Decision Trees
The decision tree method is a general approach to a wide range of processes and supply chain decisions, such as product planning, process analysis, process capacity, and location. It is particularly valuable for evaluating different capacity expansion alternatives when demand is uncertain and sequential decisions are involved. For example, a company may expand a facility in 2015 only to discover in 2018 that demand is much higher than forecasted. In that case, a second decision may be necessary to determine whether to expand again or build a second facility.
A decision tree is a schematic model of alternatives available to the decision maker along with their possible consequences. The name derives from the treelike appearance of ...
Get Operations Management: Processes and Supply Chains, 12th Edition now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
