COURSE SYLLABUS

IE 418        DECISION ANALYSIS       (3-0) 3

URL: http://ie.atilim.edu.tr/~ie418

Catalog Data:

Decision making in uncertain environments. Value of information. Risk seeking and risk averse behavior. Utility functions. Multi-objective decision making. Goal programming.  

Textbook:

Clemen, R.T., and Reilly, T., Making Hard Decisions: An Introduction to Decision Analysis, 2nd edition, Duxbury Press, 2000.

References:

·       Raiffa, H., Decision Analysis, 2nd edition, Addison-Wesley, 1968.

·       Holloway, C.A., Decision Making Under Uncertainty, Prentice Hall, 1979.

·       Winston, W.L., Operations Research, 2nd edition, PWS-KENT, 1991. 

Prerequisites by Topic:

Basic Probability Concepts, Bayes’ Theorem.

Method for Assessing Student Knowledge of Prerequisite Topics:

A prerequisite exam will be given at the beginning of semester covering the above topics.

Goals:

Upon successful completion of this course, the student should able to learn to give decisions in uncertain environments and in the presence of more than one objective.

Objectives:

·         To learn how to make decisions under uncertain environments

·         To introduce students about the psychological aspects of human about risk.

·         To enable the students how to assess the value of information.

·         To help students to understand the methodology of giving decisions in multiple objective environments.

Topics:

·           Introduction to decision making (1 week)

·           Decision rules under nonstochastic Criteria (2 weeks)

·           Decision analysis under expected value criterion (2 weeks)

·           Utility theory (2 weeks)

·           Risk sharing  (1 week)

·           Value of partial and perfect information (1 weeks)

·           Multi attribute utility functions (2 weeks)

·           Analytic hierarchy process (1 week)

·           Goal programming (1 week)

·           IE applications for decision analysis (1 week)

Computer Usage:

Software, such as ELECTRA or PROMETHEE, is used throughout the course.

Laboratory Projects:

Frequent homework assignments about decision making using softwares such as Promethee and Electra are given to the students.

Contribution to Professional Component:

1.        Mathematics and Basic Sciences                0 credits

2.       Engineering Science or Design                   3 credits

3.       General Education                                      0 credits