Quantitative Analysis for Management, 13/e

Glossary

Alternative

A course of action or a strategy that may be chosen by a decision maker.

Coefficient of Realism ($\alpha$)

A number from 0 to 1. When the coefficient is close to 1, the decision criterion is optimistic. When the coefficient is close to 0, the decision criterion is pessimistic.

Conditional Probability

A posterior probability.

Conditional Value or Payoff

A consequence, normally expressed in a monetary value, that occurs as a result of a particular alternative and state of nature.

Criterion of Realism

A decision-making criterion that uses a weighted average of the best and worst possible payoffs for each alternative.

Decision Making under Certainty

A decision-making environment in which the future outcomes or states of nature are ...