IDEAS home Printed from https://ideas.repec.org/a/wly/syseng/v15y2012i4p483-493.html
   My bibliography  Save this article

Evaluating deep uncertainties in strategic priority‐setting with an application to facility energy investments

Author

Listed:
  • Christopher W. Karvetski
  • James H. Lambert

Abstract

A recent paper in this journal described the identification and integration of sources of risk in a systems engineering process model [Lambert, Jennings, and Joshi, Syst Eng 9(3) (2006), 187–198]. The earlier effort falls short in addressing sources of deep, nonprobabilistic uncertainty that should enter to strategic systems design and reengineering. Our new paper incorporates the earlier effort to a framework for evaluating which are the deep uncertainties that most influence a priority‐setting among investments in large‐scale systems with multiple stakeholders, and therefore warrant more investigation. The framework addresses that deep uncertainties are continuously discovered and reflective of diverse and unique stakeholder experiences, knowledge bases, and advocacy positions. Deep uncertainties are epistemic viewpoints across which the strategic priorities for investments will differ. The framework modifies existing tools of scenario analysis and multicriteria analysis to process and filter the deep uncertainties. The framework is demonstrated in an application to reengineering of an energy system for a defense installation where frequent outages are disruptive to scientific and other missions. The sources of deep uncertainty in the demonstration include regulatory, economic, environment, cyber‐threat, and others. The investments include innovative microturbine and microgrid technologies. An example of a result is that international economic disruption is relatively more influential than cyber‐threats to strategic priority‐setting for investing in a microgrid at the particular installation. ©2012 Wiley Periodicals, Inc. Syst Eng 15

Suggested Citation

  • Christopher W. Karvetski & James H. Lambert, 2012. "Evaluating deep uncertainties in strategic priority‐setting with an application to facility energy investments," Systems Engineering, John Wiley & Sons, vol. 15(4), pages 483-493, December.
    • Handle: RePEc:wly:syseng:v:15:y:2012:i:4:p:483-493
    DOI: 10.1002/sys.21215
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/sys.21215
    Download Restriction: no
    File URL: https://libkey.io/10.1002/sys.21215?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. F.P.M. Biemans & M.M. Lankhorst & W.B. Teeuw & R.G. van de Wetering, 2001. "Dealing with the complexity of business systems architecting," Systems Engineering, John Wiley & Sons, vol. 4(2), pages 118-133.
    2. JosÉ Figueira & Salvatore Greco & Matthias Ehrogott, 2005. "Multiple Criteria Decision Analysis: State of the Art Surveys," International Series in Operations Research and Management Science, Springer, number 978-0-387-23081-8, April.
    3. G. Maarten Bonnema, 2011. "Insight, innovation, and the big picture in system design," Systems Engineering, John Wiley & Sons, vol. 14(3), pages 223-238, September.
    4. Stanley Kaplan & B. John Garrick, 1981. "On The Quantitative Definition of Risk," Risk Analysis, John Wiley & Sons, vol. 1(1), pages 11-27, March.
    5. James H. Lambert & Rachel K. Jennings & Nilesh N. Joshi, 2006. "Integration of risk identification with business process models," Systems Engineering, John Wiley & Sons, vol. 9(3), pages 187-198, September.
    6. Robert J. Lempert & David G. Groves & Steven W. Popper & Steve C. Bankes, 2006. "A General, Analytic Method for Generating Robust Strategies and Narrative Scenarios," Management Science, INFORMS, vol. 52(4), pages 514-528, April.
    7. Thomas C. Beierle, 2002. "The Quality of Stakeholder‐Based Decisions," Risk Analysis, John Wiley & Sons, vol. 22(4), pages 739-749, August.
    8. Terje Aven, 2010. "On the Need for Restricting the Probabilistic Analysis in Risk Assessments to Variability," Risk Analysis, John Wiley & Sons, vol. 30(3), pages 354-360, March.
    9. Martin S. Schilling & Nadine Oeser & Cornelius Schaub, 2007. "How Effective Are Decision Analyses? Assessing Decision Process and Group Alignment Effects," Decision Analysis, INFORMS, vol. 4(4), pages 227-242, December.
    10. Paul Goodwin & George Wright, 2001. "Enhancing Strategy Evaluation in Scenario Planning: a Role for Decision Analysis," Journal of Management Studies, Wiley Blackwell, vol. 38(1), pages 1-16, January.
    11. Phelps, R. & Chan, C. & Kapsalis, S. C., 2001. "Does scenario planning affect performance? Two exploratory studies," Journal of Business Research, Elsevier, vol. 51(3), pages 223-232, March.
    12. Keeney,Ralph L. & Raiffa,Howard, 1993. "Decisions with Multiple Objectives," Cambridge Books, Cambridge University Press, number 9780521438834, October.
    13. Franco, L. Alberto & Montibeller, Gilberto, 2010. "Facilitated modelling in operational research," European Journal of Operational Research, Elsevier, vol. 205(3), pages 489-500, September.
    14. Yacov Y. Haimes, 2009. "On the Complex Definition of Risk: A Systems‐Based Approach," Risk Analysis, John Wiley & Sons, vol. 29(12), pages 1647-1654, December.
    15. Stan Kaplan & Yacov Y. Haimes & B. John Garrick, 2001. "Fitting Hierarchical Holographic Modeling into the Theory of Scenario Structuring and a Resulting Refinement to the Quantitative Definition of Risk," Risk Analysis, John Wiley & Sons, vol. 21(5), pages 807-807, October.
    16. Terje Aven, 2010. "Reply to Discussants on “The Need for Restricting the Probabilistic Analysis in Risk Assessments to Variability”," Risk Analysis, John Wiley & Sons, vol. 30(3), pages 381-384, March.
    17. James H. Lambert & Benjamin L. Schulte & Priya Sarda, 2005. "Tracking the complexity of interactions between risk incidents and engineering systems," Systems Engineering, John Wiley & Sons, vol. 8(3), pages 262-277, September.
    18. Theodor J Stewart, 2005. "Dealing with Uncertainties in MCDA," International Series in Operations Research & Management Science, in: Multiple Criteria Decision Analysis: State of the Art Surveys, chapter 0, pages 445-466, Springer.
    19. T.C. Kouloura & K.N. Genikomsakis & A.L. Protopapas, 2008. "Energy management in buildings: A systems approach," Systems Engineering, John Wiley & Sons, vol. 11(3), pages 263-275, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Moghadasi, Negin & Collier, Zachary A. & Koch, Andrew & Slutzky, David L. & Polmateer, Thomas L. & Manasco, Mark C. & Lambert, James H., 2022. "Trust and security of electric vehicle-to-grid systems and hardware supply chains," Reliability Engineering and System Safety, Elsevier, vol. 225(C).
    2. Elizabeth B. Connelly & Lisa M. Colosi & Andres F. Clarens & James H. Lambert, 2015. "Risk Analysis of Biofuels Industry for Aviation with Scenario‐Based Expert Elicitation," Systems Engineering, John Wiley & Sons, vol. 18(2), pages 178-191, March.
    3. Taylan G. Topcu & Konstantinos Triantis, 2022. "An ex-ante DEA method for representing contextual uncertainties and stakeholder risk preferences," Annals of Operations Research, Springer, vol. 309(1), pages 395-423, February.
    4. Bana e Costa, Carlos A. & Oliveira, Mónica D. & Rodrigues, Teresa C. & Vieira, Ana C.L., 2023. "Desirability–doability group judgment framework for the collaborative multicriteria evaluation of public policies," LSE Research Online Documents on Economics 118192, London School of Economics and Political Science, LSE Library.
    5. Helena Gaspars-Wieloch & Dominik Gawroński, 2024. "How can one improve SAW and max-min multi-criteria rankings based on uncertain decision rules?," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 34(1), pages 131-148.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. C Ram & G Montibeller & A Morton, 2011. "Extending the use of scenario planning and MCDA for the evaluation of strategic options," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(5), pages 817-829, May.
    2. Andreas Lindhe & Lars Rosén & Tommy Norberg & Jon Røstum & Thomas J. R. Pettersson, 2013. "Uncertainty modelling in multi-criteria analysis of water safety measures," Environment Systems and Decisions, Springer, vol. 33(2), pages 195-208, June.
    3. G Montibeller & L A Franco, 2011. "Raising the bar: strategic multi-criteria decision analysis," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(5), pages 855-867, May.
    4. James H. Lambert & Rachel K. Jennings & Nilesh N. Joshi, 2006. "Integration of risk identification with business process models," Systems Engineering, John Wiley & Sons, vol. 9(3), pages 187-198, September.
    5. Ram, Camelia, 2020. "Scenario presentation and scenario generation in multi-criteria assessments: An exploratory study," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    6. Ram, Camelia & Montibeller, Gilberto & Morton, Alec, 2011. "Extending the use of scenario planning and MCDA for the evaluation of strategic options," LSE Research Online Documents on Economics 32215, London School of Economics and Political Science, LSE Library.
    7. Vilkkumaa, Eeva & Liesiö, Juuso & Salo, Ahti & Ilmola-Sheppard, Leena, 2018. "Scenario-based portfolio model for building robust and proactive strategies," European Journal of Operational Research, Elsevier, vol. 266(1), pages 205-220.
    8. Yacov Y Haimes, 2012. "Strategic Preparedness for Recovery from Catastrophic Risks to Communities and Infrastructure Systems of Systems," Risk Analysis, John Wiley & Sons, vol. 32(11), pages 1834-1845, November.
    9. Barry Charles Ezell, 2007. "Infrastructure Vulnerability Assessment Model (I‐VAM)," Risk Analysis, John Wiley & Sons, vol. 27(3), pages 571-583, June.
    10. Judy Lawrence & Robert Bell & Adolf Stroombergen, 2019. "A Hybrid Process to Address Uncertainty and Changing Climate Risk in Coastal Areas Using Dynamic Adaptive Pathways Planning, Multi-Criteria Decision Analysis & Real Options Analysis: A New Zealand App," Sustainability, MDPI, vol. 11(2), pages 1-18, January.
    11. Angilella, Silvia & Corrente, Salvatore & Greco, Salvatore & Słowiński, Roman, 2016. "Robust Ordinal Regression and Stochastic Multiobjective Acceptability Analysis in multiple criteria hierarchy process for the Choquet integral preference model," Omega, Elsevier, vol. 63(C), pages 154-169.
    12. Schneider, Frank, 2008. "Multiple criteria decision making in application layer networks," Bayreuth Reports on Information Systems Management 36, University of Bayreuth, Chair of Information Systems Management.
    13. Yacov Y. Haimes, 2011. "On the Complex Quantification of Risk: Systems‐Based Perspective on Terrorism," Risk Analysis, John Wiley & Sons, vol. 31(8), pages 1175-1186, August.
    14. Jerzy Michnik & Artur Grabowski, 2020. "Modeling Uncertainty in the Wings Method Using Interval Arithmetic," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 19(01), pages 221-240, January.
    15. Isadora Antoniano‐Villalobos & Emanuele Borgonovo & Sumeda Siriwardena, 2018. "Which Parameters Are Important? Differential Importance Under Uncertainty," Risk Analysis, John Wiley & Sons, vol. 38(11), pages 2459-2477, November.
    16. Montibeller, Gilberto & Gummer, Haidee & Tumidei, Daniele, 2007. "Combining scenario planning and multi-criteria decision analysis in practice," LSE Research Online Documents on Economics 22709, London School of Economics and Political Science, LSE Library.
    17. Elizabeth B. Connelly & Lisa M. Colosi & Andres F. Clarens & James H. Lambert, 2015. "Risk Analysis of Biofuels Industry for Aviation with Scenario‐Based Expert Elicitation," Systems Engineering, John Wiley & Sons, vol. 18(2), pages 178-191, March.
    18. Scholten, Lisa & Schuwirth, Nele & Reichert, Peter & Lienert, Judit, 2015. "Tackling uncertainty in multi-criteria decision analysis – An application to water supply infrastructure planning," European Journal of Operational Research, Elsevier, vol. 242(1), pages 243-260.
    19. Massimo Andretta, 2014. "Some Considerations on the Definition of Risk Based on Concepts of Systems Theory and Probability," Risk Analysis, John Wiley & Sons, vol. 34(7), pages 1184-1195, July.
    20. Anil Markandya & Enrica Cian & Laurent Drouet & Josué M. Polanco-Martínez & Francesco Bosello, 2019. "Building Risk into the Mitigation/Adaptation Decisions simulated by Integrated Assessment Models," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(4), pages 1687-1721, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:syseng:v:15:y:2012:i:4:p:483-493. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)1520-6858 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.