Course Number: 94-833
Decision Analysis and Multi-Criteria Decision Making
This course is a companion to Management Science I & II (90-722 and 90-760) and to Decision Making Under Uncertainty (DMUU; 95-760). Most students will take this course after taking either the Mgmt Sci sequence or DMUU, but those courses are not formal prerequisites; the classes can be taken in any order. The only true prerequisite is a solid background in probability up through Bayes' Rule, e.g., from a statistics or empirical methods course. However, the class will presume some maturity and facility with modeling of the sort gained by taking Mgmt Sci or DMUU, or by having an undergraduate major in engineering or science.
As the course name implies, the methods taught will draw on Decision Analysis (decision trees, subjective utility assessment, Bayesian updating, etc.) and Multi-Criteria Decision Making (DEA, AHP, scoring models, rank-based methods, etc.). These tools help decision makers deal with uncertainty and conflicting objectives.
Conceptually the distinctive role of these methods is enabling analysts to incorporate decision makers' preferences and values into quantitative modeling and analysis. Management Science and DMUU teach how to describe trade-offs among competing objective – e.g., how to create a "risk-return" frontier for investment problems or a plot of completion time vs. incremental cost when "crashing" in project management. DA & MCDM extends those methods to help decision makers decide what point on such an efficient frontier best meets their personal interests.
The course format is also different. Because it is a smaller class, less class time will be devoted to formal lectures, and more time will be spent in discussion. Likewise, problems will be more open-ended, stressing creativity and problem "structuring", not just computations. Finally, whereas Management Science and DMUU are survey courses, spending only a week or so on any given topic, this course allows time for achieving mastery of a smaller number of methods.
Nevertheless, there are more similarities than differences. As with Management Science and DMUU, the emphasis is on practical skills; the fundamental objective is to prepare you to apply quantitative tools to difficult managerial decision problems in your professional life.
Jonathan P. Caulkins