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Project Decisions by Michael Trumper, Lev Virine

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CHAPTER 15

Decision Trees and the Value of New Information

A decision tree is a graph that represents a decision problem. It can be easily generated from a project schedule. Decision trees are used to calculate the expected value or expected utility of an alternative and, as a result, allow you to make a rational choice. Value-of-information analysis is a process that helps determine the price someone should pay to determine the actual value of an uncertainty.

WHAT IS A DECISION TREE?

Burglars usually lack good judgment, let alone any expertise in decision analysis. Case in point: Harry and Marv, the two would-be burglars in the movie Home Alone ...

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