Decisions Tree Examples, Illustrations, Concept, Sample Help Online
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Meaning of Decisions Tree
Decision tree as the name suggests is a diagrammatical representation of the decision-making process that enables you to find out the best possible solutions to a decision by taking into consideration all possible certainties and uncertainties. It is said as a decision tree because it is in a structure of a tree. It starts with a single cause and then branches off into a number of solutions like a tree. It shows you the different paths with different costs and their utilities.
Decisions Tree Formation
A decision tree starts with a decision that you need to make. Writing the decision in a square at the beginning and then from that box drawing lines outwards for each possible solution and keeping the lines as far as possible so that more thoughts can be added. It is very easy to understand and interpret.
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Decisions Tree Example Explanation
Let’s understand Decisions Tree with help of an example.
Example: A decision tree showing introduction of a new product.
Market reaction
Good Moderate Poor
Increase average sales failure in decision making
In sales units
Increase in less contribution towards loss
Revenue profit
Increase in profit review cost and quality root cause analysis for rejection of
of the producttheproduct
successful
decision needs improvement development of the product
development cost
increase in sales revenue
increase in profit
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