A decision method is an axiomatic In traditional logic, an axiom or postulate is a proposition that is not proved or demonstrated but considered to be either self-evident, or subject to necessary decision. Therefore, its truth is taken for granted, and serves as a starting point for deducing and inferring other truths system that contains at least one action axiom An action axiom is an axiom that embodies a criterion for recommending action. Action axioms are of the form "IF a condition holds, THEN the following should be done." Decision theory and, hence, decision analysis are based on the maximum expected utility action axiom. In general, the principle for action embodied by an action axiom (.
Formulation is the first and often most challenging stage in using formal decision methods (and in decision analysis Decision Analysis is the discipline comprising the philosophy, theory, methodology, and professional practice necessary to address important decisions in a formal manner. Decision analysis includes many procedures, methods, and tools for identifying, clearly representing, and formally assessing important aspects of a decision, for prescribing a in particular). The objective of the formulation stage is to develop a formal model of the given decision.
Evaluation Evaluation is systematic determination of merit, worth, and significance of something or someone using criteria against a set of standards. Evaluation often is used to characterize and appraise subjects of interest in a wide range of human enterprises, including the arts, criminal justice, foundations and non-profit organizations, government, is the second and most algorithmic In mathematics, computer science, and related subjects, an algorithm is an effective method for solving a problem expressed as a finite sequence of instructions. Algorithms are used for calculation, data processing, and many other fields stage in using formal decision methods. The objective of the evaluation stage is to produce a formal recommendation (and its associated sensitivities) from a formal model of the decision situation.
Appraisal is the third and last stage in using formal decision methods. The objective of the appraisal stage is for the decision maker to develop insight into the decision and determine a clear course of action. Much of the insight developed in this stage results from exploring the implications of the formal decision model developed during the formulation stage (i.e., from mining the model). Central to these implications is the formal recommendation for action calculated during the evaluation stage. Other implications include various forms of sensitivity of the recommendation to selected variables in the model. Additional insight is obtained by exposing key aspects of the reasoning that led to the formal decision model (i.e., by justifying the model). Possible actions following the appraisal stage include implementing the recommended course of action, revising the formal model and reevaluating it, or abandoning the analysis and doing something else.
Justifying a decision model is the action of exploring and explaining the reasoning that led to the formulation of a particular decision model.
Mining a decision model is the action of extracting information (e.g., sensitivity, value of information VoI is sometimes distinguished into value of perfect information, also called value of clairvoyance , and value of imperfect information. They are closely related to the widely known expected value of perfect information and expected value of sample information. Note that VoI is not necessarily equal to "value of decision situation with, and value of control The value of control is a quantitiative measure of the value of controlling the outcome of an uncertainty variable. Decision analysis provides a means for calculating the value of both perfect and imperfect control. The former value, informally known as the value of wizardry, is an upper bound for the latter. Obtaining meaningful value-of-control) from a given decision model.
See also
- Decision support Decision support systems constitute a class of computer-based information systems including knowledge-based systems that support decision-making activities
- Decision theory Decision theory in economics, philosophy, mathematics and statistics is concerned with identifying the values, uncertainties and other issues relevant in a given decision, its rationality, and the resulting optimal decision. It is very closely related to the field of game theory
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