Analytical Models for Decision Making

By Colin Sanderson; Reinhold Gruen | Go to book overview

6
Risk

Overview

In this chapter you will learn about an approach to decision making called Decision Analysis (note the capital letters) that is based on estimates of the probabilities of each state of nature. It is also based on measures of the overall desirability of each outcome, called its utility, so ultimately it is a one-criterion approach. The structure of the decision making problem is represented as a decision tree. You will examine the sensitivity of decisions to different assumptions about the probabilities involved. Finally, there is a brief introduction to decision conferencing, in which Decision Analysis is used by groups.


Learning objectives
By the end of this chapter, you will be better able to:
represent the structure of a decision making problem as a decision tree
calculate the expected utility of different decision options
carry out a sensitivity analysis based on a decision tree
describe the method of decision conferencing for group decision making

Key terms

Chance node A point at which a decision tree branches into a mutually exclusive set of states of
nature. A chance node is usually represented by a circle.

Decision Analysis An approach to decision making which involves representing the problem
in decision-tree form, branching at decision nodes and chance nodes. Probabilities are needed
for each branch out of a chance node and utilities for each final branch in the tree.

Decision node The point in a decision tree where a decision must be made between competing
and mutually exclusive policy or treatment options.

Decision tree A type of model of a decision making problem with branches representing the
possible decision options and states of nature.

Expected utility The benefit or satisfaction that an individual anticipates getting from
consuming a particular good or service.

Lottery A hypothetical gamble used in Decision Analysis to estimate the utility of an outcome.

Decision outcome A combination of decision options and states of nature. Each 'terminal'
branch of the decision tree represents an outcome.

-103-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
Analytical Models for Decision Making
Table of contents

Table of contents

  • Understanding Public Health ii
  • Title Page iii
  • Contents v
  • Acknowledgements vii
  • Overview 1
  • Section 1 - Models and Decision Making in Health Care 5
  • 1: The Role of Models 7
  • 2: Building a Decision Support Model 28
  • 3: Strategic Options Development and Analysis 43
  • Section 2 - Methods for Clarifying Complex Decisions 63
  • 4: Many Criteria 65
  • 5: Uncertainty 84
  • 6: Risk 103
  • Section 3 - Models for Service Planning and Resource Allocation 119
  • 7: Population Need for a Specific Service 121
  • 8: Balanced Service Provision 142
  • 9: Hospital Models 164
  • Section 4 - Modelling for Evaluating Changes in Systems 179
  • 10: Modelling Flows Through Systems 181
  • 11: Irregular Flows Systems with Queues 202
  • 12: Outline Review 223
  • Glossary 227
  • Index 231
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen
/ 240

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.