How do you construct a decision treee to represent a company

How do you construct a decision treee to represent a companys decision problem?

Solution

In a decision tree there are be 3 nodes :

Decision node : It represent the point at which the company has to make a choice from a number of possible alternatives.

Chance nodes : It represent the ppointat which chance or probabilities are reflected.

Terminal nodes : They are the end paths from left to right.

For a company\'s decision problem first identify the alternatives for which the decision is being made. Then identify their probabilities. Write the decisions at the nodes and the probabilities on the connecting of the two nodes.