Sequential Decision Making
Presenter
PhD candidate
Technology & Operations
Ross School of Business
University of Michigan
Time and location
North Quad 4330, Wednesday (1:00-2:00) pm
Abstract
Managing sequential design change decisions in engineering project management. In the automotive industry, the project for the launch of a vehicle usually begins several years before the planned launch time. During the process, each car part (such as seat) will subject to a series of design change opportunities due to marketing, engineering, or safety needs. Such opportunities happen in sequential order, and a decision of whether to conduct the design change or not must be made as soon as the opportunity arrives. i.e., it is not possible to wait and “bundle” these decisions. Such design changes could lead to a substantial price increase over time. The automotive OEM we interact with is considering an intervention to control such price increase by imposing a pre-defined budget for each car part. However, whether such intervention will be effective is unclear, as human subjects have limited abilities in doing forward planning or backward induction. The expected deliverables of this project will be: (1) an experimental and behavioral analysis regarding how human subjects make such sequential design change decisions with a pre-defined budget; (2) intervention strategies to help human subjects improve their performance.