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CLEMEN, ROBERT T. AND REILLY, TERENCE 2001, Making Hard Decisions with Decision Tools, Duxbury, Pacific Grove, California, 733 pp., $88.95.
Making Hard Decisions with Decision Tools is intended for advanced undergraduate students and master's degree students of business management. The material covered corresponds to a one-semester course. Students without a strong mathematical background can easily understand the ideas and methods presented. The authors introduce the needed elements of probability theory and concepts of statistics. I think, however, that students should take a course in statistics before taking a course in decision analysis, as is the case in the curricula of many universities. The book consists of three parts of similar length dealing with models of decisions, uncertainty, and preferences. Although an instructor could use the 16 chapters as a schedule of lecture subjects during the 16week semester, the presentation of material permits flexibility in designing a course.
The authors start by identifying the elements of a decision situation. Although the elements of a decision situation are obviously an important part of any decision analysis, they are not explicitly discussed in many textbooks. In this book, Clemen and Reilly define the elements of decision situations and illustrate them with intriguing real-world examples. I am sure the introduction will motivate students. These examples and the authors' discussion of the necessity of structuring decisions prepare readers for the introduction of influence diagrams and decision trees. The software included with the book permits the automatic creation of influence diagrams and decision trees. In the chapter on making choices,...