Learn how to convert a decision to a chance.
If you right mouse click an end node you can add more branches. By default this will give you another decision node with two branches. Right mouse click the node to convert it to a chance node.
Chance nodes are traditionally marked by a circle. There are two types of chance nodes: %-type and numeric, i.e. you may assign any combination of numbers to the chance options.
The percent values of the single possibilities are most commonly desired to add up to 100%. Decision Tree will change the color of the node if they don't but this will not be a problem to you. The software can use any given combination of percentages and calculate the correct average. Numeric chance nodes will not change color.
Numeric values can be any integer numbers. The following example shows a set of PERT estimation from three-point estimates each weighted with "1" for the optimistic value, "4" for the most likely value and "1" again for the pessimistic value.
The following tree shows different ways to estimate payoffs and their likeliness for each decision:
A click on the
symbol in the toolbar optimizes the
decision:
Improve the existing product is obviously the best solution, it has a positive payoff of $85,833, more than any of the other options.
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Where do you get the probability values from? This might actually be a difficult question and the quality and the relevance of your decision tree depend largely on your ability to estimate or to calculate these numbers. |
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A great source to understand this task is the risk management section of a document called "A Guide to the Project Management Body of Knowledge" which is issued by the Project Management Institute (PMI). You should be able to order it in every book store or you can buy it from the PMI Bookstore. |
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