STEPS INVOLVED IN DRAWING A DECISION TREE
The steps involved in draw‘ing a decision tree are stated below:
Step 1 → | Identify all decisions (and their alternatives) to be made and the order in which they must be made. |
Step 2 → | Identify the chance events that can occur after each decision. |
Step 3 → | Develop a tree diagram showing the sequence of decisions and chance events. The tree is constructed starting from left and moving towards right. The square box ‘’ denotes a decision point at which the available strategies are considered. The circle ‘O’ represents the chance Node or Event, the various state of nature or outcomes emanate from this ... |
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