# Influence Diagram

There are several methods accessible to us, which make data understanding very easy. These methods help us to comprehend the factors and their mode of communication with each other. An influence diagram is one such method for understanding the data. ## What is an “Influence Diagram”?

An influence diagram is firmly related to the decision trees. It shows a synopsis of the data contained in a “decision tree”. So, in other words, it is a graphical portrayal of all the inputs, factors and yields involved in an organization procedure. Users can get a thought of what the model structure will resemble just by visualizing it before the beginning of any technical work.

History: It was created in the mid-1970s by the analysts to make the data understanding easier.

## Components of Influence Diagram

In order to comprehend the influence diagram, you must know its components. It has 5 nodes which are associated with lines. These components have different symbols or shapes. So the components are:

### 1. Decision node  It correlates with every choice to be made. It is also considered as the inputs to the diagram. It is represented as a rectangle. Any organization has control over this kind of input. Some of the examples of it are,

• Whether to put resources into a new venture.
• Amount to be contributed.
• Costs of the products.

### 2. Parameters or Functions node

It correlates with the deterministic parameters of the quantities it relies upon. These are contributions to the model which aren’t controlled or somewhat controlled by any organization. It is represented as a rounded rectangle.

### 3. Objective or Outcome or Value node

It correlates with the proportion of satisfaction of users with conceivable results. It is represented as a diamond or an hexagon. The net revenue is an example of this kind of node.

### 4. Uncertainty or Intermediate Factors node

It relates to every unpredictability such as occasion or condition. It is represented as an oval shape. These can be figured from choice factors, parameters or other halfway factors by using formulas.

### 5. Deterministic node

Another component which is a part of the “uncertainty node” is the “deterministic node”. It correlates with the unpredictability whose result is calculated deterministically. It is represented as a double oval.

### The significance of the arrows

The influence or the impact is described by the arrow. A collection of influence arrows connects one node to another by forming a line or path between those 2 nodes. For example, an arrow from A to B conveys knowledge about A which would straightforwardly influence our expectations regarding the estimation of B.

### Types of arcs involved

• Functional arc: Ends in “value node”.
• Conditional arcs: These are of 2 types. One ends in “uncertainty node” and other in “deterministic node”.
• Informational arc: Ends in “decision node”.

## Importance of Influence Diagrams

• This kind of diagram is specifically used to recognize the risks in the area of risk management. In this way, it will be utilized to recognize every conceivable hazard in the venture.
• It helps in discovering the unpredictability which exist with different potential situations.
• It also helps to study a specific circumstance and determine how a decision would be approached.
• It also helps to discover the unpredictability associated with the potential ways of the chart and hence recognizing potential dangers.

## Steps involved in making Influence Diagram

There are a wide range of approaches present to make this kind of diagram. It can be made by utilizing a whiteboard, pen & paper or by diagramming programming. The diagramming programming is the most effective amongst all.

Below are the fundamental steps involved in making an “influence diagram”,

• Construction of influence diagram is a top-down approach. So begin your tree by drawing a square shape close to the upper left corner or top of the page. This will represent the primary ‘node’ or shape.
• In the square shape add the primary inquiry or a basis that prompts a choice.
• In this step add various shapes as much as you need related to the procedures.
• Mark each of the shapes which are added in the previous step. A progression of choices, capacities, and chances should guide to an objective.
• Include connectors by utilizing a mix of straight or angled lines between all related boxes with arrows. These arrows will demonstrate the stream of influence. Each case must be linked with at least one line.

## Steps involved in making a complicated Influence Diagram

• If there is more than one decision present then determine the time sequence first. After that draw sequence lines to connect the “decision nodes”.
• Make the basic objective hierarchy. These are represented as a payoff and “intermediate computation nodes”.
• After that recognize the relationship between the “decision nodes” & “computation or the payoff nodes”. Draw lines in order to connect them. Also, recognize all the unpredictable events related to the process.
• After that recognize the relationship between the “uncertainty nodes” and “decision nodes”. Draw lines in order to connect them.
• Also, recognize the relationship between “unpredictable nodes” and “computation or payoff nodes” and draw lines to connect them.
• Check if you have missed to include any information. If you have missed any information then add them accordingly. Also, check the presence of irrelevant information and if present then omit those.

## Influence Diagram vs. Decision Tree

• Both are reciprocal perspectives of a decision issue.
• The “influence diagram” demonstrates the reliance among the factors. Whereas Decision tree shows the arrangement of alternative values for every choice.