course 300-cba

*Introduction to Choosing By Advantages

Katherine Blume, PE Southland Industries

Lean Construction [email protected]

19 October 2012

A decision making system for yielding sound, reliable, transparentgrounded choices.

- Jim Suhr- http://www.decisioninnovations.com/

* Choosing By Advantages (CBA)

* CBA - Purpose & Description

*A methodology for transparent decision making that consider

all factors, especially subjective and non-monetary

*Methods Decisions Actions Outcomes

*If the outcome matters, then the method matters

*CBA uses very specific language to ensure all discussion are

consistent.

* CBA - Application

*Strategic Planning

*Selection of subcontractor or vendors on a project

*Selecting personnel in an organization

*Value Engineering

*Selecting equipment for a project

*System selection on projects

* CBA - Principles

*Decisions must be anchored to the relevant facts

*Stakeholders contribute relevant subjective data

*Decisions must be based upon stakeholder values

*Decisions must be based on the importance of

advantages

* Building a Bridge

Question:What is the most important consideration in a new bridge to span the canyon? Aesthetics Economics Safety Speed of Construction

Answer: This question cannot be answered. Items above are factors, unrelated & unanchored. They are not Advantages, so they cannot be compared.

*

Alternative – Two or more mutually exclusive people, things, or plans from which one is to be chosen

EX: Choose site location for new office building

Factor – Element for comparison of Alternatives

EX: Proximity to freeways, proximity to airport, city zoning requirements, address

Usually many factors to consider, chosen by Stakeholders

Cannot compare or rank factors – unrelated to each other, no anchoring

Cost is not treated as a factor, but will be addressed in the last step in the CBA process.

* CBA – Buying a New Car – 1Alternatives & Evaluation Factors

Factors

New Car Alternatives

A B C

1. Passengers

2. Interior

3. Hwy MPG

4. Airbags

*

Anchoring – All decisions, attributes, questions, & importance must be based on (anchored to) relevant factual data.

Acquire correct data

Organize the data correctly

Use the data correctly

*

Criteria – Must or Want conditions of a FactorEX: Want easy access to freeway, must be

located in San Jose, must be walking distance to BART station

Attribute – Character, quantity, or quality of one alternative

EX: Within 1 mile of 280, 5 minute walk to BART

*

Factors


A B C1.

Passengers

2. Interior

3. Hwy MPG

4. Airbags

Criteria: 1 - Want min. 6 passenger capacity 2 - Want fancy interior

3 - Must have min. 28 MPG 4 – Must have min. 4 airbags

*

Factors


A B C1.

PassengersAttributes: 4 passengers 5 passengers 7 passengers

C: Min. 6

2. InteriorAttributes:

Leather seats, wood trim

Leather seats, vinyl trim Vinyl seats & trim

C: Fancy

3. Hwy MPGAttributes: 32 mpg 26 mpg 28 mpg

C: Min. 28

4. AirbagsAttributes: 4 airbags 6 airbags 4 airbags

C: Min. 4

Factors


A B C1.


C: Min. 6




C: Fancy


C: Min. 28


C: Min. 4

*

*Advantage – Difference between Attributes of two Alternatives OR benefit, gain, improvement, or bettermentEX: Quieter, more quiet, quietestComparative words (‐‐er or ‐‐est) OR with/withoutIf Advantages are equal, they are not a basis for a decision.An Advantage = a disadvantageAdvantage of one Attribute is disadvantage of another Double counting creates error, unsound choices

Advantages → posi ve processDisadvantages → nega ve process

*

Factors


A B C1.


Advantage: +1 passenger +3 passengers




Advantage: More appealing Appealing


Advantage: +6 mpg +2 mpg


Advantage: +2 airbags

Factors


A B C1.











*

*

Factors


A B C1.











* CBA Vocabulary

Alternative

Two or more people, things, or plans from which one is to be chosen

Factor (subjective)

Element for comparison of AlternativesCriteria (subjective)

Must or Want condition of a Factor

* CBA Vocabulary

Attribute (objective)Character, quantity, or quality of one alternative

Least Preferred Attribute (subjective)Stakeholder choice for each Factor

Advantage (objective)Difference between Attributes of two Alternatives

OR benefit, gain, improvement, or betterment

AnchoringAll decisions, attributes, questions, & importance

must be based on (anchored to) relevant factual data.

* Importance – Stakeholders’ subjective

comparison of Advantages across all Alternatives & Factors No score for least preferred Advantages for each

Factor Identify one most preferred Advantage for each

Factor Maximum value for one “Paramount Advantage” Importance of the remaining Advantages is ranked

in comparison to the Paramount Advantage

Total Importance Sum of Importance ratings for one Alternative Arithmetic is an objective process

* CBA – Buying a New Car – 8Paramount Advantage Importance

(Subjective

Factors


A B C1.










Advantage: +2 airbags 100

* CBA – Buying a New Car – 9Importance of Advantages (Subjective

Factors


A B C1.


Advantage: +1 passenger 30 +3 passengers 40




Advantage: More appealing 40 Appealing 30


Advantage: +6 mpg 70 +2 mpg 50



Criteria: 1 - Want min. 6 passenger capacity 2 - Want fancy interior

3 - Must have min. 28 MPG 4 – Must have min. 4 airbags

* CBA – Buying a New Car – 10Total Importance (Objective)

Factors


A B C1.











160

* CBA – Buying a New Car – 11Cost Data

Factors


A B C1.


Advantage: +1 passenger 30 +3 passengers 40




Advantage: More appealing 40 Appealing 30


Advantage: +6 mpg 70 +2 mpg 50



Total Importance 110 160 90

Cost $20,000 $25,000 $30,000

* Not CBA - Weight, Rate, CalculateUnanchored Judgments → Unsound Decisions

Weighted Ranks &

Review Scores are unrelated & unanchored

*CBA Steps1. Identify the alternatives.

2. Identify the factors & assign want or need criteria to each factor.

3. Identify the attributes for each alternative & factor.

4. Identify the least desirable attribute for each factor.

5. Determine the advantage of the remaining attributes over the least desirable.

6. Identify the paramount advantage.

7. Rank the remaining advantages .

8. Compare alternatives based upon their advantages.

*CBA Recap Sound outcomes require sound decision making

methods

Methods → Decisions → Ac ons → Outcome

Decision makers must learn & use sound methods

Decisions must be anchored to relevant factual data

Specific Vocabulary: Alternative, Factor, Criteria, Attribute, Advantage, Anchoring, Importance

Decisions must be based on the importance of advantages

Choosing By Advantages Study of: Heating Hot Water SystemAlternative 1 Alternative 2

Central Plant Heating Hot Water System

Distributed Heating Hot Water

Factor:

Criteria: AttributeAdvantage

Factor:Criteria: Attribute

Advantage

Factor: Criteria: Attribute

Advantage

Factor:


Factor:


Factor:


Total Importance 0 0Capital Cost




Factor: Square feet of Mechanical Space Required


Factor: Access for MaintenanceCriteria: Attribute

Advantage

Factor: Quantity of Boilers & StandbyCriteria: Attribute

Advantage

Factor: Ability to do Boiler Stack Heat Recovery


Factor: Pumping Energy


Factor: Construction Schedule







Criteria: Attribute 3200 square feet5100 sq ft required/17

roomsAdvantage

Factor: Access for MaintenanceCriteria: Attribute Outside secure perimeter Inside secure perimeter

Advantage

Factor: Quantity of Boilers & StandbyCriteria: Attribute 3 duty plus 1 standby 20 duty +7 Standby

Advantage


Criteria: Attribute10% increase in boiler

efficeincy Not requiredAdvantage


Criteria: AttributeMore required due to long distribution runs

Less required due to shorter piping runs

Advantage


Criteria: AttributeLonger due to site

distributionShorter - no site distribution

requiredAdvantage







roomsAdvantage 1300 Sq Ft.


Advantage Outside rather than in


Advantage Less total boilers



efficeincy Not requiredAdvantage Reduction X therms




Advantage 500,000 KwH per year




requiredAdvantage 2 weeks







roomsAdvantage 1300 Sq Ft. 2


Advantage Outside rather than in 4


Advantage Less total boilers 5



efficeincy Not requiredAdvantage Reduction X therms 8




Advantage 500,000 KwH per year 10




requiredAdvantage 2 weeks 1


*

Factors

Alternative Apples

MacIntosh Granny Smith Fuji

1. TartnessCriteria: W-low

Attributes:

Advantage:

2. SweetnessCriteria: W-med

Attributes:

Advantage:

3. CrispnessCriteria: M-high

Attributes:

Advantage:

Total Importance

* CBA Exercise 2Vacations

You will receive free airfare and hotel at one of the following locations:

New York City Orlando, Florida Napa, California Yellowstone National Park

Choose a location.1. As a team decide who the stakeholders are2. Identify at least 4 factors and provide attributes for

each factor.3. Identify the advantages and use them to determine

the location of your vacation!4. Be creative and have fun with this!

course 300-cba

Documents

advantages cba

cba application

cba principles

cba process

vinyl trim vinyl seats

wood trimleather seats

relevant subjective

cba purpose description