MS&E 252 Handout #29

Decision Analysis I 12/6/2004


Page 1 oI 3 Other DA classes
Other Decision Analysis Classes this year!

MS&L 352 - Decision Analysis 2 (Winter Quarter)

L·ervone makes decisions. but a íew people think about how thev do it. Decision analvsis is
the normati·e íield oí decision-making. MS&L 352. Decision Analvsis 2. is the second
course in the Decision Analvsis sequence. Its primarv íocus is on the application oí decision
analvsis in practice. Decision Analvsis 2 gi·es vou the skills needed to consult in decision
analvsis at a proíessional le·el.

1he íocus oí MS&L 352 is on the extension oí decision making írom a svstem oí thought
about personal decisions to the considerations necessarv íor aiding other people and
organizations in decision making: we call it decision engineering. \ou will íurther de·elop
vour abilitv to structure and implement an analvsis that will lead to claritv oí action in
complex decision situations.

In DA 2. we will discuss larger size problems that generallv ha·e a higher le·el oí technical
computation. than in DA1. 1o accommodate íor this we will be using spreadsheets and´or
decision analvsis soítware in manv oí our applications. 1he course will ha·e se·eral group
case studies to gi·e vou the opportunitv to de·elop vour own thoughts on the analvsis oí
decision problems.

During the course we will also guide vou through the Best Operational Practices` to
de·elop spreadsheet models íor consulting projects and methods to enhance the
presentation oí vour analvsis.

Some oí the topics co·ered:

1, Decision analvsis applications in bidding strategies íor diííerent auctions.
2, Decision making when the decisions iníluence the uncertainties vou are íacing.
3, low to organize the decision con·ersation the Dialogue Decision Process,.
4, 1he role oí the decision analvsis cvcle in assessing the qualitv oí decisions.
5, lraming decisions: decision hierarchv. strategv tables íor alternati·e creation.
creati·itv. de·eloping eííecti·e decision diagrams. o·ercoming biases in probabilitv
assessment and íraming.
6, Decision traps and aspects oí beha·ioral decision making.
¯, Organizational and political barriers to decision making.
8, Incorporating rele·ance in probabilitv using e·ocati·e knowledge maps.
9, 1ornado diagrams. open loop. and closed loop sensiti·itv analvsis.
10, Approximate methods íor certain equi·alent calculations.
11, Probabilistic dominance.
12, Options: ·aluing and creating options.
13, Assessing corporate risk attitude. risk sharing and scaling.
14, Decisions with multiple and conílicting attributes.
15, Decisions in·ol·ing liíe and death aspects.
16, Lthical issues in decision making.
MS&E 252 Handout #29
Decision Analysis I 12/6/2004


Page 2 oI 3 Other DA classes
1¯, Decision Analvsis Soítware
18, (orporate joint time-risk preíerence
19, Lxamples oí real liíe decision projects.

\e also ha·e se·eral speakers scheduled íor additional sessions throughout the quarter. 1hev
will tell vou their experience applving decision analvsis in practice. or starting DA-related
companies. In the past. some oí these lectures included creati·itv. organizational barriers to
decision making. portíolio management. turbo decision analvsis. examples írom practice.
decision analvsis soítware. and medical decision analvsis.

Other logistics you should know:

• (ase studies will be analvzed in groups.
• 1here will be no mid-term exam and the íinal exam is a take-home case studv.

MS&L 353 - Decision Analysis 3

1his course is intended íor students who are interested in pursuing research in decision analvsis or
those who want to deepen their understanding oí the íoundations oí the subject and its relation to
other approaches.

In DA1 and DA2. we demonstrate how to conduct a qualitv decision analvsis. and pro·ide the tools
needed to help indi·iduals and organizations make better decisions. lowe·er. we do not discuss
other approaches to decision making. In DA3. we start with a discussion oí the íundamental
requirements in a decision making svstem. \e discuss other methods oí decision-making and discuss
their success in meeting these requirements. \e also discuss the paradoxes` in decision making.

Nest we discuss the íoundations and historv oí probabilitv as a degree oí belieí. \e discuss
how this íundamental notion relates to classical statistics ·s. Bavesian iníerence and the
diííerent schools oí probabilitv. \e also discuss the entropv oí a random ·ariable and
methods oí experimentation and stopping rules.

\e then pro·ide more details on risk and risk attitude as it relates to general utilitv íunctions and
discuss diííerent utilitv íunctions based on their induced risk tolerance. \e also illustrate that íor
utilitv íunctions with diííerent attributes. there is onlv one dimension oí risk attitude once the ·alue
íunction is speciíied.

Other things you should know (subject to change):

• 1here are no exams scheduled íor this class.
• In the past. students ha·e written weeklv or biweeklv ´ 1BD, papers on suggested
readings.
• 1eams oí up to two students will de·elop an original piece oí research.

It is our intention that these research projects will lead to publishable papers in the area oí
decision analvsis.

MS&E 252 Handout #29
Decision Analysis I 12/6/2004


Page 3 oI 3 Other DA classes
MS&L 299 ÷Voluntary Social Systems
(Winter Quarter)

As engineers. we design using certain basic principles. Ií we were designing a íree societv.
what principles would we want to íollow· In this class. we take one particular principle and
examine its consequences. 1his class will help vou ha·e clear and poweríul thoughts about
go·ernment and societal svstems in a normati·e sense: not describing them as thev currentlv
exist. but designing them in accord with certain principles.

Our íree societv would ha·e to address manv issues. such as personal and propertv rights.
including issues oí selí deíense. pri·acv. coercion. contracts and torts. intellectual propertv.
and a svstem to deal with criminals. \e will examine how societv will aííect children and the
incapacitated. \e will examine diííiculties in the current societv such as care oí the
en·ironment,. and see how our íree societv might address them.

Other things you should know:
\ou can take the course íor 1-3 units. depending on the amount oí time vou wish to spend
on the course. An example írom last vear oí the workload íor the quarter íollows.
1 unit - three 2-3 page papers
2 units - three 2-3 page papers and a term paper or a presentation
3 units - three 2-3 page papers. a term paper. and a presentation

1he tvpical class session will ha·e some lecture. but will mostlv consist oí discussion.
Please plan on attending e·erv class session. 1oo much oí the learning happens during
class discussion oí issues.
\e do not plan to be gi·ing in-class exams. either midterms or a íinal. \e mav assign
one short íinal project. to ensure a basic understanding oí the concepts.


Other Classes

MS&L 355. Influence Diagrams
MS&L 455. Intelligent Decision Systems
MS&L 456. 1ools and 1echniques for Making Decisions in Organizations