This document outlines the key steps and concepts in decision making. It discusses the six steps in decision making: 1) define the problem, 2) list alternatives, 3) identify outcomes, 4) list payoffs, 5) select a decision model, and 6) make a decision. It also describes three types of decision environments: decision making under certainty, uncertainty, and risk. Finally, it discusses approaches for decision making under uncertainty like maximax and maximin, and the use of expected monetary value for decision making under risk.
1. Chapter 3
To accompany
Quantitative Analysis for Management, Eleventh Edition,
by Render, Stair, and Hanna
Power Point slides created by Brian Peterson
Decision Analysis