Decision tree

Abstract

Decision Tree as a tool in Risk Management.

When the risks have been identified and the respective impacts and probabilities have been investigated, the decision whether to insure, mitigate, accept or externalise the risk in question will result in different possible outcomes with different probabilities and consequences. From these different branches other risk decisions will be made, and in the end a decision tree with all the possible different paths to what risks will be managed and how, will be established.

This wiki article investigates how the decision tree works as a tool in risk management, what the benefits are and what barriers are related to this tool.

1. The Decision Tree Concept

2. Applying the Decision Tree to Project Management

3. Other Risk Management Tools Involved

4. Benefits and Possibilites

5. Limitations and Barriers

6. Conclusion

7. References

8. Annotated Bibliography

Writer: Frederik Lind, s133570

Initial Steps to Decision making

Risk Identification

Consider Both Threats and Opportunities

Define Consequence and Likelihood Ranges

Figure 1. Four stages of classic risk management towards risk control.

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The Decision Tree Concept

Figure 2. Four stages of classic risk management towards risk control.

Figure 2. Four stages of classic risk management towards risk control.