Decision Analysis_myslides

Decision Analysis_myslides - DA-1Decision AnalysisDecision...

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Unformatted text preview: DA-1Decision AnalysisDecision Making Under UncertaintyDA-2Steps in Simple Decision AnalysisList decision alternatives.List possible outcomes of uncertain events and their probabilities.List the expected payoff for each combination of alternative and outcome.Resolve the decision problem according to the risk attitude of the decision maker.DA-3Decision TreesDecision NodeBranches arealternatives. Decision Maker chooses a branch to follow.Event NodeBranches arepossible outcomes. Act of nature determines the outcome. Decision maker does not have controlDA-4Decision Resolution Making the DecisionRisk Indifferent. Use expected monetary value (EMV). Willing to play the odds.Most Risk-Seeking (Maximax). Optimists Method.For each alternative, look at the best case. Choose the alternative with the highest return in the best case.Most Risk-Averse (Maximin). Pessimists Method....
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This note was uploaded on 10/16/2011 for the course DS 412 taught by Professor Eng during the Spring '07 term at S.F. State.

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Decision Analysis_myslides - DA-1Decision AnalysisDecision...

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