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Influence Diagrams

What Do We Know?

We’ve discussed our problem and put it into context. We now understand our objectives and decisions. It is time to consider uncertainty (although the decision tree does get us started on the uncertainty discussion). A good way to discuss uncertainty is to use a tool called the influence diagram.

An influence diagram is a graphical representation of a problem, which shows (Figure 5.1)



Cover of Decision Analysis for Managers


Learn how to create an influence diagram, which is a way to graphically represent a decision situation so that all decisions and uncertainties are called out so they can be addressed.