Decision analysis cycle

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The decision analysis (DA) cycle is the top-level procedure for carrying out a decision analysis. Decision analysis (DA) is the discipline comprising the philosophy, methodology, and professional practice necessary to address important decisions in a formal manner.

The traditional decision analysis cycle consists of four phases:

• basis development
• deterministic sensitivity analysis
• probabilistic analysis
• basis appraisal.

The diagram below depicts the decision analysis cycle:Howard, Ronald A., ‘‘The Evolution of Decision Analysis,’’ in The Principles and Applications of Decision Analysis, ed. R. A. Howard and J. E. Matheson, SRI and Strategic Decisions Group (1983). [http://decision.stanford.edu/library/ronald-a.-howard/the-evolution-of-decision-analysis-1 Web Link] {{Webarchive|url=https://web.archive.org/web/20100131122646/http://decision.stanford.edu/library/ronald-a.-howard/the-evolution-of-decision-analysis-1 |date=2010-01-31 }}

The decision analysis cycle

A revised form of the cycle consists of an attention-focusing method followed by a decision method, each of which is composed of three stages:

• formulation
• evaluation
• appraisal.