3.3.3 Decision Trees (ALSO USE FOLDER

Question 1

Define a Decision Tree?

Answer 1

a Pictorial Decision Making Tool that Shows all Possible Outcomes from a Decision
- to Analyse the Probability of a Sucess in a Choice of Strategies
- Decides what would Be Most Profitable
- Quantitative Approach

Question 2

State Advantages of Decision Trees

Answer 2

• Constructing the Tree Diagram may Show Possible Courses of Action Not Previously Considered
• they Involve Placing Numerical Values on Decisions and Help to Separate Important From Unimportant Risks

Question 3

State Disadvantages of Decision Trees

Answer 3

• Decision Trees are Based on Predicted Data of the Potential Impact of Decision
• Doesn’t Take into Account Unforeseen Costs and Circumstances
• Probabilities and Net Outcomes are All Estimates