An Overview on Decision Making Under Risk and Uncertainty

Manjushree Kurhade, Rahul Wankhade

Abstract: Decision is nothing but a conclusion reached after consideration or it is the tendency of people to become certain about anything which they wants to do. Whereas decision making is a process of selecting the best among the different alternatives. Decision-making involves the selection of a course of action from among two or more possible alternatives in order to arrive at a solution for a given problem. Risk and uncertainty is incorporated during the decision making. Risk is nothing but the situation involving exposure to danger. Also the uncertainty is the lack of certainty, a state of having limited or incorrect knowledge where it is impossible to exactly describe the existing state, a future outcome. The sources of risk and uncertainty in decision making are discussed, emphasizing the distinction between uncertainty and risk. This paper introduces concepts, principles and approaches for addressing rick & uncertainty in decision making & provides a brief overview of risk mapping also the decision tree.

Keywords: Decision making, Risk, Uncertainty, Decision tree