Complex Optimization with Multiple Decision Options

Learn how to convert your decision from forced choice to open choice and how to optimize an open choice decision.

Up to now we discussed a Forced Choice solution, this means one option can be choosen out of a larger number of options (1 from n). But Insight Tree can also help you to make an Open Choice decision, which means a number of options can be choosen (m from n) according to a process called nonlinear, constrained optimization.

Lets assume we have a budget available of $300,000 which we may use for our drilling investment. We wish to gain the maximum payoff of a combination of our options without exceding our budget.

In order to optimize the decision against a budget, we have to change the node type to Decision (Choose multiple) by right mouse-clicking the decision node:

Insight Tree: A selection with many options

Now we can set a budget against we can optimize a decision. Click the symbol at the bottom of the decision description and select Show Budget, then set the budget:

Insight Tree: Change the decision type to "Choose multiple".

Use again for optimize the decision for maximum payoff with exceeding the budget for the investment. The decision tree finds now the combination of options with the maximum payoff without exceeding the budget constraint:

Insight Tree: The best portfolio decision is the combination of drilling projects 2, 3, and 6.


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