The Project Manager's Guide to Making Successful Decisions

APPENDIX C

An Introduction to Decision Trees

In this appendix, Robert Dees and Ken Gilliam briefly describe some of the fundamental concepts of decision analysis and move to a discussion about one of the favorite structural models of decision analysts: the decision tree.

Decisions and Outcomes

To think about decision analysis, we must begin with the decision. A decision, as already stated, is an irrevocable allocation of resources. In the project manager’s world, this means that the decision is not made until contracts are signed or money changes hands. We know that we have made a decision when we cannot go back, or at least that we cannot go back without incurring a penalty. Going back would be another decision, and in this case we have at least ...