Normative perspectives on engineering systems design

This paper proposes a normative decision analytic framework for the design of engineering systems. The approach distinguishes two main types of design enterprises: profit maximizing firms and federal government organizations. For a profit maximizing firm, the approach proposes that the firm should maximize the expected utility of total shareholder return. Within this framework, a fundamental axiom is proposed: that there be no division within an organization that will accept a project that another division within the same organization, and with the same information and resources, would reject. This axiom translates into the necessity of a corporate utility function: divisions within the same organization will operate with the same risk attitude. For a federal government organization (such as NASA), the approach proposes an axiom that relates requirements-based design to value-based design: that there be no design outside the requirements region that is preferred to a design within the requirements region. This axiom leads to the necessity of assigning trade-offs to design requirements and the necessity of a corporate value function. Consequences of these two axioms exhibit the arbitrariness that exists in a variety of widely used systems engineering and requirements-based design approaches.