Sometimes we make decisions using information involving uncertainty, such as future weather conditions. In this topic, we will consider decisions based on information we already know, or can find. These types of decisions are called decisions under certainty.
Give an example of a decision under certainty:
Purchasing food at a food booth.
Give an example of a decision not under certainty:
Choosing between investment options which are based on stock values.
Many times, decisions under certainty involve several criteria.
One method we can use to help decide is the cutoff screening method. Here, the decision maker predetermines a cutoff for each criterion. Then, the decision maker goes through each criteria and eliminates any choices that don't meet the cutoff. If more than one choice remains, the decision maker could consider additional criteria or restrict the cutoffs. If all choices have been eliminated, the decision maker can relax the cutoffs.
Another method to handle decisions under certainty with multiple criterion is the weighted sum method. In it, an "importance factor," or weight, is assigned to each criterion, and a rating is set up within each criterion.
The ratings within each criteria should be consistent, and typically the highest rating used is 10. Similarly, a weight of 10 is assigned to the most important criterion, and the remaining weights will be assigned relative to the most important.
Finally, a weighted sum will be calculated for each case. This will result in a single numerical rating, with the highest weighted sum giving the preferred choice.