Applications of Decision Theory in Real Life andBusiness Statistics Problems

The Success or failure for any individual organization experiences depends to large extent on the ability of making positive and acceptable decisions at right time. To obtain such decision in result oriented approach different components of Decision Theory provides the direction to finalize the correct approach in Tree method. We can easily identify the problem and also the events and courses of action available to the decision maker. Provides the proper Payoff matrix through Decision Theory. We will compute the optimum stock to minimize expected cost using decision theory and tree method. It also provides the Under certainty and decision making under risk factors. Decision making under certainty and decision making under uncertainty will also decided in this study of manuscript. Maximax or Minimin Criterion, Pessimism Criterion as Maximin or Minimax also evaluated through Decision Theory approach. The entire Research Manuscript provides the Significance Decision Theory. We can understand the complete scope of Decision Theory in real life problems, we can understand the marginal analysis can solve the uncertainty problems, It also explains the Decision Tree approach in graphic representation of the decision process indicating decision alternatives.