systematic approach to making decisions especially under uncertainty. Although statistics such as EXPECTED VALUE and STANDARD DEVIATION are essential for choosing the best course of action, the decision problem can best be approached,using what is referred to as a payoff table (or decision matrix), which is characterized by: (1) the row representing a set of alternative COURSES OF ACTION available to the decision maker; (2) the column representing the STATE OF NATURE or conditions that are likely to occur and over which the decision maker has no control; and (3) the entries in the body of the table representing the out-come of the decision, known as payoffs, which may be in the form of costs, revenues, profits, or cash flows. By computing expected value of each action, we will be able to pick the best one.