1 Give an example of a good decision that you made that resulted in a bad outcome. Also give an example of a bad decision that you made that had a good outcome. Why was each decision good or bad?

2 Describe what is involved in the decision process.

3 What is an alternative? What is a state of nature?

4 Discuss the differences among decision making under certainty, decision making under risk, and
decision making under uncertainty.

5 What techniques are used to solve decision-making problems under uncertainty? Which technique
results in an optimistic decision? Which technique results in a pessimistic decision?

6 Define opportunity loss. What decision-making criteria are used with an opportunity loss table?

7 What information should be placed on a decision tree?

8 Describe how you would determine the best decision using the EMV criterion with a decision tree.

9 What is the difference between prior and posterior probabilities?

10 What is the purpose of Bayesian analysis? Describe how you would use Bayesian analysis in the decision-making process.