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Nbr of Lec(s) Per Week
Nbr of Lec(s) Per Week
Nbr of Lec(s) Per Week
Duration
Duration
Duration
110 minutes
COURSE DISTRIBUTION
Core
Core
Elective
Open for Student
Category
Close for Student
Category
COURSE DESCRIPTION (BRIEF)
Decision Analysis is a branch of science that focuses on utilizing quantitative techniques for the purpose for making
sound managerial decisions under various forms of constraints (economic, temporal and behavioral). This course
exposes students to the concepts, methods and techniques of decision analysis to conceptualize real world managerial
problems, analyze them and find workable solutions. The course covers topics such as: decision trees, decision making
under uncertainty, value of information, risk analysis using Monte Carlo simulation, risk attitude, multi-objective
decisions, optimization models, matrix games, negotiation analysis to name a few. A real world project and written case
analyses provide avenues for practical learning.
COURSE DESCRIPTION (ELABORATE)
Major objectives of this course are:
(1) To understand basic concepts, methods and techniques of decision analysis;
(2) To develop a capability to use quantitative techniques (in relation to decision analysis) for analyzing and solving real
world managerial problems;
(3) To have a hands on experience of developing spreadsheet models (using Microsoft Excel and an add-on software
namely Palisade Suite) for modeling and analyzing decisions;
Decision Analysis / Science is a branch of science that focuses on utilizing quantitative techniques for the purpose for
making sound managerial decisions under various forms of constraints (economic, temporal and behavioral) faced in the
real world problems. These problems may belong to an organziations functional areas such as finance, operations,
engineering, HRM and marketing functions etc. The problems may also be interdisciplinary in nature in which case
function or discipline specific techniques when applied to solving these problems may not necessarily result into holistic
or practical solutions. In such scenarios the techniques developed within the discipline of decision analysis may provide
broader frameworks and concepts that render practical solutions to such problems.
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There are numerous examples in various disciplines where decision analysis concepts are needed for making sound
decisions, for example in software engineering (e.g. decision about choosing one technology or process over the other),
legal decisions (e.g., understanding the effects of economic pressures on attributions of responsibility), risk assessments
(e.g., assessing risks of nuclear power or missile tests), marketing (e.g. launching specific product in a market) and
managerial decision making (e.g., correcting biases in the assessment of risk). The decision analysis concepts and
frameworks are equally applicable in problems belonging to many other disciplines as well.
Decision analysis relies heavily on decision theory which is concerned with identifying values of different alternatives,
uncertainties involved, their utilities, and other issues relevant to a given decision, its rationality, and the resulting
optimal decision. In order to exercise these concepts decision theory borrows some of the concepts from probability
theory.
In order to achieve aforementioned objectives two major steps have been taken while designing the course: (1) a number
of real world case studies are used in order to better comprehend applicability of decision analysis concepts and
techniques in real world problems. Extended class room discussions on case study analyses will be instrumental in
understanding key issues pertaining to application, managerial concerns, and assumptions around the technique while
focusing on the real world problem, (2) a number of lab sessions have been included in order to develop practical skills
of configuring and using spreadsheets for decision analysis.
COURSE PREREQUISITE(S)
(1) To expose students basic concepts, methods and techniques of decision analysis;
(2) To learn using quantitative techniques (in relation to decision analysis) for analyzing and solving real
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Objective: Students will demonstrate knowledge of key business disciplines and how they interact
including application to real world situations.
Goal 7 (b) Understanding the science behind the decision-making process (for MGS Majors)
Objective: Students will demonstrate ability to analyze a business problem, design and apply
appropriate decision-support tools, interpret results and make meaningful recommendations to support the
decision-maker
Indicate below how the course learning objectives specifically relate to any program learning goals and objectives.
Program Learning Goals and
Objectives
Goal 1 Effective Written and Oral
Communication
Goal 2 Ethical Understanding and
Reasoning
Goal 3 Analytical Thinking and
Problem Solving Skills
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Midterm
Exam
Yes/No: Yes
Combine Separate: Combine
Duration: 3 Hours in the Lab
Preferred Date:
Exam Specifications: Closed Books / Open Notes
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Final Exam
Yes/No: Yes
Combine Separate: Combine
Duration: 4 Hours in the Lab
Exam Specifications: Closed Books / Open Notes
TEXTBOOK(S)/SUPPLEMENTARY READINGS
Following books are recommended for this course however, students are strongly encouraged to consult any other
resources such as: books, journals, magazines, sharing personal experiences to enhance their learning.
[AWZ]: Albright, S.C., Winston, W.L., and Zappe, C., 2006, Data Analysis & Decision Making With Microsoft Excel,
3e, Thomson, South-Western, ISBN: 0-324-40083-7.
[CLEMEN]: Clemen, R. T., 2001, Making Hard Decisions: An Introduction to Decision Analysis with Decision Tools,
Duxbury Press, Thomson Learning, ISBN: 0-534-36597-3.
[PB]: Powell, S.G., and Baker, K.R., 2009, Management Science The Art of Modeling with Spreadsheets, John Wiley
& Sons Inc., ISBN-13: 978-0-470-39376-5.
[ASW] Anderson, Sweeney & Williams, Statistics for Business and Economics.
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No.
Session
Type
Session Objectives
INTRODUCTION
1.
Class
Topic: Introduction
Read: PB-Chapter-2: Modeling in a Problem Solving Framework
(Sections 2.1, 2.2, 2.3, 2.4)
2.
Lab
Revision of probability
distributions.
MODELING DECISIONS
3.
Class
Making Influence
Diagrams.
4.
Class
5.
Class
Role of sensitivity
analysis in decision
modeling, analyzing
and making.
6.
Lab
MODELING UNCERTAINTY
7.
Class
Making decisions in
probabilistic situations.
8.
Class
The influence of
availability of
information on
decision.
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9.
Lab
Practicing probabilistic
decisions using
spreadsheets.
10.
Lab
Understanding RISK as
a package to model
decisions using
simulations.
11.
Lab
Understanding RISK as
a package to model
decisions using
simulations.
12.
Class
Understanding Monte
Carlo simulation
method.
13.
Class
MIDTERM EXAM
MODELING PREFERENCES
14.
Class
Understanding the
influence of manager
risk attitude on
decisions.
15.
Class
Understanding the
influence of manager
risk attitude on
decisions.
16.
Lab
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Class
18.
Class
Additive utility
function as a method of
analyzing multiobjective decisions.
19.
Class
Multiplicative utility
function as a method of
analyzing multiobjective decisions.
OPTIMIZATION MODELS
20.
Class
21.
Class
22.
Class
Sensitivity analysis in
optimization problems.
Class
Modeling and
analyzing game
theoretic situations
using decision models.
24.
Class
Modeling and
analyzing game
theoretic situations
using decision models.
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25.
Class
Modeling and
analyzing negotiations
using decision models.
26.
Class
Modeling and
analyzing bidding and
auction problems using
decision models.
SUMMARY
27.
Class
Revision.
28.
Class
Project Presentations
Project presentations.
FINAL EXAM