One point will be allocated to organisations that

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ive and quantitative input. Chapter 6 showed that few, if any, decisions are based solely on quantitative analysis. It seems that decision-makers usually ultimately lack the faith to act purely on the basis of the quantitative output. In such cases qualitative influences, such as habit, instinct, intuition or imitation of others, are also used. Whichever, the reasons for disregarding quantitative analysis, or amending it, are to do with judgements of judgements, where the original judgements are inputs to quantitative analysis and the judgements of judgements pertain to strength of belief. Companies ought to have a systematic method for documenting and critically examining or calibrating their qualitative input. This would ensure transparent decision-making in alliances and partnerships. Much of the decision theory and industry literature fails to acknowledge the need for organisations to manage the qualitative and quantitative interface. There is no commercial software available that allows qualitative factors first, to be transparently included in the generation of the quantitative analysis, second, to be explored and modelled. Through recently established collaborative relationships, 167 the major players (CSIRO, Merak, Gaffney-Cline & Associates, Wood Mackenzie and DNV) are now working together in an attempt to deliver to the upstream decision-maker such software. In the company ranking, organisations that manage the qualitative/quantitative interface explicitly perhaps by using soft methods (for example, through simple multi attribute rating techniques) will be assigned two points. One point will be allocated to organisations that acknowledge the existence of both quantitative and qualitative inputs to the decision-making process but do not try to manage their interaction overtly. No points will be given to companies that do not recognise nor manage the qualitative and quantitative input to the decision-making process. This list represents the collection of decision analysis tools and concepts presented in Chapters 5 and 6. The techniques and ideas do not represent alternatives but rather a collection of analysis tools and principles to be used together to encourage more informed decision-making. The organisation that utilises the full spectrum of these techniques and ideas is perceived to be adopting a transparent approach to decisionmaking that manages the full range of qualitative and quantitative aspects of the process. COMPANY CRITERIA A Quantitative analysis 1 Holistic view 1 Discounted cash flow 1 Risk and uncertainty 0 definitions Carlo for Use Monte 0 prospect reserves reserve Take p10,p50,p90 0 cases Calculate an EMV, via 0 decision tree analysis Use Monte Carlo for 0 prospect economics Use Monte Carlo for 0 production reserves Use Monte Carlo for 0 production economics Portfolio theory 0 Option theory 0 Preference theory 0 Qualitative and quantitative 0 TOTAL 3 Table 7.1: Ranking of companies by green=1 point and blue=0 points) BCDE FGH I J...
View Full Document

This document was uploaded on 03/30/2014.

Ask a homework question - tutors are online