Influence diagram for decision structuring process

Abstract

The influence Diagram is a new conceptual tool that can be used for structuring a decision problem. It has a graphical representation of probabilistic dependence among variables in the decision problem. The influence diagram facilitates the probability assessments needed to solve the decision problem and it is closely related to the decision tree. For the influence diagram to have a corresponding decision tree, it must be a form of decision network or decision tree network. A procedure for constructing the influence diagram as precise as possible is developed in this work. Also, a procedure for constructing the decision tree from the influence diagram which is a decision tree network is developed. An illustrative example that shows the power of the influence diagram is presented.