Decision Problem

In Decision Analysis, a decision problem is understood primarily as a problem of choice, which is defined as follows:

• Given a set of options (also called alternatives), which typically represent some object or actions, either

• choose an option that best satisfies the goals (objectives) of the decision maker, or

• rank the options according to these goals.

Making a choice usually occurs as part of a decision process.

Decision Analysis and DEXi are particularly interested in complex decision problems, that is, problems which are for some reason considered difficult by the decision maker and require careful elaboration and analysis. Complex decision problems are usually characterized by:

• Novelty: the decision maker is confronted with the problem for the first time and has insufficient knowledge or skills to address the problem;

• Unclearness: unclear understanding of the problem and its goals, unknown or incompletely defined options;

• Uncertainty: existence of possible events that cannot be controlled by the decision maker, but can affect the decision or its consequences (for example: competition response, weather);

• Multiple and possibly conflicting goals;

• Group decision-making: involvement of different decision-makers or groups that have different and possibly conflicting goals;

• Important consequences of the decision (such as possible big financial losses or environmental impacts);

• Limited resources to conduct the decision process (most often: available time and expertise).