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TEACHING SUGGESTIONS
Teaching Suggestion 3.1: Using the Steps of the Decision-Making Process.
The six steps used in decision theory are discussed in this chapter.
Students can be asked to describe a decision they made in the last semester, such as buying a car or selecting an apartment, and describe the steps that they took. This will help in getting students involved in decision theory. It will also help them realize how this material can be useful to them in making important personal decisions. Teaching Suggestion 3.2: Importance of Defining the Problem and Listing All Possible Alternatives.
Clearly defining the problem and listing the possible alternatives can be difficult. Students can be asked to do this for a typical decisionmaking problem, such as constructing a new manufacturing plant.
Role-playing can be used to make this exercise more interesting.
Many students get too involved in the mathematical approaches and do not pay enough attention to the importance of carefully defining the problem and considering all possible alternatives.
These initial steps are important. Students need to realize that if they do not carefully define the problem and list all alternatives, most likely their analyses will be wrong.
Teaching Suggestion 3.3: Categorizing Decision-Making Types.
Decision-making types are discussed in this chapter; decision making under certainty, risk, and uncertainty are included. Students can be asked to describe an important decision they had to make in the past year and categorize the decision type. A good example can be a financial investment of $1,000. In-class discussion can help students realize the importance of decision theory and its potential use.
Teaching Suggestion 3.4: Starting the EVPI Concept.
The material on the expected value of perfect information (EVPI) can be started with a discussion of how to