Decision Analysis

Posted on May 15 2009

Good decision analysis begins with a great decision framework. The issue or problem is well defined, and the data which is to be collected is well defined.

Decision Analysis begins with a filtering process which allows us to weed out extraneous information.

There are many Decision Making Tools that help us make better decisions. Good Decisions are those whose outcomes meet our expectations.

In the simplest case, we can use Cost Benefit Analysis to weigh the pros and cons of each choice. However, this often leads to trade-off analysis as we only want the benefits not the costs of the choices available and yet often we can only choose one, not both.

When there are many choices with many characteristics, we can use a multi-attribute utility analysis tool. We set out the criteria or attributes to which we attach weights according to importance to us and the problem definition.

Each choice is weighed against each attribute. We complete with a weighted average calculation.

For decisions that lead to other decisions or whose impact appear some time in the future, we can use Decision Trees to analyse our interaction with the unknown.

Learners and Abdicators

Most people either want to know about the details (learn) or pay someone else to figure it out (abdicate).

Some of us are willing to learn decision analysis in certain situations and are too overwhelmed and want help in others.

We are in a time that many folks want results now, and have figured out that the learner approach is wasting their time in areas in which they have no interest or are not worth it. A great example is all of the companies who are preaching “stick to core competencies” as their primary mode of operation.

Many decisions these days are very complicated. We can’t just pay someone else to choose for us. So we do some research, find others who have experienced the same decision making process, and then decide.

We propose a mixture – we provide step-by-step guides which are packaged with the appropriate process, questions and tools to do it yourself. Methods and ways of doing the analysis are laid out for the only person who can truly decide, and that is you.

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