Utility Function
Definition
A utility function expresses desired outcomes as comparable numbers.
A function that maps outcomes or states into numbers according to the preferences of a decision maker.
Simply explained
It translates preferences into numbers so that different options can be compared according to these preferences.
Why it matters in practice
Helps realistically assess model quality, limits, and technical decisions.
Example from business
A plan weights delivery capability, cost, risk, and energy consumption according to documented preferences.
Limits and pitfalls
- Treating utility values as objective truth or failing to transparently address conflicts and uncertainty.
Origin & history
Utility functions are central in decision theory, economics, and rational agent models.
Use in mid-sized companies
- Possible application: A plan weights delivery capability, cost, risk, and energy consumption according to documented preferences.
Frequently asked questions
What does utility function mean?
A function that maps outcomes or states into numbers according to the preferences of a decision maker.
Which mistakes should be avoided?
Treating utility values as objective truth or failing to transparently address conflicts and uncertainty.
Sources
Source checked on 10.10.2026. Editorial application examples are hypothetical; no evidence of real customer results.
Editorially reviewed on: