Sample Influence Diagram

An influence diagram is a simple visual representation of a decision problem. It provides an intuitive way to identify and display the essential elements, including decisions, uncertainties, and objectives, and how they influence each other.

This simple influence diagram shows how decisions about the marketing budget and product price influence expectations about its uncertain market size and market share.

These, in turn, influence costs and revenues, which affect the overall profit. The product manager, VP of marketing, and market analyst may work together to draw such a diagram to develop a shared understanding of the key issues. The diagram provides a high-level qualitative view.