Decision Analysis: Part 1 p.79-102
Section 1: Introduction p. 79-81
Make sure you understand the concepts
and terminology surrounding Figure 1.
Not much of the rest of the chapter will make sense until you do!
Section 2: Three Classes of Decision Models p. 81-92
Decisions Under Certainty p. 81-82
knows which state of nature will occur or will find out before he
or she must actually decide.
Decisions Undet Risk p. 83-9
Study pages 83-85
Be sure you understand
Equation 1; you'll have to use it on tests.
Skim Risk Profile p. 85
Decisions Under Ignorance p.89-93
Skim pages 85-89, "The cost of lost goodwill"
Study the first
paragraph of this section
Study Maximin Criterion
You will be tested on this criterion.
Skim the ressst of this section
Section 3: The Expected Value of Perfect Information p. 93-94
Skim this section. It's a very
important topic very poorlt presented;
hotdog vendor example instead.
Section 4: Utilities and Decisions Under Risk p. 94-101
Skip this section; it's beyond the svope of the course.
Section 5: A Mid Chapter Review p. 101-102
Study this section thoroughly, inclding the summary of
the parts we've skipped or skimmed.