BUSI 2013 Business Decisions Analysis
Business Decisions Analysis is a systematic, quantitative and visual method for solving and evaluating important decisions that companies sometimes face. Decision analysis uses a variety of tools to assess all the information needed to aid in the decision-making process and combines different aspects of psychology, management, learning, and economics. It is typically used to evaluate decisions made in the context of many variables and with many possible outcomes or goals. This process can be used by individuals or groups trying to make decisions related to risk management, capital investment, and strategic business decisions.
Alternatives and possible solutions, as well as graphical representations of problems and uncertainties, can be generated in decision trees or influence diagrams. More sophisticated computer models have also been developed to aid the decision analysis process.
The purpose of such tools is to provide decision-makers with alternatives when trying to achieve business goals, while at the same time describing the associated uncertainties and providing measures of how the goals will be achieved. Uncertainty is usually expressed as a probability, while friction between conflicting goals is viewed in terms of tradeoffs and utility functions. In other words, objectives are viewed in terms of their value or (if achieved) the expected value to the organization.
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