Decision Trees Already Passed

Circle {Ans: shows alternative outcomes for a course of action.}Expected Value {Ans: the probability of the outcome occurring, multiplied by the pay off the business can expect to get.}lines coming from a square {Ans: show the possible course of action & the costs of each action.}Probability {Ans: the likelihood of an event occurring. managers make a subjective estimate based on experience or past data. usually expressed as a decimal in decision trees.}Advantages {Ans: 1. makes managers work out & think about the probability & potential pay off of each outcome. 2. Nice visual representation. 3. allow managers to compare options quantitatively & objectively. 4. useful in familiar situations where the business has enough experience to make accurate estimates.}Decimals {Ans: probabilities of each outcome.}