Sensitivity Analysis and Decision Trees

Most management decisions do not exist in a vacuum, meaning without multiple factors. A change in one condition may produce a reaction that will have a ripple effect throughout a system. In public management, we often are concerned with the sensitivity of an end condition to changes in the environment that may have been caused by a previous decision. As a public manager, the knowledge of what impact a change in condition A could have on outcome B is critical knowledge to possess.

This week you will be introduced to the use of sensitivity analysis and decision trees in public decision making. You will also have an opportunity to apply sensitivity analysis and decision trees to a public management situation.

Discussion: When Is It Appropriate to Use Sensitivity Analysis and Decision Trees?

In public management, there are critical decisions to be made, for which the answer is not always obvious, and neither are the consequences. In public management, many times, the certainty cannot be predicted. It can be overwhelming at times, the number of factors that need considered before making a decision. By exploring all the factors, the uncertainty can be minimized.

Most of the examples in the readings this week are from the private sector; however, the techniques introduced are equally as valuable in public sector. As you read the articles, think about how you might use sensitivity analysis and decision trees in your work or the work you hope to do once you have earned your DPA.

For this Discussion, you discuss techniques of sensitivity analysis.

To prepare:

Review the Learning Resources for the week. Focus on the appropriate use of sensitivity analysis and decision treas.

Read "An Introduction to Decision Theory" in your Learning Resources. Concentrate on pages 20-9 through 20-13. As you read through the document, you will notice that the examples relate to the private sector.

By Day 3
Post a description of a public-sector example where you would apply the techniques of sensitivity analysis and decision trees. Explain how you would apply each and why you would choose techniques in your response.

Attachment:- Video.rar