Hands-On Prescriptive Analytics

Chapter 11. One-Time Decisions

A bold but subtle assumption for Prescriptive Analytics is concerned with the frequency of decisions. This has two parts. First, decision-makers make only one decision, and, second, they make it now, today. The process for developing the decision menu has been underway in stages for some time before it reaches the desk of the decision-maker. That process involves a series of decisions. Think of these as stage-decisions. This is unimportant for when the “final” decision is made—it is still made now—and it is made only once. There is a no follow-up decision. But there are follow-up decisions, which is why “final” is in quotes. Decisions are always revisited, reviewed, and changed so that nothing is really final. The stage-decisions never stop.

I will address two leading questions in this chapter:

• When is a decision made?

• What is the frequency of decision making?

The second question is very complex. Therefore, I will only highlight some of its features.

Evidence of the Problem

You may wonder why I view frequency as a subtle assumption. I never mentioned in prior chapters that decisions are made today, however you define today, and that they are neither repeated nor revised. I just developed methods, such as mathematical programming, where there is a menu of projects from which the decision-maker chooses. If you examine the example in “Mixed Integer Programming” for new-product selection, you will see that the decision-maker is only asked to choose, ...