Decision analysis
Decision Analysis
Decision Analysis (pronounced: de-ci-sion a-na-ly-sis) is a systematic, quantitative and visual approach to addressing and informing complex decisions. It involves much more than just throwing numbers at a problem.
Etymology
The term "Decision Analysis" is derived from the English words "decision" which means the act of or need for making up one's mind, and "analysis" which means a detailed examination of the elements or structure of something.
Definition
Decision Analysis is a process designed to help with decision making in situations of uncertainty. It uses a structured approach to evaluate both subjective and objective information to help create a visual representation of the decision.
Related Terms
- Decision Tree: A decision tree is a decision support tool that uses a tree-like model of decisions and their possible consequences, including chance event outcomes, resource costs, and utility.
- Risk Analysis: Risk analysis is the process of identifying and analyzing potential issues that could negatively impact key business initiatives or critical projects in order to help organizations avoid or mitigate those risks.
- Cost-Benefit Analysis: Cost-benefit analysis is a systematic approach to estimating the strengths and weaknesses of alternatives used to determine options which provide the best approach to achieving benefits while preserving savings.
- Expected Value: Expected value is a key concept in economics, finance, and mathematics that refers to an anticipated value for a given investment at some point in the future.
- Uncertainty: Uncertainty refers to situations involving imperfect or unknown information.
- Probability: Probability is the branch of mathematics concerning numerical descriptions of how likely an event is to occur, or how likely it is that a proposition is true.
- Utility Function: A utility function is a measure of preferences over a set of goods and services; it represents satisfaction experienced by the consumer of a good.
- Sensitivity Analysis: Sensitivity analysis is the study of how the uncertainty in the output of a mathematical model or system can be divided and allocated to different sources of uncertainty in its inputs.
See Also
External links
- Medical encyclopedia article on Decision analysis
- Wikipedia's article - Decision analysis
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