Decision tree analysis
Abstract
Decision tree analysis is drawing a decision tree which represents graphically various different solutions to problems. The decision tree is used to try to determine the best course of action. This can be used as a support tool when making decisions, visually showing all potential outcomes, consequences and cost. When complex decisions need to be made it can be useful to use this method.
The five steps in decision tree analysis are:
1. Define what the problem is and what decisions need to be made. 2. Draw up the decision tree and include every possible solution and their potential consequences. 3. Input variables with probability values relevant to the problem. 4. Determine rewards for every outcome. 5. Calculate the expected value for every node, which determines which solution is most likely to bring most value.
Application
Limitations
References
Heavy.ai. Decision tree analysis. URL:[1]
Letícia Fonseca. (2022) Decision Tree Analysis Examples and How to Use Them. URL:[2]
