Decision Making Under Uncertainty and Risk

Decision Making Under Uncertainty and Risk
Case Code: PROM011
Case Length: 2 Pages
Period: -
Pub Date: 2011
Teaching Note: Available		 Price: Rs.100
Organization: -
Industry: Information Technology
Countries: India
Themes: Quantitative Methods, Research Methods, Operations Research
Decision Making Under Uncertainty and Risk
Abstract Excerpts

Abstract

This is a fictitious case which deals with the subject of rational decision making based on factual as well as stochastic data. In this case, the protagonist had to face a couple of decision making dilemmas. His company has developed a new software which was scheduled for launch. The dilemma was whether to launch the product directly or to first test it commercially and then launch it. Again, if the software was to be launched, should it be launched in a single script or in multi-script? And if launched in single script, should it be expanded to multi-script at a later stage? All these situations were associated with their respective costs and payoffs, and some of them were attached with a probability of occurrence. Thus, this was a case of decision making under uncertainty and risk. This case is meant for MBA/MS students as a part of the Quantitative Methods/Research methods/Operation research curriculum.

Issues

  • Understand the issues and challenges of rational decision making
  • Analyze the given alternatives based on their payoffs
  • Appreciate the importance of information which can be both factual as well as stochastic
  • Study the possible states of nature and courses of action
  • Understand how to choose the best alternative under certainty, uncertainty, risk, and conflict
  • Debate on the various possible consequences based on the tradeoffs between costs and returns
  • Discuss concepts such as formation of decision trees, calculation of expected monetary values, etc.

Contents

Keywords

Quantitative Methods, Operation Research, Research Methods, Rational decision making, Decision making under certainty, Decision Making Under Uncertainty, Decision Under Risk, Decision Tree, Payoffs, Calculation of Expected Monetary Values

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