Decision Making Flashcards
Why is problem structuring the most important stage of the social process of business analysis?
A correctly structured problem will lead to a good outcome and recommendation
What are the two causes of uncertainty? How can they be combatted?
Lack of knowledge: gaining knowledge
Natural variation: cannot be reduced
What does value complexity do?
Value complexity looks at the impact and consequences of a decision and tries to balance them with the positives that will come from the decision
What are the three categories of problems?
Puzzles
Problems
Messes
What are the identifying factors of a puzzle problem?
Puzzles:
Have a single, agreed-upon issue
With a single, agreed-upon solution
With multiple ways to get to the correct solution
What are the characteristics of a problem?
Problems:
Have a single, agreed-upon issue
Which has multiple correct solutions
What are the characteristics of messes?
Messes:
Have no single, agreed-upon issue
With no single, agreed-upon solution
What are the eight problem solving stages?
Problem structuring Agreement on purpose of modelling Identification of type of data available and collectable data Decision on modelling approach Collection of data Development of model Testing and validation Implementation of results
What are the two types of analytics?
Descriptive
Predictive
What is the purpose of descriptive analytics?
Creates summaries of data, transforming it to information, to say what happened in the past
What is the purpose of predictive analysis?
Extrapolates from previous data to forecast future events
What are the three problem solving rules that can be applied to maximise d what are the counterparts for minimising losses?
Maximax/minimin (optimistic)
Maximin/minimax (pessimistic)
Minimax regret/maximin regret
Assuming the expected outcome is known, how is the expected return calculated?
Calculating the sum of (probability * outcome) for all possible scenarios
