Decision Trees 0.0 / 5 ? Business StudiesN/AA2/A-levelWJEC Created by: Joebarlow_10Created on: 14-03-19 10:44 Definition They are a form of diagrammatic analysis used to help businesses with decisions. 1 of 16 Where do Decision Trees play an important role? Where chance is involved in the outcome 2 of 16 What probability do Decision trees provide? Success or Failure 3 of 16 With a Decision Tree what do you begin with? The decisions Businesses want to make. 4 of 16 How many choices are there with a Decision Tree? 2-3 5 of 16 When Drawing a Decision Tree what do you begin with? A Square (Node) 6 of 16 What is the next course of action when drawing a Decision Tree? Draw lines outwards for each option and write the description along the line. 7 of 16 After that process what happens next? This is where you consider the likely outcome of each decision and draw a circle. 8 of 16 How do you work out the value of each option? The probability for each outcome is multiplied by the estimated return. 9 of 16 What should you take into account when deciding which option to take? The initial investment and the estimated return/ probability. 10 of 16 Identify some benefits of a Decision Tree Lays out the Problem clearly so all options are considered/ You can fully analyse the consequences and risks of a decision 11 of 16 Identify some limitations of a business tree Only an estimate so could be inaccurate/ oversimplify a decision and focuses too much on finance. 12 of 16 What do the predicted outcomes and estimates need to be based on? Valid Data and quantitative value. 13 of 16 Should you consider other decision making methods? Yes 14 of 16 What other factor could influence a businesses decision? Qualitative factors 15 of 16 Give examples of that factor Workforce, management, suppliers, customers, costs, recruitment etc. 16 of 16
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