DECISION ANALYSIS

DECISION ANALYSIS. Decision Analysis with probabilities. Decision Making without Probabilities Decision Making with Probabilities. Payoff Tables. The consequence resulting from a specific combination of a decision alternative and a state of nature is a payoff .

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decision analysis

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Decision Analysis

Decision Analysis. Structuring the Decision Problem Decision Making Without Probabilities Decision Making with Probabilities Expected Value of Perfect Information Decision Analysis with Sample Information Developing a Decision Strategy Expected Value of Sample Information.

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Decision Analysis

Learning Objectives. List the steps of the decision-making processDescribe the types of decision-making environmentsMake decisions under uncertaintyUse probability values to make decisions under risk. After completing this chapter, students will be able to:. Learning Objectives. Develop accurate

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Decision Analysis

Decision Analysis. (to p2). What is it? What is the objective? More example Tutorial: 8 th ed:: 5, 18, 26, 37 9 th ed: 3, 12, 17, 24. (to p5). (to p50). What is it?. It concerns with making a decision or an action based on a series of possible outcomes

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Decision Analysis

Decision Analysis. What is decision analysis?. Based on expected utility theory Used in conditions of uncertainty Decision process logical and rational

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Decision Analysis

Decision Analysis. Advanced Training in Clinical Research DCEA Lecture 1 January 7, 2010 UCSF Department of Epidemiology and Biostatistics James G. Kahn, MD, MPH jgkahn@ucsf.edu. Objectives. To understand what decision analysis is and when it might be used

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Decision Analysis

Decision Analysis. Basic Terms. Decision Alternatives (eg. Production quantities) States of Nature (eg. Condition of economy) Payoffs ($ outcome of a choice assuming a state of nature) Criteria (eg. Expected Value). What kinds of problems?. Alternatives known

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Decision Analysis

Decision Analysis. Alternatives and States of Nature Good Decisions vs. Good Outcomes Payoff Matrix Decision Trees Utility Functions Decisions under Uncertainty Decisions under Risk. Decision Analysis - Payoff Tables. Case Problem - (A) p. 38. Decision Analysis - Payoff Tables.

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Decision Analysis

Decision Analysis. OPS 370. Decision Theory. A. B. a. b. c. d. e. Decision Theory. A. a. b. c. . Decision Theory. Steps: 1. A. B. 2. A. 3. 4. 5. Payoff Table. Shows Expected Payoffs for Various States of Nature. Decision Environments. A. a. B. a. C.

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Decision Analysis (Decision Trees )

Decision Analysis (Decision Trees ). Y. İlker TOPCU , Ph .D. www.ilkertopcu. net www. ilkertopcu .org www. ilkertopcu . info www. facebook .com/ yitopcu twitter .com/ yitopcu. Decision Trees. A decision tree is a diagram consisting of decision nodes (squares)

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Decision Analysis

Decision Analysis. Prof. Carl Thompson cat4@york.ac.uk. What is decision analysis?. Based on a normative theory of decision making: subjective expected utility theory (SEUT) Assumes Decision process logical and rational

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Decision Analysis

R. Keeney April 4, 2012. Decision Analysis. Game Theory. A decision maker wants to behave optimally but is faced with an opponent Nature – offers uncertain outcomes Competition – another optimizing decision maker We focus on simple examples using payoff matrix

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Decision Analysis

Decision Analysis. How to make decisions when faced with uncertain or imperfect information. Definitions: States of Nature - future events not under the decision makers control Alternatives - different courses of action intended to solve a problem

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Decision Analysis

Decision Analysis. I begin here with an example. In the table below you see that a firm has three alternatives that it can choose from, but it does not know what future conditions will be. States of Nature Decision Alternatives s1 s2 d1 8 7 d2 14 5 d3 20 -9

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Decision Analysis

Chapter 15. Decision Analysis. Introduction to Decision Analysis. Models help managers gain insight and understanding, but they can’t make decisions. Decision making often remains a difficult task due to: Uncertainty regarding the future Conflicting values or objectives

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Decision Analysis

Decision Analysis. Introduction. What is involved in making a good decision? Decision theory is an analytic and systematic approach to the study of decision making

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Decision Analysis-Decision Trees

Decision Analysis-Decision Trees. A decision tree is a graphical representation of every possible sequence of decision and random outcomes (states of nature) that can occur within a given decision making problem.

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Decision Analysis

Decision Analysis. Ultimate objective of all engineering analysis Uncertainty always exist, hence satisfactory performance not guaranteed More conservative design reduces risk Same design SF for all? Component vs. System Risk Proper tradeoff between risk and investment.

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Decision Analysis

Decision Analysis. Chapter 3. Learning Objectives. After completing this chapter, students will be able to:. List the steps of the decision-making process Describe the types of decision-making environments Make decisions under uncertainty Use probability values to make decisions under risk.

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Decision Analysis

Decision Analysis. Decision Trees. Any problem that can be presented in a decision table can also be graphically represented in a decision tree Decision trees are most beneficial when a sequence of decisions must be made

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