Department of Industrial Engineering

IE 342 | Course Introduction and Application Information

Course Name

Decision Theory

Code	Semester	Theory (hour/week)	Application/Lab (hour/week)	Local Credits	ECTS
IE 342	FALL	3	0	3	5

Prerequisites	MATH 240 To succeed (To get a grade of at least DD)
Course Language	English
Course Type	ELECTIVE_COURSE
Course Level	First Cycle
Mode of Delivery	Face to face
Teaching Methods and Techniques of the Course	Lecture / Presentation Problem Solving
National Occupational Classification Code	-
Course Coordinator	Prof. Dr. Selin Özpeynirci
Course Lecturer(s)	Prof. Dr. Selin Özpeynirci
Assistant(s)	Araş. Gör. Ozan Baran Demirçivi

Course Objectives

The objectives of this course are to familiarize students with the introductory knowledge on modelling, analysis and solution approaches for decision making situations under uncertainty, under risk, under certainty and in situations with multiple criteria.

Learning Outcomes

The students who succeeded in this course;

Name	Description	PC Sub	* Contribution Level
Name	Description	PC Sub	1	2	3	4	5
LO1	Will be able to use appropriate approaches to choose among alternatives in certainty, uncertainty and risk environments	4			X
LO2	Will be able to use fundamentals of the utility theory	3.1		X
LO3	Will be able to construct decision trees to represent problems	2		X
LO4	Will be able to calculate the value of information	3.2			X
LO5	Will be able to use appropriate approaches to choose among alternatives defined by multiple criteria	4			X

Course Description

The main subjects of the course are the decision situations such as uncertainty, risk, certainty and multiple criteria, decision rule, decision trees, information and the cost of additional information, utility theory, multiobjective problems, solution notions for such problems and methods for calculations efficient solutions for multiobjective problems, goal programming and the methods of analyzing solutions for goal programming problems.

Related Sustainable Development Goals

Course Category	Core Courses
	Major Area Courses	X
	Supportive Courses
	Media and Managment Skills Courses
	Transferable Skill Courses

WEEKLY SUBJECTS AND RELATED PREPARATION STUDIES

Week	Subjects	Required Materials	Learning Outcome
1	Introduction to the course. Introduction to Decision Theory. Behavioral decision analysis.	Lecture notes	-
2	Decision making under certainty. Decision making under uncertainty. Decision making under risk.	Lecture notes	LO1
3	Utility Theory. Single attribute utility. Probability-equivalence approach.	Lecture notes	LO2
4	Interpreting utility functions. Utility functions for nonmonetary attributes.	Lecture notes	LO3
5	The axioms of utility. Certainty equivalence approach.	Lecture notes	LO2
6	Attitudes towards risk. Risk premium.	Lecture notes	LO2
7	Decreasing and constant risk aversion.	Lecture notes	LO2
8	Midterm Exam		-
9	Expected value of perfect information.	Lecture notes	LO4
10	Expected value of sample information.	Lecture notes	LO4
11	Multicriteria Decision Making.	Lecture notes	LO5
12	Goal Programming.	Lecture notes	LO5
13	Multiattribute Utility Theory.	Lecture notes	LO5
14	Machine Learning	Lecture notes	LO5
15	Review		-
16	Final exam		-

Course Notes/Textbooks	-
Suggested Readings/Materials	Lecture notes Robert T. Clemen Terence Reilly Making Hard Decisions With Decision Tools Duxbury Thomson Learning 2001 ISBN13 9780495015086 ISBN10 0495015083 Wayne L. Winston Operations Research. Applications and Algorithms Duxbury Press Belmont California 1994.

EVALUATION SYSTEM

Semester Activities	Number	Weighting	LO1	LO2	LO3	LO4	LO5
Quizzes / Studio Critiques	5	30	X	X	X	X	X
Midterm	1	30	X	X	X
Final Exam	1	40			X	X	X
Total	7	100

ECTS / WORKLOAD TABLE

Semester Activities	Number	Duration (Hours)	Workload
Participation	-	-	-
Theoretical Course Hours	16	3	48
Laboratory / Application Hours	-	-	-
Study Hours Out of Class	14	3	42
Field Work	-	-	-
Quizzes / Studio Critiques	5	4	20
Portfolio	-	-	-
Homework / Assignments	-	-	-
Presentation / Jury	-	-	-
Project	-	-	-
Seminar / Workshop	-	-	-
Oral Exams	-	-	-
Midterms	1	20	20
Final Exam	1	20	20
		Total	150

COURSE LEARNING OUTCOMES AND PROGRAM QUALIFICATIONS RELATIONSHIP

#	PC Sub	Program Competencies/Outcomes	* Contribution Level
#	PC Sub	Program Competencies/Outcomes	1	2	3	4	5
1	Engineering Knowledge: Knowledge of mathematics, science, basic engineering, computation, and related engineering discipline-specific topics; the ability to apply this knowledge to solve complex engineering problems.
	1	Mathematics
	2	Science
	3	Basic Engineering
	4	Computation
	5	Related engineering discipline-specific topics
	6	The ability to apply this knowledge to solve complex engineering problems
2	Problem Analysis: Ability to identify, formulate and analyze complex engineering problems using basic knowledge of science, mathematics and engineering, and considering the UN Sustainable Development Goals relevant to the problem being addressed.			LO3
3	Engineering Design: The ability to devise creative solutions to complex engineering problems; the ability to design complex systems, processes, devices or products to meet current and future needs, considering realistic constraints and conditions.
	1	Ability to design creative solutions to complex engineering problems		LO2
	2	Ability to design complex systems, processes, devices or products to meet current and future needs, considering realistic constraints and conditions			LO4
4	Use of Techniques and Tools: Ability to select and use appropriate techniques, resources, and modern engineering and computing tools, including estimation and modeling, for the analysis and solution of complex engineering problems, while recognizing their limitations.				LO1 LO5
5	Research and Investigation: Ability to use research methods to investigate complex engineering problems, including literature research, designing and conducting experiments, collecting data, and analyzing and interpreting results.
	1	Literature research for the study of complex engineering problems
	2	Designing experiments
	3	Ability to use research methods, including conducting experiments, collecting data. analyzing and interpreting results
6	Global Impact of Engineering Practices: Knowledge of the impacts of engineering practices on society, health and safety, economy, sustainability, and the environment, within the context of the UN Sustainable Development Goals; awareness of the legal implications of engineering solutions.
	1	Knowledge of the impacts of engineering practices on society, health and safety, economy, sustainability, and the environment, within the context of the UN Sustainable Development Goals
	2	Awareness of the legal implications of engineering solutions
7	Ethical Behavior: Acting in accordance with the principles of the engineering profession, knowledge about ethical responsibility; awareness of being impartial, without discrimination, and being inclusive of diversity.
	1	Acting in accordance with the principles of the engineering profession, knowledge about ethical responsibility ethical responsibility
	2	Awareness of being impartial and inclusive of diversity, without discriminating on any subject
8	Individual and Teamwork: Ability to work effectively, individually and as a team member or leader on interdisciplinary and multidisciplinary teams (face-to-face, remote or hybrid).
	1	Ability to work individually and within the discipline
	2	Ability to work effectively as a team member or leader in multidisciplinary teams (face-to-face, remote or hybrid)
9	Verbal and Written Communication: Taking into account the various differences of the target audience (such as education, language, profession) on technical issues.
	1	Ability to communicate verbally
	2	Ability to communicate effectively in writing
10	Project Management: Knowledge of business practices such as project management and economic feasibility analysis; awareness of entrepreneurship and innovation.
	1	Knowledge of business practices such as project management and economic feasibility analysis
	2	Awareness of entrepreneurship and innovation
11	Lifelong Learning: Lifelong learning skills that include being able to learn independently and continuously, adapting to new and developing technologies, and thinking questioningly about technological changes.