Probabilistic Analysis in Management Decision Making

• Main Authors: Delmar, M. V., Sørensen, John Dalsgaard
• Other Authors: Guedes Soares, C., Murotsu, Y., Pittaluga, A., Spencer, J.S., Stahl, B.
• Format: Other Non-Article Part of Journal/Newspaper
• Language: English
• Published: American Society of Mechanical Engineers 1992
• Subjects: Decision Model; Decision Tree; Utility Function; Basic Variables; Limit State Function; Safety Margin; Reliability Index; Probability of Failure; Sensitivity Measures; Basic Varibles; Sensitivity Measure; Arctic
• Online Access: https://vbn.aau.dk/da/publications/f5b7a510-8094-11db-8b97-000ea68e967b

The target group in this paper is people concerned with mathematical economic decision theory. It is shown how the numerically effective First Order Reliability Methods (FORM) can be used in rational management decision making, where some parameters in the applied decision basis are uncertainty quantities. The uncertainties are taken into account consistently and the decision analysis is based on the general decision theory in combination with reliability and optimization theory. Examples are shown where the described technique is used and some general conclusion are stated. The target group in this paper is people concerned with mathematical economic decision theory. It is shown how the numerically effective First Order Reliability Methods (FORM) can be used in rational management decision making, where some parameters in the applied decision basis are uncertainty quantities. The uncertainties are taken into account consistently and the decision analysis is based on the general decision theory in combination with reliability and optimization theory. Examples are shown where the described technique is used and some general conclusion are stated.