19-691 Special Topics: Decision-Making Methods for Innovation Management

6 units, Carnegie Mellon University

The course - Finance II for Innovation Management - will have five main elements - all focused around the innovation decision-making process: Overview of Decision Quality - a framework for judging the quality of decisions that are made. This discussion will examine the elements of a good decision-making process and the key elements of such a process vs. the elements of poorly structured decision-making processes. Decision Biases - an examination of the common types of biases that occur in strategic decision-making. Scoring Models / Analytical Hierarchy Process (AHP) - basic concepts around both for choice of R&D projects - with a discussion to the limitations to both. Decision Analysis Concepts - Basic concepts around an appropriate decision-making process using decision analysis that will be incorporated into a rigorous analysis approach and various case studies Real Options Theory - an advanced decision-making technique that has gained acceptance in industries such as the pharmaceutical industry and the petroleum industry - which will include discussion of real option fundamentals and methods to perform analysis using this method.

Prerequisites: 19-689 (min C)

Offered: Fall 2026, Fall 2025

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