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The material explains how arrows distinguish sequence versus dependence, and how objective hierarchies map payoff nodes to higher-level goals while computation nodes support lower-level objectives. Through investment, evacuation, and sequential decision examples, it shows modeling alternatives, imperfect information, forecasts, outcomes, and costs to evaluate payoffs and consequences in a structured, graph-based way.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/structuring-decision-ii-influence-diagrams-basics/665381/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/structuring-decision-ii-influence-diagrams-basics/665381.png","ImageObject",300,407,{"name":92,"@type":93},"adawds","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-30","2026-10-29",true,{"@type":102,"interactionType":103,"userInteractionCount":81},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"What are the main node types in an influence diagram?","Question",{"text":112,"@type":113},"An influence diagram uses decision nodes, chance nodes, and computation nodes. 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The example uses forecasts that are not perfect predictors, then combines forecasts with evacuation or staying decisions to derive outcomes and costs.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},665381,1793301853,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":81,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":139,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":129,"read_time":144},3985747872983,"https://ap-avatar.wpscdn.com/davatar_994ba38a5ba835b3df7d355c54d3ed8d","Yan Liu, Department of BIE, Wright State University  \nInfluence Diagrams  \nDecision Node  \nInvest?  \nVenture Succeeds or Fails  \nReturn on Investment  \nComputation Node  \nComputer Industry Growth  \nChance Node  \nOverall  \nSatisfaction  \nPayoff  \nNode  \nInfluence Diagram of a Venture Capitalist’s Decision Problem  \n13  \nYan Liu, Department of BIE, Wright State University  \nInfluence Diagrams  \nRelationships between nodes are symbolized with arrows or directed arcs  \nDistinctions are made here between sequence and dependence arcs only for teaching purposes. Once you are familiar with the differences, you can use solid arcs throughout the influence diagram like the convention used in the textbook 14  \nYan Liu, Department of BIE, Wright State University  \nInfluence Diagrams  \n• Influence Diagrams and Fundamental-Objectives Hierarchy  \n– The Payoff node corresponds to the most general objective (located at the upper-most level) in the fundamental-objectives hierarchy  \n– The computation nodes correspond to the objectives at the lower levels in the hierarchy  \n15  \nYan Liu, Department of BIE, Wright State University  \nBasic Influence Diagrams  \n• Basic Risky Decision  \n– Whether the potential gain in the risky choice is worth the risk  \nInvestment Example  \nYou have $2,000 to invest and the objective is to earn as high a return on your investment as possible. There are two alternatives: investing in a friend’s business or keeping the money in a savings account with a fixed interests rate. If you invest in the business, your return depends on the success of the business. You figure there could be two possible outcomes: the business is either widely successful earning you $3,000 beyond your initial investment (hence leaving you $5,000 in total) or a total flop, in which case you will lose all your money. On the other hand, if you put your money into a saving account, you will earn $200 in interest regardless of your friend’s business.  \nYan Liu, Department of BIE, Wright State University  \nBasic Influence Diagrams  \nInfluence Diagram of the Investment Decision Problem 17  \nYan Liu, Department of BIE, Wright State University  \nBasic Influence Diagrams  \n• Imperfect Information  \n– Imperfect information about some uncertain event (such as forecast and estimate) will affect the eventual payoff  \nEvacuation Example  \nSuppose you live in Miami. A hurricane near the Bahama Islands threatens to cause severe damage. As a result, the authorities recommend everyone to evacuate. Although the evacuation is costly, you would be safe. On the other hand, staying is risky. You could be injured or even killed if the storm comes ashore within 10 miles of your home. If the hurricane’s path changes, however, you would be safe without having incurred the cost of evacuating. The two fundamental objectives are to maximize your safety and to minimize  \nyour costs.  \nUndoubtedly, you will pay close attention to the weather forecasters who would predict the course of the storm. However, the weather forecasters are not perfect predictors because not everything is known about hurricanes.  \n18  \nYan Liu, Department of BIE, Wright State University  \nBasic Influence Diagrams  \nForecasts“Will hit Miami”“Will miss Miami”  \nChoices  \nEvacuate Stay  \ndependence  \nForecast  \nHurricane Path  \nOutcomes  \nHits Miami Misses Miami  \nsequence  \nDecision Consequence  \nChoices Outcomes Consequences  \nHits Miami Safety, High Cost Evacuate  \nMisses Miami Safety, High Cost  \nHits Miami Danger, Low Cost Stay  \nMisses Miami Safety, Low Cost  \nInfluence Diagram of the Evacuation Decision Problem 19  \nYan Liu, Department of BIE, Wright State University  \nBasic Influence Diagrams  \n• Sequential Decisions  \n– Two or more decisions that need to be made in sequence  \nEvacuation Example  \nSuppose in the example of hurricane-evacuation decision, you are waiting anxiously for the forecast as the hurricane is bearing down. Should you keep waiting for the forecast or leave immediately? In this","cbCail0SvDiu13ds","https://ap.wps.com/l/cbCail0SvDiu13ds","pdf",2007270,32,"English","# Influence Diagrams\n## Decision, Chance, and Computation Nodes\n## Basic Influence Diagrams\n## Basic Risky Decision and Investment Example\n## Imperfect Information and Evacuation Example\n## Sequential Decisions and Sequential Evacuation\n## Computation Nodes for Intermediate Calculations","[{\"question\":\"What are the main node types in an influence diagram?\",\"answer\":\"An influence diagram uses decision nodes, chance nodes, and computation nodes. Decision nodes represent choices, chance nodes represent uncertainty, and computation nodes support intermediate calculations tied to objectives.\"},{\"question\":\"How do arrows in influence diagrams differ by meaning?\",\"answer\":\"Arrows can represent different relationships. The document distinguishes sequence arcs from dependence arcs for teaching purposes, and then recommends using solid arcs consistently once familiar with the distinction.\"},{\"question\":\"How is imperfect information handled in the evacuation example?\",\"answer\":\"Imperfect information about uncertain events affects the eventual payoff. The example uses forecasts that are not perfect predictors, then combines forecasts with evacuation or staying decisions to derive outcomes and costs.\"}]","Structuring Decision - II - Influence Diagrams Basics | PDF",81]