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Describes decision analysis, a systemic approach for analyzing decision problems. A running example illustrates problem structuring (decision trees), probability assessment and endpoint evaluation, folding back the tree as a method of analysis, and sensitivity analysis.

Charles River Jazz Festival must decide whether to press a compact disk (CD) of Friday's jazz performance for sale on Saturday and Sunday. The idea to press CDs is novel, so there is considerable uncertainty about how receptive customers will be. The festival must decide whether to press CDs only on Friday or pay for an option to press them on Friday and Saturday. A simulation is performed to help estimate Saturday and Sunday CD demand. One input of the simulation is a regression relating Saturday and Sunday attendance to Friday attendance and weekend weather conditions. The case illustrates how several different quantitative techniques--decision analysis, regression, and simulation--can be integrated in an analysis of a managerial decision problem. Provides practice in decision analysis; illustrates use of simulation and regression in obtaining probability estimates.

Consists of five exercises. Using simplified decision problems, the exercises illustrate how to value perfect information in decisions under uncertainty.