Decision Tree: Risk & Opportunities
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== Abstract == | == Abstract == | ||
Uncertainty is a massive issue in project management and can lead to high cost and disadvantages if not handled correctly. The project manager must therefore be able to make the best decisions based on the information available.<br> | Uncertainty is a massive issue in project management and can lead to high cost and disadvantages if not handled correctly. The project manager must therefore be able to make the best decisions based on the information available.<br> | ||
| − | The decision tree is a tool that can aid the project manager to ensure the best outcome of a problem. | + | The decision tree is a tool that can aid the project manager to ensure the best outcome of a problem.<br> |
It is based on a tree-like model where each branch is a path of decisions and possible events. Each step include the cost and possibility of that event to occur.<br> | It is based on a tree-like model where each branch is a path of decisions and possible events. Each step include the cost and possibility of that event to occur.<br> | ||
| − | By identifying all the possible events and their chance to occur it gives the project manager the ability to calculate the highest probability for each path. | + | By identifying all the possible events and their chance to occur it gives the project manager the ability to calculate the highest probability for each path.<br> |
| − | When combining this with the cost of each event the project manager is able to estimate the cost/benefits for each decision. | + | When combining this with the cost of each event the project manager is able to estimate the cost/benefits for each decision.<br> |
| − | == | + | == Overview == |
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| + | == References == | ||
Revision as of 15:39, 17 September 2017
Abstract
Uncertainty is a massive issue in project management and can lead to high cost and disadvantages if not handled correctly. The project manager must therefore be able to make the best decisions based on the information available.
The decision tree is a tool that can aid the project manager to ensure the best outcome of a problem.
It is based on a tree-like model where each branch is a path of decisions and possible events. Each step include the cost and possibility of that event to occur.
By identifying all the possible events and their chance to occur it gives the project manager the ability to calculate the highest probability for each path.
When combining this with the cost of each event the project manager is able to estimate the cost/benefits for each decision.
