Chapter 54

Techinque which shows all possible outcomes of a decision. The name comes from the similarity of the diagrams to the braches of a tree

Constructing the tree diagram may show possible courses of action not previously considered

They involve placing numerical values on decisions. This tends to imporve results.

They force management to take into account of the risks involved in decisions and help to seperate important from unimportant risks.

The information which the technique uses is not exact. Much of it is based on probabilities which are often estimated

Decisions are not always quantitative.

Process can be time consuming

May be some biased involved to encorage a particular course of action