Main Module One
Decision Analysis

Learning Objectives

At the end of the module, the student will know and do the following:

 Understand the structure of a decision problem

Know the assumptions and limitations of decision analysis techniques

Know how to create and interpret payoff tables and decision trees

Know how to select decision alternatives under conditions of risk

Know how to select decision alternatives under conditions of uncertainty

Know how to compute expected values

Understand the concepts of sensitivity analysis and the value of information

Be able to use a computer program for decision analysis applications

Readings

Introduction to Management Science, 11th edition, by Bernard W. Taylor III. Pearson – Prentice Hall Chap 1 Introduction
Chap 12	Decision Analysis

Content

The following topics are included in Module One.

Introduction to Decision Analysis

Structuring the Decision Problem

Decision Making without Probabilities

Decision Making with Probabilities

The Value of Information