a flow bottleneck model (Fig. 11.6) to help combine scientific and economic aspects of decision making. This model can, where research process decisions affect potential candidate value, further incorporate simple estimation of how the candidate value varies based on the target product profile. Factors such as ease of dosing in this profile can then be causally linked to the relevant predictors within the research process (e.g., bioavailability), to model the value of the predictive methods that might be used and to perform sensitivity analysis of how R D process choices affect the expected added... 

Over time, of course, such awareness has continued to grow, although so too has the realization that it should not be cost that drives macro or micro decision-making, but cost-effectiveness. That is, the health-care system needs to achieve a good balance between the resources it uses (the costs) and the outcomes it achieves (the effectiveness). More recent developments, such as the establishment of the National Institute for Clinical Excellence, make abundantly clear both the enduring relevance of economic considerations when deciding how to use health service resources and the pervasive need to balance economic with clinical (and related) objectives. 

Health-care decision-makers may be required not only to make economic choices between conventional and atypical drugs, but also between individual atypical agents. There are few direct comparisons of atypical drugs. This is probably a result of the marketing aims of pharmaceutical manufacturers each has sought to establish the cost-effectiveness of their product compared with conventional... 

Pharmacoeconomics is a nascent discipline which has not yet provided clinicians and budget managers with the level of information necessary for confident decision-making. This is particularly true in psychiatry where the dearth of acceptable, reliably measurable clinical end points makes pharmacoeconomic evaluation even more complex and open to debate. Nonetheless, the data reviewed in this book, when placed alongside clinical data, do provide a framework for decision-making which is better informed and more realistic than any exclusively clinical assessment could be. Economic evaluations in all major mental illnesses, while some way from conclusive, are certainly providing valuable guidance to decision-makers both at policy level and in the clinic. 

Before discussing how to use process economics for decision-making, the most important costs that will be needed to compare options must first be reviewed. 

The economy is in principle inhabited by sellers and buyers. These buy and sell on a market. They are all utilitarian, which basically means that a moral good is to maximize pleasure/happiness. A moral bad is to minimize pleasure/happiness [7, 8]. When related to economic and political decision making, pleasure/happiness is often translated into utility [9]. So what is the decision rationale for the buyer and seller And how does the market function ... 

The theories on individual decision making from other scientific disciplines tend to stress factors such as status, social peer pressure, time availability, mood, cultural aspects, self-affirmation, altruism, and self-perception, as explanatory variables to decision making [12, 13]. These latter factors are far less favourable for economic valuation since the value would be unpredictable and varying dependent on situation. They may, however, provide an equally or even better description of decision making. 

The utilitarian man is a basis for decision making in economics. And it is a description that is valid in most market situations in the western societies at least. But, the utilitarian ethics is something that few other social sciences can find as rational for human decision making outside the usual market setting, as described earlier. 

Because some sort of valuation and ranking of options always have and always will take place in decision making. The choice is between using economic values derived in a consistent and transparent way (environmental economics approach), or to use arbitrary and random economic or other values estimated in a case-by-case setting. And the authors of this chapter are in favour of a transparent approach that is open for improvements. 

---