BMT Decision tree

Question 1

Decision tree

Answer 1

It is a quantitative decision-making tool representing the business’s different options in the decision-making process. It calculates the expected value of each decision

Question 2

Create decision tree

Answer 2

Question 3

Decision nodes

Answer 3

• Shown as squares
• used when decison needs to be made

Question 4

Chance nodes

Answer 4

• shown as circles
• shows different possible outcomes

Question 5

EValuation of decison tree

Answer 5

ADVANTAGES (QRSDL)
- Quantitative and visual.
- Risk is considered involved in decision-making
- Scientific and objective decisions are made BCS all costs are considered
- Decision-making is sped up
- problem are organised in logical manner

DISADVANTAGES(QEDR)
-Quanitative data only, no qualitative factors are factored in
- Estiamtes error only and subject to forecastin errors
- Delays in planning process.
- Reduced risk: does not necessarily reduce risk involved in decision making.