Section 6.4 Review Questions Define what it means to perform decision making under assumed certainty, risk and uncertaint In decision making under certainty, it is assumed that complete knowledge is available so that the decision maker knows exactly what the outcome of each course of action will be a decision made under risk is one in which the decision maker must consider several possible outcomes for each alternative, each with a given probability of occurrence In decision making under uncertainty, the decision maker considers situations in which several outcomes are possible for each course of action How can decision-making problems under assumed certainty be handled? Decision-making problems under assumed certainty are hand led as if there is only one possible outcome How can decision-making problems under assumed uncertainty be handled? Decision-making problems under assumed uncertainty are handled as if multiple outcomes are possible How can decision-making problems under assumed risk be handled? Decision-making problems under assumed risk are handled as if multiple outcomes are possible, but the probability of each outcome is known Copyright C2018 Pearson Education, Inc.5 Copyright © 2018Pearson Education, Inc. Section 6.4 Review Questions 1. Define what it means to perform decision making under assumed certainty, risk, and uncertainty. In decision making under certainty, it is assumed that complete knowledge is available so that the decision maker knows exactly what the outcome of each course of action will be. A decision made under risk is one in which the decision maker must consider several possible outcomes for each alternative, each with a given probability of occurrence. In decision making under uncertainty, the decision maker considers situations in which several outcomes are possible for each course of action. 2. How can decision-making problems under assumed certainty be handled? Decision-making problems under assumed certainty are handled as if there is only one possible outcome. 3. How can decision-making problems under assumed uncertainty be handled? Decision-making problems under assumed uncertainty are handled as if multiple outcomes are possible. 4. How can decision-making problems under assumed risk be handled? Decision-making problems under assumed risk are handled as if multiple outcomes are possible, but the probability of each outcome is known