The Payoff Matrix
The techniques for decisions under uncertainty are all based on a payoff matrix. The payoff matrix is simply a way of showing all the possible outcomes that need to be considered. One axis of the matrix is a list of the mutually exclusive alternatives. This set of alternatives should be built using the techniques in Chapter 9 and should account for dependencies and mutual exclusivities between the proposals as well as resource constraints.
The other axis of the matrix is a list of all the different states of nature that need to be considered. Each state of nature is a future outcome that the decision maker doesn't have any control over. In a custom software contract bid situation, the bidder doesn't have any control over whether ...
Get Return on Software: Maximizing the Return on Your Software Investment now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
