L17-20: Asset Management Flashcards Preview

Management > L17-20: Asset Management > Flashcards

Flashcards in L17-20: Asset Management Deck (60):
1

What is an asset?

An item of property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies.

2

What is asset management?

A systematic process of deploying, operating, maintaining, upgrading, and disposing of assets cost-effectively.

3

What is the objectie of sustainable management of infrastructure?

To provide the desired level of service in the most cost effective manner for present and future customers.

4

What are key components of sustainable management of infrastructure?

- about figuring out the best way to use our limited resources
- based on performance goals
- dependent on sufficient and accurate data
- focused on long term effects of short term solutions

5

What are some roles of infrastructure?

- economic productivity
- communication
- education
- health and safety
- mobilty
- standard of living

6

What is infrastructure challenged by?

- dependence on foreign oil
- climate change
- sustainability challenges
- disasters

7

What are the 5 levels on the hierarchy of urban needs (from top to bottom)

- openness to influence
- cultural offerings
- education, research & development
- effective infrastructure
- basic services

8

Why is asset management in infrastructure important?

- congestion
- preserving investments
- aging infrastructure
- economic growth

9

What are the benefits of asset management?

- Performance and cost effectiveness
- Communication, accountability and credibility

10

Explain performance and cost effective results from asset managment.

- deliver policy goals and objectives
- lower long-term costs for infrastructure preservation
- improved performance and service to customers
- improved use of available resources
- flexibility to make decisions based on performance

11

Explain communication, accountability and credibility benefits from asset management.

- improved communication and collaboration within agency, across agencies, and with customers
- improve credibility and accountability for decisions

12

What are the benefits of sustainable management of infrastructure (SMI)?

- improved understanding of service level options, costs and risks
- improved decision making based on benefits and cost of alternatives
- communicate and justify funding requirements to internal and external parties
- demonstrate responsible stewardship of assets

13

Explain the short term mindset.

- natural tendency ( I want things now)
- instant delivery environment
- political preference
- self interest prevalent

14

Explain the long term mindset.

- considers next generation
- requires participation internally and externally
- leaders initiate by example

15

Important aspects of long term thinking:

- requires discipline
- must be incorporated into society not just engineers
- political pressure should set example for society to follow
- should be obvious as the same rules dictate our life expectancy

16

What are key components of an asset managment plan?

- customer expectations/ legislative requirements
- strategic planning process
- service level review process
- asset managment process
- consideration for asset/ non-asset solutions
- implement asset management solutions

17

What is the core focus of asset managment?

- Resource allocation

18

What is level of service?

- the outputs a customer recieves from the organisation

19

What does level of service describe?

What the organisation is tending to deliver

20

What are commonely related service attributes?

- quality
- reliability
- responsiveness
- sustainability
- accessibility
- cost

21

How do we measure LOS?

Develop performance measures using SMARTER rule:

S-pecific
M-easurable
A-chievable
R-elevant
T-ime bound
E-valuation
R-e assess

22

What should all AM systems have in common?

- policy driven
- performance based
- options evaluated
- decisions based on quality information
- clear accountability

23

Explain the Policy Driven principle of asset management.

Decisions reflect policy goals and objectives that define desired system condition and service levels.

24

Explain the Performance Based principle of asset management.

Clear measures of performance and target service leves are established

25

Explain the Options Evaluated principle of asset managment.

Comprehensive choices and tradeoffs are examined at each level of decision making

26

Explain the Decision Based on Quality Information principle of asset management.

Management systems and tools are used

27

Explain the Clear Accountability principle of AM.

Performance results are monitored and reported.

28

Important components of implementation of AM.

- AM requires a shift in culture from managing projects to managing a system

- Implementation can be initiated by any organisational unit and scope can vary in size and complexity

29

AM success requires:

top management support and buy in staff across the agency

30

Expected Value =

(odds of gain) * (value of gain)

31

What are two errors that people make in decision making?

- Error in estimating the odds of gain
- Error in the value of gain

32

Why do people commonly make mistakes in estimate odds?

People often think things that come to mind quicker seem more probable.

33

Why do people struggle to estimate the value of gain?

Comparisons change the way we value things, which is often used against us by placing an over priced item next to another item to make us think it is cheaper.

34

True or false.
About 90-95% of our decisions, even important ones, are made on the emotional, instinctual level

True

"The rational brain is not very good at being rational, but it is good at tationalising what the emotional brain has already decided."

35

Why do we make bad decisions?

- Our brains are evolved for a very different world than what we live in (where highest priority was to eat and mate). We must learn how to un-learn our natural instinct

36

Why do we need decision making tools in asset management?

- instinctive decision making is extremely irrational most of the time
-performance measures (some more important than others) that we want to combine, but may have different units.
- compare one solution against another to make decisions

37

What is mult criteria analysis (MCA)?

- decision technique that considers more than one criterion
- commonly used where benefit to cost ratios are difficult to accurately define

38

What is the method for multi criteria analysis?

1. Select decision criteria or indicators
2. Identify weightings for each indicator
3. Assess the indicator value for each option
4. Calculate the overall results

39

What are the disadvantage of MCA?

- Weighting factors are difficult to agree on by many parties
- There may be inconsistencies within weighting factors

40

What are the advantage of MCA?

- Fast and dirty approach
- Can be combined with other tools to become very powerful

41

What is risk based decision making?

- decision technique that identifies high risk areas that should be addressed
Risk = Probability x Consequence
- risk is often used to balance the funding gap. Understanding this gap will lead to better decision making.

42

What is Analytical Hierarchy Process?

- decision technique that uses in depth pair wise comparison method.

43

What are the advantages of the Analytical Hierarchy Process (AHP)?

- Based on mathematical decision theory and is an industry standard
- Generates ratio data

44

What are the disadvantages of the Analytical Hierarchy Process?

- labour intensive
- participants perceive the tool as a 'black box' if they do not understand the mathematical theory.

45

What are the steps for AHP?

1. Define objective and decision options
2. Structure elements in criteria, sub-criteria, alternatives
3. Make pair wise comparisons of elements in each group
4. Calculate weighting and consistency ratio
5. Evaluate alternatives according to weighting
6. Evaluate Benefit Cost Analysis (BCA)
7. Make decision

46

Why is it important to do a consistency check in AHP?

- ensure that participants have gone through the pairwise comparisons and put in some careful thought.
- analyses the matrix and tells us if it makes sense

47

How do we check for consistency using AHP?

{Ws}=[C]{W}
{Consis}={Ws}.{1/w} dot product
lambda = average({Consis})
Consistency Index CI=(lambda-n)/(n-1)
Consistency Ratio CR = CI / RI

48

What are the limitations of AHP?

- If measures are not relevant the AHP process is meaningless
- CR tells us if our matrix is consistent, however humans are naturally inconsistent so many iterations may be required for consistent rational results
-May have more more performance measures, and the number of pairwise comparisons increase drastically with the increase of n
- With large n, humans do not tend to value each pairwise comparison equally. Get lazy, influence decision.
- Only an approximation of {w} and lambda

49

What is Delphi Method?

- a structured communication technique that seeks to minimise variance
- requires a panel of experts

50

What is Delphi Method based on?

- the principle that decisions form a structured group of individuals is more accurate than those from unstructured groups
- the assumption that group judgments are more valid than individual judgments.

51

How does Delphi method work?

- the experts answer questionnaires in two or more rounds
- after each round, a facilitator provides an anonymous summary of the expert's decisions from the previous round as well as the reasons for their judgements
- In the next round, experts are encouraged to revise their earlier answers in light of the replies of other members of their panel
-process is stopped after a predefined stop criterion

52

Things affecting decision making.

- cognitive fluency
- sunk cost fallacy
- self serving bias
- sudo-diagnostic information
- subtlety diagnostic information
- sorting relevance
- consider both inside & outside view
- consider both up down & bottom up point of view

53

What is cognitive fluency?

easy does not equal truth
How easy and idea is to process and understand and how it affects our decision making.

When something sounds about right you should question it

54

What is an example of sunk cost fallacy?

Not leaving a bad movie before it ends because you paid for it.
Results in same cost, but lose time.

Focus should be on future costs/ benefits

55

What is self serving bias?

If we win it is our success, if we lose it is someone's fault..

Research has shown when operating in groups, decisions are more rational.

56

What is sudo-diagnostic information?

- information that you see that isn't really relevant but you think it is
- you see there is a correlation and imply there is a causation

57

What is subtlety diagnostic information?

- information that is important but you don't think it is.

58

What is sorting relevance?

- how we take on new incoming information

- be aware of conformation bias: once you have decided on something, new information has less of an impact
- you either blow it off or you interpret the information so that it is favourable for you.

59

What does consider both inside vs outside view mean?

- Inside view is always optimistic
- Outside view often gives a less optimistic, but more realistic view
Consider both of these views

60

What does consider both Up Down & Bottom UP point of view mean?

Think Up Down:
- aims - conclusions
- actions - causes

Think Bottom Up:
- conclusions - aims
- causes - actions