Matakuliah
Tahun
: A0784 - Strategi Investasi IT
: 2009
Decision Analysis
Pertemuan 18-20
Introduction
• Two commonly used sets of decision-making
methodologies
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Decision Theory
• Collection of methodologies and principles used to make
single, alternative choice of decisions
• Procedural mathematics and statistical are used
• Application in IT decision-making is presented
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Decision theory problems/elements
1. Alternatives/choices/strategies :
• Independent decision variables
• Represent alternative action to select
2. States of nature :
• Independent events assumed to occur in the future
• Example : economic recession, depression
3. Payoffs :
• Dependent parameters assumed to occur give a
particular alternative is selected
• Example : profit, cost
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Types of decision environments
• Certainty : Knows clearly what alternatives to choose
and the payoff for each choice
• Risk : Some information on the payoffs are available but
presented in a probabilistic
• Uncertainty : No information about likelihood of states of
nature occurring is available
Decision Theory Model Formulation
• Identify and list as rows the alternatives to choose from
• Identify and list as columns the states of nature that can
occur
• Identify and list in the appropriate row and column the
payoffs
• Formulate the problem/model as payoff table
 See Table 2-3
Decision-Making Under Certainty
Maximax criteria :
1. Select the maximum payoff for each alternative
2. Select the alternative of maximum payoffs
 See Table 4
Maximin criteria :
1. Select the minimum payoff for each alternative
2. Select the alternative of minimum payoffs
 See Table 5
Decision-Making Under Risk
Origin of probabilities :
• The probability of past events or experiments will follow
the same pattern in the future
• The probabilities are stable in the process that is being
observed
• The sample size is adequate to represent the past
behaviour
Expected Value Criteria
• Determined by computing weighted estimate of payoff
for each alternative
• Select the alternative with the best payoff. If the problem
has profit or sales payoffs, the best payoff would be the
largest expected payoff
• Expected opportunity loss criteria is based on the logic of
avoidance of loss or to minimize the loss.
Decision-Making Under Uncertainty
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Laplace
Maximin
Maximax
Hurwicz
Minimax