ADVANTAGES of: Decision Trees

ADVANTAGES of: Decision Trees

1. Process of constructing a D/T encourages discipline in decision making; requires analysis & logical thinking.

   • Leads the business having a better understanding of different aspects of the decision.

2. Considers the probability of each chance outcome, as well as the reward from it.

   • Encourages a business to be realistic in assessing outcomes& rewards of different decisions that might be made.

3. Promotes quantitative analysis of situations; acknowledgement of uncertainty in taking any action.

   • Force a business to assess likelihood of negative/positive outcomes.

4. D/T promote discussion about decisions to be made; e.g. exploring the degree of risk acceptable to the business.

   • Relationship expressed in the D/T and qualitative factors e.g. brand image, corporate objectives etc.

5. D/T identify a single best strategy; useful when reaching a decision about how to proceed where there are conflicting opinions.

   • Used to justify decisions to stakeholders e.g. Managers, Shareholders etc.