Harvard Business Essentials, Decision Making

Decision Software?”). You should become familiar with those that

can help your business.

The Problem of Uncertainty

As you evaluate alternatives, you’ll notice that some are more uncer-

tain than others. For example, alternative C may have a much higher

potential return for the company than alternative D. But C’s return

many depend on assumptions and cost estimates that may or may not

hold, whereas D is almost a sure thing.

In business, uncertainty of outcome is synonymous with risk,

and you must factor it into your evaluation. We touched on it briefly

in our discussion of probability. There is much, much more to un-

certainty that you need to consider—so ...