Business Analytics: Decision Making Under Uncertainty

This set of vocabulary flashcards covers the fundamental concepts of Decision Analysis, including the components of decision trees, EMV calculations, multistage problems, and Bayesian probability updating as presented in the Business Analytics lecture notes.

Likelihoods

The conditional probabilities of observing specific information given a certain outcome, denoted as $P(I|O_n)$, which are used as inputs for Bayes' rule.

Law of Total Probability

The denominator in the Bayes' rule formula, representing the total probability of the information outcome $P(I)$.

Strategy Region Graph

A chart showing how the EMV varies with conditions to help identify if the optimal decision changes over the range of an input variable.

Two-way Sensitivity Chart

A chart showing how the selected EMV varies as each pair of inputs varies simultaneously.