Chapter 24. Decision Making Under Risk
Sometimes an organization knows, through past experience or some other means, what the probabilities of different estimates for the same alternative are. This is the case, for instance, when you know that the odds of winning $1 million in a lottery are 1 in 2.5 million, the odds of winning $10,000 are 1 in 52,000, the odds of winning $100 are 1 in 453, and so on. This chapter shows how to incorporate these probabilities into a decision analysis. When probabilities can't (or won't) be assigned to the possible outcomes, use the decision making under uncertainty techniques in Chapter 25. The following topics are covered in this chapter:
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