Decision under uncertainty

Decision under uncertainty - Decision Analysis Decision...

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1 DSCI 3223 Decision Analysis Decision Making Under Uncertainty Techniques play an important role in business, government, everyday life, college football rankings How can a manager provide a rational methodology for decision making and analysis in the face of uncertainty? How does a manager chose among alternatives in an optimal fashion when those alternatives may be numerous and conflicting?
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2 DSCI 3223 Components of Decision Making State An actual event that may occur in the future Decision Options from which a decision maker can chose Outcomes The result of a combination of states and decisions
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3 DSCI 3223 Payoff Table A means to organize states, decisions, and outcomes e.g., States Decisions a b 1 payoff 1a payoff 1b 2 payoff 2a payoff 2b
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DSCI 3223 Payoff Table Example An investor must decide among an apartment building, an office building, and a warehouse. States
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Decision under uncertainty - Decision Analysis Decision...

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