Evaluate Alternatives
In order to eliminate bias in a decision, one can use tools such as influence diagrams and decision trees to evaluate alternatives.
Learning Objective

Model potential decision alternatives through utilizing pro/con analysis, influence diagrams, decision trees and Bayesian networks
Key Points
 There are a few tools available to decision makers that can be used to help quantify the potential alternatives to and outcomes of a decision. These tools include a simple proandcon analysis, an influence diagram, and a decision tree.
 A decision tree is used to lay out the alternatives and then assign a utility, or a relative value of importance, to a particular alternative.
 Another tool that decision makers can use to quantify a decision is an influence diagram, which is a compact graphical and mathematical representation of a decision situation.
Terms

Bayesian network
A probabilistic model that represents a set of random variables and their conditional dependencies (e.g., a Bayesian network could calculate the probabilities between symptoms and a disease).

decision tree
A visualization of a complex decisionmaking situation in which the possible decisions and their likely outcomes are organized in the form of a graph that resembles a tree.
Full Text
When a decision maker has successfully and accurately defined the problem and generated alternatives, he or she can then conduct analysis useful to evaluating and assessing each. This typically involves analysis of quantitative data such as costs or revenues. Qualitative data is also used to be sure that considerations such as consistency with strategy, effects on relationships, or ethical implications are taken into account.
A first step in analysis is identifying all the sources of data needed to understand the various alternatives and their potential outcomes. Finding this data often involves research if relevant data do not exist. The results of data analysis are typically gathered, summarized, and synthesized as the basis for discussions and deliberations by decision makers.
There are a few approaches that can be used to help structure the analysis and assessment of potential decision alternatives. These range from simple tools such as lists of pros and cons to more complex models such as decision trees and influence diagrams, which can capture more variables and include more data.
A decision tree specifies alternatives visually and creates paths of subdecisions to be made or uncertainties to be considered in order to estimate the outcome of a given choice. It includes a value for each alternative, such as a financial outcome, and notes the probabilities that each outcome will occur. Decision trees sometime include the results of financial analysis such as net present value, which determines the present or current value of a stream of incoming cash flows that a project will bring in sometime in the future. One limitation to using decision trees is that they can become highly complicated as decisions become more complex or outcomes involve greater numbers of variables.
Another tool that decision makers can use to analyze alternatives is an influence diagram. An influence diagram is a compact graphical and mathematical representation of a decision situation. It groups sets of variables into things that are known and factors that are uncertain and links them to the choice to be made and the criteria for assessing it. Influence diagrams are directly applicable in group decisions because they allow incomplete sharing of information among team members to be modeled and for estimates to be made explicitly.
Influence diagram example
This is a simple example of an influence diagram used to evaluate the alternatives of a decision.
In the scenario depicted by the influence diagram above, a person is choosing between vacation alternatives. Her goal is a satisfactory vacation, which will be influenced by how good the weather is. She cannot have direct knowledge at the time of the decision what the weather will be, but she can gather information on the weather forecast or other climate patterns to help her make the choice of vacation location.
Key Term Reference
 Consideration
 Appears in these related concepts: The Nature of Persuasive Communications, Leadership Model: The Ohio State University, and Key Behaviors of Transformational Leaders
 Problem
 Appears in these related concepts: Defining Decision Making, Problem Solving, and Taking Corrective Action
 analysis
 Appears in these related concepts: The Impact of External and Internal Factors on Strategy, Scenario Analysis, and Writing in Different Academic Disciplines
 assessment
 Appears in these related concepts: Strategic Management, Competitive Dynamics, and Considering the Organizational Life Cycle
 bias
 Appears in these related concepts: Gender Bias, Context of Culture and Gender, and Social Psychology
 conduct
 Appears in these related concepts: Codes of Conduct, EBusiness Strategy, and How Attitude Influences Behavior
 decision
 Appears in these related concepts: Divisional Structure, Implement the Course, and Ethical Decision Making
 direct
 Appears in these related concepts: The Nature of Efficient Communication, Variations in Directness, and Issues in Marketing
 ethical
 Appears in these related concepts: External Stakeholders, Rules to Follow When Speaking, and Internal Stakeholders
 factor
 Appears in these related concepts: Rational Algebraic Expressions, Factors, and Finding Factors of Polynomials
 forecast
 Appears in these related concepts: Forecasting, Impact of Modifying Inputs on Business Operations, and Problems in Forecasting Population Growth
 goal
 Appears in these related concepts: Setting Goals, Leading Teams, and The Goals of an Informative Speech
 group
 Appears in these related concepts: Writing Lewis Symbols for Atoms, Secondary Groups, and Primary Groups
 qualitative
 Appears in these related concepts: Fieldwork and Observation, Evaluating GDP as a Measure of the Economy, and Research Methods for Evaluating Treatment Efficacy
 scenario
 Appears in these related concepts: Applying the Decision Tree, Risk Aversion, and The SML Approach
 strategy
 Appears in these related concepts: Price Competition, Operations Management, and Considering the Environment
 team
 Appears in these related concepts: Teams, Informal Groups, and Team Building
 uncertainty
 Appears in these related concepts: Indeterminacy and Probability Distribution Maps, Responding to Uncertainty in Strategic Planning, and The Uncertainty Principle
 utility
 Appears in these related concepts: Willingness to Pay and the Demand Curve, Principle of Diminishing Marginal Utility, and Properties of Indifference Curves
 value
 Appears in these related concepts: The Exchange of Value, Gouache, and Defining Price
 values
 Appears in these related concepts: Influenced by Overall Culture, Emerging Values, and Defining Ethics
Sources
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