SUMMARY

The field of risk management provides insights into the management of risk in engineering design by identifying avenues of risk mitigation and highlighting so-called “business risks” related to the consumption of resources in the design phase. Existing methods for design under uncertainty either ignore some avenues of risk mitigation or ignore the business risks of design. A generic framework for risk management in design should enable the consideration of all types of risk mitigation and impose no preferences on the designer. It is our view that every design process decision is in effect a risk mitigation decision because every design task affects the risk situation. Thus, by focusing on design process decisions, a theoretical foundation for risk mitigation decisions can be identified. In this work, a decision theoretic model is proposed for making decisions about the design process. The theoretical foundations and internal consistency of this model are established based on utility theory. Approximations and assumptions are made in order to solve the decision model efficiently. The model is then exercised to determine the preferred decision alternative from a set of design tasks, given a set of parameters that characterize the design situation. A study is performed to determine the impact of these design situation parameters on the preferred decision alternative, and the results are generalized to gain insight into practical methods for risk management in design.