Purpose:
Decision Analysis formally assess a problem and possible decision in order to determine the value of alternate outcomes under conditions of uncertainty.
Business Analysis Body of Knowledge® (BABOK®)
Decision Analysis is a systematic, quantitative, and visual approach to address and evaluate the important choices that the businesses face. This technique was founded in the year 1964 by Ronald A. Howard, a professor of management science and engineering at Stanford University. It is used by the large and the small organizations, when making various types of decisions including management, operations, marketing, capital investments etc. The goal of decision analysis process is to provide the decision makers with alternate solutions when attempting to achieve the objective for the business. The decision trees and influenced diagrams are used for the visual representation that help in the decision analysis process. It also incorporates the aspects of psychology, management operations, and economics.
The decision analysis is the act of choosing a single course of action from several uncertain outcomes with different values. It examines and models the possible consequences of different decisions about a given problem. The decision analysis approach depends on the level of uncertainty, risk, quality of information, and the available evaluation criteria. The decision analysis requires an understanding of the values, goals, and objectives that are relevant to the decision problem, the nature of the decision made, the areas of uncertainty, and the consequences of each potential decision. The outcome value may take different forms depending on the domain, and it include financial value, scoring, and relative ranking approach. The decision analysis evaluate different outcome values under conditions of uncertainty and highly complex situation.
Some of the articles related to Decision Analysis techniques are as follows,
The decision analysis template consists of five most important things. They are, defining the problem statement, defining the alternative solutions, evaluating the alternative solutions, choosing a suitable solution, and implementing it. The decision analysis determine a logical approach to analyze the alternate solutions. An agreement of evaluation criteria is also determined at the beginning of the decision analysis. The decision analysis check whether each alternate meets the criterion that is evaluated, and then check the total number of criteria that matched the alternate solution.
The techniques used in the decision analysis process are,
Advantages of using the decision analysis technique,
Some of the books for Decision Analysis techniques,