CEVAP:

The first step is to define the decision problem.

Once the problem is clearly defined, the next logical step is to investigate about the alternatives to solve the decision problem.

The next step is to find out about the “states of world”, or “states of nature”.

For each combination of decision alternative and state of nature, a payoff value is calculated.

Once all the payoff values are calculated, a payoff matrix or decision table is created.

The decision maker should calculate all the payoff values.

Once the payoff matrix has been created, the next step is to select a mathematical decision theory model to study the matrix.

Once the model is decided then the last step is to apply the model and find out the best decision alternative suggested by the decision theory model.