Lecture 6 (End of Chapter Questions)

Question 1

How can you represent uncertainties graphically?

Answer 1

Uncertainties can be represented in an influence diagram by ellipses and in a decision tree by circles.

Question 2

How can you visualise a decision problem?

Answer 2

A decision problem can be visualised via an influence diagram or a decision tree/matrix.

Question 3

What are the advantages and disadvantages of influence diagrams, decision matrices and decision trees?

Answer 3

Influence Diagram:
+ Often used for early stages, Compact representation
- Does not contain all details

Decision Tree:
+ Better suited for multi-stage problems
- Complex with many alternatives

Decision Matrix:
+ Complex illustration
- Complex for multi-stage problems

Question 4

Define strategy and scenario.

Answer 4

Strategy:
Assignment of a decision to each decision node where the decision chosen depend on the yet to be determined outcomes of chance events.

Scenario:
Strategies of the environment (hypothetical combination of chance events)