Explain the parts of a decision tree.
What are some benefits of using decision trees?
In what ways can decision trees be used for business decisions? Name some real-world examples.© BrainMass Inc. brainmass.com October 25, 2018, 3:37 am ad1c9bdddf
The main parts of a decision tree are:
Decision: These are represented by squares. This is the starting point of the decision tree. The decision to be analyzed forms this part. It has two arcs and options.
Sequence of events: These are represented by circle node and arcs and events. It provides different probabilities for different events which have originated from the decision node.
Consequences: These are represented by triangles and give the result of the decision that has been analyzed. The consequence sum of probabilities adds up to one.
Benefits of Decision trees
Decision trees are used for identifying a strategy that is most likely to reach the goal by modeling decisions and probable outcomes. Decision trees can ...
The expert explains the parts of a decision tree and benefits for using it. Whether the decision tree can be used for business decisions are determined.
Managerial Economics: Relevant Costs
Two partners own a small landscaping business in North Carolina called Summer Lawn Care. They have been specializing in summer grass seeding, installation, and maintenance. Recently, the partners acquired special technology and know-how for winter grass installations and maintenance. They also added a tree cutting service as recent storms in the area had caused demand for this service to soar. One of the partners insists that the name of the business should change to Lawn and Tree Care, so that it better reflects the range of services and, thus, generates more customer interest, and thus contracts. The second partner wants to keep the old name and argues, "We have already paid for business cards, vehicle paint, sign-age, and ads in Yellow Pages". Evaluate the arguments of the two partners. Explain and illustrate their points by identifying the relevant and irrelevant costs for this decision.
In 300 words or more, please, provide your response to the above discussion question. Identify all the costs in the decision process, including explicit costs, implicit costs and sunk costs
Explain what is meant by "contribution analysis". Carefully define the term and provide examples to illustrate it.
Can you think of a recent example where you had to evaluate the incremental costs and benefits of different options in order to make a decision? In 300 words or more, please, provide your response to the above discussion question