Digital Transformation and Systems: Structured Decision-Making and Procurement Models

Flashcards covering structured decision-making processes, procurement model improvements, and the application of probabilities and uncertainty analysis.

Gathering Information

The process of collecting data to support organizational decisions by reducing uncertainty and ensuring relevance to organizational goals.

Processing Information

The transformation of raw data into meaningful insights to support evidence-based decisions.

Compiling Information

The practice of organizing information to improve clarity, communication, and coordination across different levels of an organization.

Rational Decision-Making

A goal-oriented and logical approach to making choices that uses relevant, reliable information and considers alternatives while actively reducing bias.

Intervals (Procurement Analysis)

A method where ranges of values are used instead of fixed numbers (e.g., $R10\,000$ - $R12\,000$) to handle uncertainty in supplier data, pricing, and delivery times.

Relational Assessments

Methods that evaluate suppliers or options relative to one another rather than evaluating them in isolation.

Pairwise Comparison

A relational assessment technique that involves comparing two specific options, such as Supplier A and Supplier B, based on criteria like cost, quality, and reliability.

Weighted Scoring Models

A procurement evaluation method where specific weights are assigned to various criteria to calculate a final score for different options.

Multi-Criteria Decision Analysis (MCDA)

A structured strategy used to evaluate complex decisions by considering multiple different evaluation criteria simultaneously.

Total Cost of Ownership (TCO) Analysis

A comprehensive financial evaluation method that considers the total cost of a procurement decision over its entire lifespan.

Probabilities

Numerical likelihoods assigned to possible events (e.g., a $20\%$ chance of delay) to quantify outcomes instead of relying on guesswork.

Expected Value Analysis

A core principle of rational decision-making calculated by multiplying each outcome by its probability and summing the results, such as $(0.7 \times 100\,000) + (0.3 \times -30\,000) = R61\,000$.

Scenario Analysis

The evaluation of multiple potential outcomes, typically categorized as best-case, most likely case, and worst-case, to prevent over-reliance on optimistic or pessimistic assumptions.

Decision Trees

A formal decision model used to visualize and analyze complex decisions that involve multiple potential outcomes and paths.

Bayesian Analysis

A formal, structured decision model used for comparing alternatives under conditions of uncertainty.

Monte Carlo Simulation

A mathematical simulation model used to evaluate decision-making outcomes by accounting for uncertainty and probability distributions.

Dominance Analysis

A specific step used when combining intervals and relational assessments to rationally compare and select among alternatives.