Decision analysis, choosing the best option.
Learn how managers use accounting information to make decisions, from the decision making process and cost benefit analysis to relevant costs, risk, uncertainty, and practical examples.
Course overview
Decision analysis is a structured way to compare options and choose the best one using costs, benefits, and expected outcomes. This course explains how accounting information supports business decisions, including those made under risk and uncertainty.
- Understand what decision analysis is, and why managers use it
- Follow the steps of the decision making process
- Carry out a cost benefit analysis
- Identify relevant costs and benefits, and ignore irrelevant ones
- Understand the difference between risk and uncertainty
- Make decisions using probabilities and expected values
- Compare alternatives and justify the choice
- Apply the techniques through practical examples
Decision Analysis lessons
Follow the lessons in order, or search and filter to jump to a subject.
Introduction to Decision Analysis
Learn what decision analysis is and how managers use it.
Decision Making Process
Follow the steps from defining a problem to choosing an option.
Cost Benefit Analysis
Compare the costs and benefits of an option to judge its value.
Relevant Costs and Benefits
Identify which costs and benefits matter for a decision.
Decision Making Under Risk and Uncertainty
Decide when outcomes are not certain, using probabilities and criteria.
Practical Examples
Work through examples that apply decision analysis techniques.
Learn the process, then use the techniques.
The lessons start with decision analysis and the decision making process, then cover cost benefit analysis, relevant costs, and risk and uncertainty, and finish with examples.