Flashcards: Business Decision-Making Techniques — 11 cartões

What does a decision tree map?

The possible outcomes of a series of related choices.

Decision tree: Purpose

Map outcomes of choices, compare costs, benefits.

What shape marks a decision point in a decision tree?

A square marks the decision point.

Decision tree symbols

Squares = decisions, Circles = outcomes.

What is one advantage of decision trees regarding data preparation?

They require minimal data preparation.

Decision tree benefits

Easy to interpret, considers multiple outcomes.

What is a limitation of decision trees related to complexity?

They may become too complex.

Decision tree limits

Can be complex, rely on unrealistic expectations.

Expected value

Weighted average of outcomes based on probabilities.

Decision analysis goal

Select option with highest expected value.

Cost-benefit analysis compares

Projected costs and benefits of a project.