Decision Analysis

finality Analysis Page 1 of 4    finality Analysis Donna L. Christian, Strayer University Winter Quarter (MAT 540) Instructor: Mune Lokesh March 11, 2012 Decision Analysis Page 2 of 4    In billet today, many end-making smudges occur under conditions of uncertainty. The demand for a carrefour apprize be one number this week and image that number next week or vice versa. thither are several decision-making techniques to aid the decision overlord in dealing with these types of uncertainties. There are two classes of decision situations, situations where probabilities can be assigned to future occurrences and probabilities that cannot be assigned. A decision-making situation includes several components, the decision itself and the actual events that can occur in the future, we refer to those as states of nature. The states of nature can be respectable and bad economic conditions, cold or warm weather, and an chance event or no accident. The state of nature that does occur leave determine the outcome of the decision, but the decision maker has no control over which state occurs. Payoff tables are create so that the decision situations can be analyzed.

Using a payoff table is a means of organizing a decision situation, including the payoffs from different decisions, given the various states of nature. Each decision will result in a specific outcome like to the particular state of nature that occurs in the future. Payoffs are normally expressed as revenues or costs, but the can be expressed in a variety of values. Once a payoff table has been organized, there are several criteria easy for making the actual decision. One of those is the maximax criterion. The maximax criterion results in the uttermost of the maximum payoffs. The decision maker would be very optimistic. They would acquit the most favorable state of nature would occur. When considering profit, the decision maker would pick the state of nature that gains the highest revenue. When considering... If you want to get a full essay, order it on our website: Orderessay

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