Decision and Risk Analysis

Decision and risk analysis helps organizations make decisions to maximize their utility in the presence of risk and uncertainty. It helps them make a risk-informed decision. The entire approach to developing alternative scenarios and evaluating them using tools and methods of decision analysis has undergone highly practical improvements in the last few decades. These improvements have largely to do with the need to engage senior decision-makers directly. For the larger organizations, the approach is to maximize expected value, balancing rewards, and costs with uncertainty. Medium and smaller organizations may be risk averse. This means that they have a non-linear utility function, usually emphasizing avoiding negative outcomes, and maximizing expected utility.