You can read this information and complete this paper. I think I need a list values and then rank them. At last you need you use Problem， Objectives， Alternatives ，Consequences， Tradeoffs to analyze them.
Michelle_Michy
20200128035103structuring_a_decision.pptxStructuring a Decision Analysis
The Structure of “Smart Choices”
Problem
Objectives
Alternatives
Consequences
Tradeoffs
Decision Context
Decision context: the setting or circumstances in which the decision occurs
Every decision situation involves a specific context, and that context determines which objectives need to be considered.
Spend time making sure that the objectives are appropriate to the specific context.
Discussion Example
Objective: Travel comfortably from Washington DC to New York City
Alternatives: Lease a car, buy a car, buy a motorcycle, plane, train, bus
Class Question: Is this decision properly formulated?
Values and Objectives
It is critical to align actions with goals.
Values – things that matter to us
Objectives – what we specifically want to achieve
Values and objectives overlap and together make up the decision context.
Most people do not make the effort or take the time to define values and objectives explicitly, systematically and consciously.
But it is critical to do so for these analyses!
An objective hierarchy
It has be useful to structure your objectives into a hierarchy in order to both identify everything that you care about, but also to see if you can group them in order to minimize what you need to keep track of in your model.
Example of an objective hierarchy for siting a new public health outreach center
Money
For most of us spend a lot of time working to earn money. Thus, making money appears to be an important objective.
Is making money the objective?
Money is a special and unique type of value because it is usually tied in with achieving your other objectives.
This is called a proxy objective. For example, if you value travelling, you will need money.
Additionally by placing a monetary value on your different objectives, you can compare them and decide about trade- offs more easily.
Value and Objectives – Example
When purchasing a new home, how much more would you be willing to pay for an alarm system? How much for a large flat screen TV? Now, assume you can’t afford both.
By attaching monetary values to the two items you can compare them. The TV costs $4,000 while the alarm system is $8,000.
Is the alarm system twice as valuable as the TV? Are there other values involved besides money? How might we incorporate these other values?
Class discussion
Decisions to Make or Alternatives
Most decisions call for the Immediate Decision
Go, No Go
Accept the bet or not
Look for all possible decision alternatives: Be Creative!
Do nothing
Wait for information and decide later on
Pay for more information (this is called Value of Information – and there is another set of slides for this!)
Execute hedging
Decision may be of a sequential nature: future decisions may need to be taken into account when making immediate decision
Consequences and Trade-offs
Each objective in the decision context will have a final consequence.
Multiple objectives may mean multiple consequences.
Determine measures for each consequence so you can determine the extent to which each objective was met.
Monetary or non-monetary consequences?
What are the trade-offs between various objectives?
Uncertainty
Many decision (if not all) are made under the presence of uncertainty, e.g. investment decision: will stock of company go up or not?, Camping decision: will the weather be good or not?
Decision problems become more complicated when the number of relevant uncertain events increases
Information availability should not determine which future decisions you focus on.
We will start by defining uncertainty with discrete likelihoods. (We will return to this when we look at decision-making under uncertainty.)
Value and Objectives – A Personal Example
As a new graduate, you will have to choose from among a number of job opportunities. Your values are the things you care about in choosing the job.
Typical values of graduates include compensation, prestige, healthy workplace environment, housing, and cost-of-living concerns, along with time off to spend with family and friends and social concerns.
As you can imagine, you want to know which values are important to you and how they rank with each other.
You will explore this now by trying to apply decision analysis tools to an actual decision that you face.
Talk to your neighbor about your objectives, ranking and how you would trade-off between these various values.
Take home assignment is to redo this structure by yourself due January 31.
