Decision Making Problem

Decision Making Problem :-

Certain Essential Elements are common to all decision making problems. These are :

1. Courses of Action :- Courses of Action are the actions, acts or strategies of the Decision Maker. Courses of Action are under control of the Decision Maker. 

2. State of Nature :- State of Nature (Future) are those factors Who are beyond the control of the Decision Maker. Events of any Course of Action are dependent upon the state of Nature. 

3. Uncertainty :- There is indefiniteness in the occurance of event or outcome. It is called Uncertainty. 

4. Payoff :- Payoff is associated with a course of action and an event which measures the net benefit to the decision maker that accrues from a given combination of decision alternatives and events. They are also known as conditional profit values or conditional economic consequences. 

5. Payoff table