Decision Basis

The decision basis is the alternatives (“What you can do”), information (“What you know”), and preferences (“What you want”) on which a decision is based. The decision basis constitutes a formal decision model. Typically, two decision bases—deterministic and probabilistic—are constructed in decision analysis. The probabilistic basis is developed from the deterministic basis by eliminating unimportant elements from explicit consideration (through deterministic sensitivity analysis) and by probabilistically assessing the remaining (important) elements. The probabilistic basis is usually represented as a well-formed decision relevance diagram—a basic relevance diagram. A decision basis has an associated pedigree, which must include the decision-maker.