Decision analysis provides a framework for rational decision making under uncertainty. The document describes a decision illustration where Sunny is deciding whether to enroll in a course at WMP from IIM Lucknow. If the economy is good, average, or bad, her salary after completing the course would be Rs. 50,00,000, Rs. 40,00,000, or Rs. 30,00,000 respectively. The course fees are Rs. 8,10,000 with additional expenses of Rs. 2,90,000. Alternatively, if she does not take the course her current salary of Rs. 20,00,000 would increase by 30%, 20%, or 10% depending on the state of the economy.

1. Decision Analysis

2. Literature Review
Decision analysis provides a framework and
methodology for rational decision making when the
outcomes are uncertain

19. Decision Illustration
Sunny wants to join WMP from IIM Lucknow, Noida Campus. She is hopeful that
if after completion of course she will get better opportunity and her salary will be
INR 50,00,000, if the economy is good. If the economy is average, she will get a
salary of Rs. 40,00,000. If economy is bad she will get Rs. 30,00,000. The fee for
course is approx. Rs. 8,10,000. Also she estimates that there would be some
incidental expenses of Rs. 2,90,000 on commuting etc.
In case she does not enroll for the course she will get increment on her current
salary of Rs. 20,00,000 @ 30%, 20% or 10% incase of economy is good, average
or bad during the duration of the course. The probability of economy to be good or
bad is 30% each and to be average is 40%