Decision-Making Under Uncertainty

Week 1: Background and introduction: risk, uncertainty and variability; probability,random variables and expectation; optimization criteria; types of decisions

Week 2: One-time decisions: secretary problem; utility function; decision trees;TV game shows; Monte Hall problem; project evaluation

Week 3: Repeated decisions: newsvendor problem; buffering to manage uncertainty; safety stock for inventory; route planning; exploration vs. exploitation

Week 4: Sequential adaptive decision-making: strategic and operational; stochasticprogramming; Simpson’s Paradox; Markov decision process