What the System Does
Decision Kernel Lite takes four inputs:
- a set of actions
- a set of plausible scenarios
- probabilities for each scenario
- a loss matrix describing consequences
From these, it produces:
- a single recommended action
- a clear justification using multiple risk lenses
- a Decision Card suitable for executive review
No forecasting. No optimization. Only the decision.
The Three Risk Lenses
The system evaluates every action using three complementary rules.
1. Expected Loss — “What works best on average?”
- Optimizes average outcome
- Appropriate when probabilities are trusted
- Best for repeatable decisions
This is the default economic lens.
2. Minimax Regret — “What will I regret least?”
- Optimizes post-hoc defensibility
- Appropriate when probabilities are unreliable or disputed
- Best for one-shot, high-accountability decisions
This lens protects decision-makers from hindsight criticism.
3. CVaR — “How bad are the bad cases?”
- Focuses on tail risk
- Appropriate when rare failures are unacceptable
- Best for safety, financial ruin, or irreversible outcomes
This lens prioritizes survival over average performance.
How the Final Decision Is Chosen
- All three lenses are computed simultaneously
- A primary decision rule is selected explicitly
- A heuristic recommendation is provided, but can be overridden
This ensures:
- transparency
- governance
- accountability
There is no “black box” choice.
What the Output Looks Like
The system produces a Decision Card summarizing:
- the recommended action
- the assumptions used
- how each rule evaluated the options
- why the final rule was chosen
This artifact can be:
- pasted into an executive memo
- included in a slide deck
- stored for audit and review
What Makes This Different
Decision Kernel Lite does not attempt to:
- predict demand
- estimate probabilities automatically
- optimize operational parameters
Its value lies in decision clarity, not model sophistication.
It sits between:
- analytics (what might happen)
- and operations (what to do)
Typical Use Cases
- strategic one-off choices
- pricing or investment decisions with asymmetric downside
- contract or supplier selection
- policy or governance decisions
- scenario planning workshops
Any situation where:
“We must decide, even though we are uncertain.”
Business Value
Organizations using structured decision kernels achieve:
- faster decision cycles
- fewer unexamined assumptions
- reduced post-decision conflict
- clearer accountability
Most importantly:
Decisions become explainable, not just executable.
Positioning
Decision Kernel Lite is a foundational decision layer.
It can be:
- used standalone
- embedded into larger planning systems
- integrated downstream of forecasting or upstream of optimization
It is deliberately minimal, fast, and domain-agnostic.
Bottom Line
Decision Kernel Lite does not promise certainty.
It delivers something more valuable:
Clarity about what you are choosing — and why — under uncertainty.