A Quantitative Approach for Decision Analysis

Abstract : Recent extensions of utility theory are adding a new tool to the list of quantitative approaches in decision analysis. This approach does not use probability theory as have most in the business literature but rather is based upon direct estimates of expected importance and value. In this way, it becomes possible to assess hierarchies of interrelated goals, objectives, and sets of actions numerically. Potential benefits include more complete formulation of strategic alternatives and means for executing them plus more penetrating consideration of interrelationships between means and ends in top level decision making. The article provides a 'recipe' for applying this new approach to decision analysis. (Author)