Decision Trees

Question 1

Net gain=?

Answer 1

Expected value - Initial costs

Question 2

Expected value=?

Answer 2

Probability x then add together

Question 3

What is Opportunity Cost?

Answer 3

The next best alternative. What is missed out when option A is picked

Question 4

Cons of decision tree

Answer 4

Only estimated data so the data isn’t accurate

Question 5

Advantage to decision tree

Answer 5

it forces the consideration of all possible outcomes of a decision and traces each path to a conclusion.