Decision Analysis Flashcards, test questions and answers
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What is Decision Analysis?
Decision analysis is a process used to identify, evaluate and solve complex problems. It involves the use of a variety of techniques and tools to analyze data, develop strategies and identify solutions that are in line with an organization’s objectives. Decision analysis can be used to make decisions about almost any type of problem or situation in business, government or even personal life.Decision analysis usually begins by identifying the goals and objectives of the decision maker. This involves an understanding of how decisions could impact stakeholders in terms of their values, interests and expectations. After setting these goals and objectives, decision makers then need to determine which type of analysis they should use depending on the complexity and scope of their situation. This could include methods such as cost-benefit analysis, game theory or other probabilistic models such as decision trees or Markov chains. Once a method has been chosen for the decision-making process, decision makers can then go about analyzing available data related to their problem. This includes both qualitative (such as customer feedback) and quantitative (such as financial figures). The results from this analysis are then used to form conclusions about what course of action should be taken in order for an organization to reach its desired outcome(s). Finally, all potential courses of action must be evaluated against each other using criteria like cost-benefit ratios or utility functions so that a final decision can be reached which best meets the overall objectives outlined at the beginning stages. Once implemented successfully, organizations may find that they are able to better manage risks while still achieving desired outcomes efficiently – making them more competitive in today’s ever-changing marketplace.