I E 564: Decision Analysis
(3-0) Cr. 3.
Prereq: Course in probability and statistics.
Application of normative decision theory to problems with uncertainty and/or multiple objectives. The first decision framework will be a single-objective decision problem with uncertainty that takes into account a decision maker’s attitude towards risk. The second decision framework will be a multi-criteria decision problem in which a decision maker has multiple objectives. Topics include utility theory, value of information, sensitivity analysis, value-focused thinking, cost-effectiveness analysis, influence diagrams, and behavioral decision making. Examples will be drawn from business, systems engineering and design, and government.