Decision model
From Wikipedia, the free encyclopedia
A decision method is an axiomatic system that contains at least one action axiom.
Formulation is the first and often most challenging stage in using formal decision methods (and in decision analysis in particular). The objective of the formulation stage is to develop a formal model of the given decision.
Evaluation is the second and most algorithmic stage in using formal decision methods. The objective of the evaluation stage is to produce a formal recommendation (and its associated sensitivities) from a formal model of the decision situation.
- This article is about the decision model. For the economic process of appraisal, see Appraisal.
Appraisal is the third and last stage in using formal decision methods. The objective of the appraisal stage is for the decision maker to develop insight into the decision and determine a clear course of action. Much of the insight developed in this stage results from exploring the implications of the formal decision model developed during the formulation stage (i.e., from mining the model). Central to these implications is the formal recommendation for action calculated during the evaluation stage. Other implications include various forms of sensitivity of the recommendation to selected variables in the model. Additional insight is obtained by exposing key aspects of the reasoning that led to the formal decision model (i.e., by justifying the model). Possible actions following the appraisal stage include implementing the recommended course of action, revising the formal model and reevaluating it, or abandoning the analysis and doing something else.
Justifying a decision model is the action of exploring and explaining the reasoning that led to the formulation of a particular decision model.
Mining a decision model is the action of extracting information (e.g., sensitivity, value of information, and value of control) from a given decision model.
